Posts Tagged ‘citibank’

Citigroup Saw Warning Signs, Knew Of Madoff Fraud; Picard Suit Wants $430M In Damages

Courtesy of The Daily Bail

Source – Bloomberg

Citigroup ignored warning signs of Bernard L. Madoff’s Ponzi scheme, and a bank executive knew the con man’s stated trading strategy couldn’t generate the reported returns, the trustee liquidating Madoff’s firm said in a lawsuit.

The unidentified Citibank executive, who was responsible for making recommendations to clients on derivatives, “concluded” by June 2007 that returns reported by a Madoff feeder fund, Fairfield Sentry Ltd., couldn’t have come from the strategy, trustee Irving Picard said in a complaint unsealed yesterday. The executive reached his conclusion after meeting with analyst Harry Markopolos, a whistleblower who also alerted U.S. regulators to the fraud, Picard said.

The Citibank official later communicated with Markopolos orally and in writing, specifically discussing the fraud before the Ponzi scheme was exposed in December 2008, Picard alleged.

“Citi knew, and was on notice of, irregularities and problems concerning the trades reported by BLMIS, and strategically chose to ignore these concerns in order to continue to enrich themselves,” Picard said in the complaint, referring to Madoff’s firm, Bernard L. Madoff Investment Securities LLC.

Picard laid out in the complaint details of a lawsuit he filed under seal in December against New York-based Citigroup and other banks. He is demanding $425 million from Citigroup – money it received “in connection with” a loan to a Madoff feeder fund and a swap transaction with a Swiss hedge fund linked to a second feeder fund, Picard said.

Continue reading at Bloomberg…

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We first got an inkling of Picard’s filing from this Bloomberg story in December.

Citigroup, Bank of America Sued by Madoff Trustee

Citigroup Inc.’s Citibank, Bank of America Corp.’s Merrill Lynch unit and five other banks were sued by the trustee liquidating Bernard Madoff’s firm to recover more than $1 billion for the con man’s defrauded customers.

The banks, which include Natixis SA, Fortis Prime Fund Solutions Bank (Ireland) Ltd., ABN Amro Bank NV, Nomura Bank International Plc. and Banco Bilbao Vizcaya Argentaria SA, received money through Madoff feeder funds when they knew, or should have known, that Madoff’s investments were a fraud, the trustee, Irving Picard, said yesterday in a statement.

Picard, who faces a two-year legal deadline that runs out Dec. 11, has filed hundreds of suits in the past month, seeking more than $34 billion from banks, feeder funds, investors and others alleged to have profited from Madoff’s decades-long Ponzi scheme, the biggest in…
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Wall Street Reform Could Cost Goldman Sachs BILLIONS

Wall Street Reform Could Cost Goldman Sachs BILLIONS

Courtesy of Ryan Grim and Shahien Nasiripour at The Huffington Post 

The proposed financial reforms pending before Congress could cost Goldman Sachs nearly a quarter of its annual profits, Citigroup analysts estimate in a new report.

Goldman, the most profitable securities firm on Wall Street, could lose up to $5.06 in earnings on a per-share basis if Congress passes a bill that forbids banks from trading for their own profit, owning or sponsoring hedge funds and private equity funds, and compelling them to move most of their derivatives dealing into regulated markets, according to the research note.

Combined with a potential fee to recoup taxpayer losses on TARP and higher deposit insurance assessments on its bank, Goldman could lose up to 23 percent of its profits, giving it the distinction of being the firm most impacted by the financial reform legislation.

Morgan Stanley is a close second as the team of Citi analysts, led by Keith Horowitz, estimate that it could lose up to 20 percent of its profits. Up to 18 percent of JPMorgan Chase’s profits are at risk, while Bank of America, the nation’s largest bank by assets, could see up to 16 percent of its profits evaporate.

The so-called "Volcker Rules," which would ban banks from putting their own capital at risk in hedge funds, private equity firms and through proprietary trades, and limit the growth of the largest ones, could shave four percent off the banks’ bottom lines, the Citi analysts estimate. Tighter restrictions on prop trading, which come in the form of a provision pushed by Democratic Senators Carl Levin of Michigan and Jeff Merkley of Oregon, could cost the big banks five percent of their profits.

Combined with the various other aspects of the pending legislation — like compelling banks to hold better-quality capital, making the biggest ones pay more for deposit insurance and robust regulation of heretofore unregulated derivatives — and the nation’s biggest banks could collectively lose up to 11 percent of their annual profits, the Citi analysts estimate in their Wednesday report. Goldman, Morgan, JPMorgan and Bank of America would be the most impacted.

"[O]ne of the biggest areas of risk for the group is tougher trading rules via [a] narrow definition of what constitutes banned proprietary activity," the authors noted. They were also careful to note that while their estimates required…
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Brazil Almost Bought Citibank During Crisis

Brazil Almost Bought Citibank During Crisis

BrazilCourtesy of The Shocked Investor

Newspaper O Estado de Sao Paulo reports that the Brazilian Minister of Mines and Energy, Edison Lobao, revealed today in New York that at the height of the crisis Brazil almost bought Citibank:

"We could have bought and could have had great profit, in addition to prestige," he said. The minister said the decision not to acquire the bank was made by the government as a whole.

Mr. Lobao said that before the U.S. government had bought a third of Citi, the institution sought the Brazilian authorities. He said he did not know the "fair price" which was discussed with Brazil, but, considering the size of the country’sreserves, the country could have purchased a share of the institution.

In late July, Citigroup completed the exchange of securities of $60B that made the U.S an owner of a third of the bank. All the $ 20.3B in preferred stock and hybrid securities and equity securities issued publicly by Citi were exchanged in the offer for common shares, while the federal government shifted about $39.5B of preferred stock for new bonds.

 


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Consumer Confidence? Ha!

Consumer Confidence? Ha!

Courtesy of Karl Denninger at The Market Ticker

Fireworks

Gee, this is a green shoot….

NEW YORK, Oct. 27 /PRNewswire/ — The Conference Board Consumer Confidence Index®, which had declined in September, deteriorated further in October. The Index now stands at 47.7 (1985=100), down from 53.4 in September. The Present Situation Index decreased to 20.7 from 23.0 last month. The Expectations Index declined to 65.7 from 73.7 in September.

The kicker….

 In fact, the Present Situation Index is now at its lowest reading in 26 years (Index 17.5, Feb. 1983). The short-term outlook has also grown more negative, as a greater proportion of consumers anticipate business and labor market conditions will worsen in the months ahead. Consumers also remain quite pessimistic about their future earnings, a sentiment that will likely constrain spending during the holidays."

Let me guess – Citibank’s decision to jack rates to 29.9% didn’t have anything to do with that?

Neither does the gross and outrageous under-reporting of jobless rates by the government?

Neither does the incessant attempts to jack up taxes by state and local governments (instead of cutting spending back to, for example, year 2000 levels)?

Neither does the fact that the very banks who managed to play the "end of the world" card just one year ago, effectively stealing government guarantees and handouts worth some twelve trillion dollars, are now paying record-level bonuses?

Neither does the fact that Bwarney Frank and Chris Dodder are "furious" about the credit card companies rate-jacking people, but they in fact wrote the bill to allow it to happen?

Neither does the Federal Government’s outrageous and insane refusal to acknowledge that we have too much debt, including at the federal level, and you can’t fix a drunk’s problem by giving him a bottle of whiskey?

Spring Shearing Takes Place In Australia

Many people consider The American People to be "sheep."

It appears that The Sheep have watched a cadre of a dozen foxes (the billions of "campaign contributions") and five sheep holding a vote on what’s for dinner, and realized that in such a rigged game the best choice is not to play, kneecapping the foxes’ ability to feast.

Beware if your thesis of "economic recovery" requires consumers…
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Kimble Charting Solutions

Financial Crisis Deja Vu: Home Construction Index Double Top?

Courtesy of Chris Kimble

Most of us remember the 2007-2009 financial crisis because of the collapse in home prices and its effect on the economy.

One key sector that tipped off that crisis was the home builders.

The home builders are an integral piece to our economy and often signal “all clears” or “short-term warnings” to investors based on their economic health and how the index trades.

In today’s chart, we highlight the Dow Jones Home Construction Index. It has climbed all the way back to its pre-crisis highs… BUT it immediately reversed lower from there.

This raises concerns about a double top.

This pr...



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Insider Scoop

A Peek Into The Markets: US Stock Futures Plunge Amid Coronavirus Fears

Courtesy of Benzinga

Pre-open movers

U.S. stock futures traded lower in early pre-market trade. South Korea confirmed 256 new coronavirus cases on Thursday, while China reported an additional 327 new cases. Data on U.S. international trade in goods for January, wholesale inventories for January and consumer spending for January will be released at 8:30 a.m. ET. The Chicago PMI for February is scheduled for release at 9:45 a.m. ET, while the University of Michigan's consumer sentime...



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Zero Hedge

Coronavirus Paralyzes Global Credit Market As New Issuance Crashes To Zero

Courtesy of ZeroHedge View original post here.

In the early days, when virtually nobody paid attention to the coronavirus pandemic which China was doing everything in its power to cover up, markets were not only predictably ignoring the potential global plague - after all central banks can always print more money, or is that antibodies - but until last week, were hitting all time highs. All that changed when it became apparent that for all its data manipulation, China was simply unable to reboot its economy as hundreds of millions of workers refused to believe the government had the viral plague under control, starting...



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Phil's Favorites

The PhilStockWorld.com Weekly Webinar - 02-26-2020

 

For LIVE access on Wednesday afternoons, join us at Phil's Stock World – click here.

Major Topics:

00:02:13 - Indices | S&P 500
00:10:09 - COVID-19 & The Market
00:12:30 - John Hopkins Virus Chart
00:17:00 - DJIA
00:18:22 - INQ | Futures
00:19:23 - STP
00:20:06 - LTP
00:24:46 - GOLD
00:25:45 - Money Talk Portfolio | Butterfly Portfolio
00:27:20 - IMAX
00:30:01 - Checking on the Markets
00:30:54 - Money Talk Portfolio
00:31:00 - Butterfly Portfolio
00:31:08 - Future is Now Portfolio
00:31:12 - Dividend Portfolio...



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Biotech & Health

Could coronavirus really trigger a recession?

 

Could coronavirus really trigger a recession?

Coronavirus seems to be on a collision course with the US economy and its 12-year bull market. AP Photo/Ng Han Guan

Courtesy of Michael Walden, North Carolina State University

Fears are growing that the new coronavirus will infect the U.S. economy.

A major U.S. stock market index posted its biggest two-day drop on record, erasing all the gains from the previous two months; ...



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The Technical Traders

SPY Breaks Below Fibonacci Bearish Trigger Level

Courtesy of Technical Traders

Our research team wanted to share this chart with our friends and followers.  This dramatic breakdown in price over the past 4+ days has resulted in a very clear bearish trigger which was confirmed by our Adaptive Fibonacci Price Modeling system.  We believe this downside move will target the $251 level on the SPY over the next few weeks and months.

Some recent headline articles worth reading:

On January 23, 2020, we ...



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Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

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Chart School

Oil cycle leads the stock cycle

Courtesy of Read the Ticker

Sure correlation is not causation, but this chart should be known by you.

We all know the world economy was waiting for a pin to prick the 'everything bubble', but no one had any idea of what the pin would look like.

Hence this is why the story of the black swan is so relevant.






There is massive debt behind the record high stock markets, there so much debt the political will required to allow central banks to print trillions to cover losses will likely effect elections. The point is printing money to cover billions is unlikely to upset anyone, however printing trillions will. In 2007 it was billions, in 202X it ...

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Members' Corner

Threats to democracy: oligarchy, feudalism, dictatorship

 

Threats to democracy: oligarchy, feudalism, dictatorship

Courtesy of David Brin, Contrary Brin Blog 

Fascinating and important to consider, since it is probably one of the reasons why the world aristocracy is pulling its all-out putsch right now… “Trillions will be inherited over the coming decades, further widening the wealth gap,” reports the Los Angeles Times. The beneficiaries aren’t all that young themselves. From 1989 to 2016, U.S. households inherited more than $8.5 trillion. Over that time, the average age of recipients rose by a decade to 51. More ...



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Digital Currencies

Altcoin season 2.0: why bitcoin has been outgunned by crypto rivals since new year

 

Altcoin season 2.0: why bitcoin has been outgunned by crypto rivals since new year

‘We have you surrounded!’ Wit Olszewski

Courtesy of Gavin Brown, Manchester Metropolitan University and Richard Whittle, Manchester Metropolitan University

When bitcoin was trading at the dizzying heights of almost US$2...



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ValueWalk

What US companies are saying about coronavirus impact

By Aman Jain. Originally published at ValueWalk.

With the coronavirus outbreak coinciding with the U.S. earnings seasons, it is only normal to expect companies to talk about this deadly virus in their earnings conference calls. In fact, many major U.S. companies not only talked about coronavirus, but also warned about its potential impact on their financial numbers.

Q4 2019 hedge fund letters, conferences and more

Coronavirus impact: many US companies unclear

According to ...



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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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