55% Chance Of Made-In-China World Recession, And Rich Countries Are Out Of Ammo: Citigroup

The U.S.’s fourth-largest bank is betting the world is headed for a recession.

In a note published Tuesday, the chief economist at Citigroup, Willem Buiter, said the global economy faces a 55 per cent chance of falling into recession, thanks to the downturn in China.

What’s worse, Buiter believes that developed countries can do little to stop it, because they’ve already used up their ammunition fighting the last economic slowdown.

Citibank Forced To Pay $700 Million To Customers

Citibank will be required to pay $700 million to 8.8 million customers for illegal credit card practices, the Consumer Financial Protection Bureau said Tuesday.

Between 2002 and 2013, Citibank sold its credit card customers add-on services that deceptively promised to add payment flexibility by deferring or canceling payments during hard times, and to protect against fraud and identity theft.

Wall Street Pays Bankers to Work in Government and It Doesn't Want Anyone to Know

Citigroup is one of three Wall Street banks attempting to keep hidden their practice of paying executives multimillion-dollar awards for entering government service. In letters delivered to the Securities and Exchange Commission (SEC) over the last month, Citi, Goldman Sachs and Morgan Stanley seek exemption from a shareholder proposal, filed by the AFL-CIO labor coalition, which would force them to identify all executives eligible for these financial rewards, and the specific dollar amounts at stake. Critics argue these “golden parachutes” ensure more financial insiders in policy positions and favorable treatment toward Wall Street.

“As shareholders of these banks, we want to know how much money we have promised to give away to senior executives if they take government jobs,” said AFL-CIO President Richard Trumka in a statement. “It’s a simple question, but the banks don’t want to answer it. What are they trying to hide?”

Citigroup Wrote the Wall Street Giveaway The House Just Approved

A year ago, Mother Jones reported that a House bill that would allow banks like Citigroup to do more high-risk trading with taxpayer-backed money was written almost entirely by Citigroup lobbyists. The bill passed the House in October 2013, but the Senate never voted on it. For months, it was all but dead. Yet on Tuesday night, the Citi-written bill resurfaced. Lawmakers snuck the measure into a massive 11th-hour government funding bill that congressional leaders negotiated in the hopes of averting a government shutdown. President Barack Obama is expected to sign the legislation.

Larry Summers' Citigroup Problem

Former Treasury Secretary Larry Summers' consulting gig with the banking behemoth Citigroup could come back to haunt him if he is nominated to succeed Ben Bernanke as chairman of the Federal Reserve. Bernanke's term expires in January, and Summers and Janet Yellen, the central bank's vice-chair, appear to be front-runners for the post, with media reports suggesting that President Barack Obama is fond of the controversy-prone Summers. But there may be a hitch with a Summers appointment. After Obama took office in 2008, he enacted sweeping ethics rules that say that no presidential appointee can work on matters directly related to a former employer for two years after taking a government job. That means that unless Obama grants Summers an exemption from the rules—a move that could be politically controversial—the former Treasury secretary will have to recuse himself from a slew of Fed decisions involving Citi, which is the third-largest bank in America. Experts say those recusals could hamper Summers' ability to run the Fed effectively.

Citigroup Reports 30 Percent Jump In Profits

BOSTON -- Citigroup reported a first-quarter profit of $3.8 billion, a 30 percent surge from last year as the bank’s securities and trading operation boosted the company in beating Wall Street’s expectations.

Citi, the third-largest US bank by assets, said it recorded higher revenues, lower losses on soured loans and a wider spread between what it costs to borrow and what it earns off loans and investments, helping the company achieve its highest quarterly profit in three years.

Judge Questions Fairness Of Citigroup's $590 Million Settlement

(Reuters) - A Manhattan federal judge on Monday signaled he will not rubber-stamp Citigroup Inc's proposed $590 million settlement of a shareholder lawsuit accusing it of hiding tens of billions of dollars of toxic mortgage assets.

U.S. District Judge Sidney Stein asked lawyers for the bank and its shareholders to address several issues at an April 8 fairness hearing, including requested legal fees and expenses of roughly $100 million, and the absence of payments by former Citigroup executives.

Citigroup Investors Cheer Massive Layoffs, Hope For More

If you're one of the lucky 11,000 employees whose holidays just got ruined by Citigroup, here's some cold comfort: You'll have company soon enough.

Citigroup, once upon a time the biggest bank in the U.S., but shrinking steadily, on Wednesday announced it was laying off 11,000 workers around the world, or about 4 percent of its 260,000-human work force.

Citigroup Reaches $590 Million Settlement Over Financial Crisis Charges

NEW YORK, Aug 29 (Reuters) - Citigroup Inc has reached a $590 million settlement of litigation accusing the bank of fraudulently concealing tens of billions of dollars of exposure to risky collateralized debt obligations heading into the global financial meltdown.

The settlement is one of the largest arising from the 2007-2008 crisis. It resolves claims that Citigroup failed to take timely writedowns on the CDOs, many of which were backed by subprime mortgages, and that shareholders suffered billions of dollars of losses once the risks were realized.

Moody's Downgrades RBC, Among Several Major Banks

Ratings agency Moody's Investor Service Thursday downgraded the credit ratings of Canada's biggest bank, the Royal Bank of Canada, and 14 other banks with global operations.

Moody's cut RBC's long-term deposit rating by two notches to Aa3, saying it faces a high probability of needing government support because of the exposure of its global investment banking operations to a possible financial crisis.

Why Judge Rakoff Was Right to Block the Citigroup Settlement

On a day when Barney Frank, the feisty Democrat who co-authored the 2009 financial-reform bill, announced that he will be stepping down from Congress, it was fitting that the fallout from the financial crisis of 2007-2008 was back in the headlines. In refusing to accept the $285 million proposed settlement between the Securities and Exchange Commission and Citigroup over the sale of toxic mortgage securities, Judge Jed S. Rakoff, of the U.S. District Court, did the American public a great service.

At issue is not just the $700 million in losses that investors suffered as a result of purchasing a particularly unwholesome credit default obligation (C.D.O.) that Citi put together, marketed, and bet against just as the housing market was collapsing. What is at stake is the government’s overall failure to bring to book Wall Street for its conduct during the credit bubble. More than three years after the collapse of Bear Stearns and Lehman Brothers, none of the other Wall Street firms involved in creating and selling subprime securities has received anything more than a slap on the wrists. And so far the Justice Department hasn’t brought criminal charges against anybody.

Citigroup-SEC $285m toxic mortgage deal rejected

A US judge has rejected a $285m (£184m) settlement between Citigroup and Wall Street's regulator, the SEC, over the sale of toxic mortgages.

Federal court judge Jed Rakoff ordered a trial, saying the settlement was "neither reasonable, nor fair, nor adequate, nor in the public interest".

The SEC claimed Citigroup sold $1bn worth of mortgage assets and then bet that their value would fall.

Neither the SEC nor the US's third-largest bank had any immediate comment.

In a written opinion, the Manhattan judge said the allegations against Citigroup should go to trial.

Under the settlement, agreed in October, Citigroup was to pay $285m to compensate investors for losses on the mortgage assets, which plunged in value months after the bank sold them in 2007.

Investors lost $700 million, according to the SEC, while Citigroup made about $160 million in profits.

The trial would seek to establish clarity about the financial markets and the Security and Exchange Commission's responsibility to uncover the truth, the judge said.

"Although this [settlement] would appear to be tantamount to an allegation of knowing and fraudulent intent... the SEC, for reasons of its own, chose to charge Citigroup only with negligence," Judge Rakoff said.

He said that the settlement, in which Citigroup did not admit or deny the accusations, did not give him enough information to know whether the deal was fair or correct.

"The court concludes, regretfully, that the proposed Consent Judgment is neither fair, nor reasonable, nor adequate, nor in the public interest," the judge said.

Origin
Source: BBC 

Did You Hear the One About the Bankers?

CITIGROUP is lucky that Muammar el-Qaddafi was killed when he was. The Libyan leader’s death diverted attention from a lethal article involving Citigroup that deserved more attention because it helps to explain why many average Americans have expressed support for the Occupy Wall Street movement. The news was that Citigroup had to pay a $285 million fine to settle a case in which, with one hand, Citibank sold a package of toxic mortgage-backed securities to unsuspecting customers — securities that it knew were likely to go bust — and, with the other hand, shorted the same securities — that is, bet millions of dollars that they would go bust.       

It doesn’t get any more immoral than this. As the Securities and Exchange Commission civil complaint noted, in 2007, Citigroup exercised “significant influence” over choosing $500 million of the $1 billion worth of assets in the deal, and the global bank deliberately chose collateralized debt obligations, or C.D.O.’s, built from mortgage loans almost sure to fail. According to The Wall Street Journal, the S.E.C. complaint quoted one unnamed C.D.O. trader outside Citigroup as describing the portfolio as resembling something your dog leaves on your neighbor’s lawn. “The deal became largely worthless within months of its creation,” The Journal added. “As a result, about 15 hedge funds, investment managers and other firms that invested in the deal lost hundreds of millions of dollars, while Citigroup made $160 million in fees and trading profits.”

Citigroup to Pay Millions to Close Fraud Complaint

WASHINGTON — As the housing market began its collapse, Wall Street firms and sophisticated investors searched for ways to profit. Some of them found an easy method: Stuff a portfolio with risky mortgage-related investments, sell it to unsuspecting customers and bet against it.

Citigroup on Wednesday agreed to pay $285 million to settle a civil complaint by the Securities and Exchange Commission that it had defrauded investors who bought just such a deal. The transaction involved a $1 billion portfolio of mortgage-related investments, many of which were handpicked for the portfolio by Citigroup without telling investors of its role or that it had made bets that the investments would fall in value.

In the four years since the housing market began its steady descent, securities regulators have settled only two cases related to the financial crisis for a larger sum of money. This is also the third case brought by the S.E.C. accusing a major Wall Street institution of misleading customers about who was putting together a security and about their motive. Goldman Sachs and JPMorgan Chase & Company both settled similar cases last year.