Overnight we heard news of more legal charges coming at Citigroup. The same Citi that’s predecessor National City Bank was central in creating the leverage bubble and crash of 1929; the same Citibank that paid billions in fines for its role in the frauds at Enron, Worldcom and Global Crossings in 2001, the same Citi that has been saved from a deserved demise more than once by taxpayer bailouts, and most recently in 2008. In the latest round of ‘liar’s poker’, Citi announced that it was reducing its previously reported profit due to a $600 million increase in legal charges which brings such expenses to $1.55 billion and cut net income to $2.84 billion.
How to do you repeatedly break the law and get away with it? Its amazing what latitude a few billion in legal fees can buy you. Not to mention the untolled millions ‘invested’ in politicians and policy makers, so that when you do implode on reckless risk taking every few years, the taxpayers reimburse your losses. It’s an incredible business model. See: Longer legal shadow falls over Citi
“The thunder grows louder the closer you are to the lightning. In that sense, Citigroup ’s surprise cut to third-quarter results because of higher-than-reported legal expenses, coupled with large litigation charges at Deutsche Bank , UBS and Barclays earlier this week, suggests a storm is about to break.”
As it did with gangsters in the ’20’s, today the world glamorizes and celebrates Banksters at a crippling cost to everything else.
Michael Lewis was on Charlie Rose last night talking about the 25th anniversary edition of his first Wall Street tell-all Liar’s Poker. Here is a direct video link.