News about Citigroup is not good.  For a second straight quarter Citigroup Inc. has shown a loss.  In first quarter 2008, they lost $5.1 billion in write-downs spanning mortgages to leveraged loans.  This was a lot more than Wall Street analysts felt they would drop, but it also showed that the write-down total was less than expected and revenues were greater than expected.  Citigroup shares bounced in early morning trading due to these figures.

Much is blamed on $6 billion in write-downs on collateralized debt obligations, $3.1 billion on leveraged loans, $1.6 billion on Alt-A mortgages, $1.5 billion on auction-rate securities, another $1.5 billion tied to downgrades of key monoline insurers, who guarantee the timely repayment of bond principal and interest when an issuer defaults.

Citibank has a strategy, according to the CEO, Vikram Pandit.  He stated that “As we move into the second quarter and beyond, we will continue to divest non-strategic assets and allocate capital to the products and regions that will drive increased revenues, enhance the value of our franchise, and ultimately, maximize shareholder value.”  Citi reports that “higher delinquencies on first and second mortgages, unsecured personal loans, credit cards and auto loans” are much to blame for the position they are in.

We see a lot of talk on the Hill about stimulus packages and relief plans, but as long as Repubs and Dems battle it out toe to toe on the floor, and work their hardest to please their constituents, and yes, lobbyists, then it appears that it is a stalled situation.  It appears Citi has not done a very good job of covering their backsides, and now the large bank is suffering.  Tough times, indeed.