CROOK ALERT! CitiGroup Fire Sale

Where's Huey when we need him?

Sandy Weill

CitiGroup Founder Sandy Weill
CitiGroup Founder Sandy Weill

CitiGroup's Sorry History

Rob Cox of the New York Times 1-15-09 provides a brief retrospective on CitiGroup's sorry history of questionable and sometimes illegal actions. Cox's article is linked below.

My own unsatisfactory personal experiences with a CitiBank "driver's edge" credit card are enough to make me believe almost anything about this bloated octopus of a financial enterprise which American taxpayers are currently being asked fund to avoid its collapse. Citi's credit card operation either invented or embraced the sleaziest "tricks and traps" for unwary credit card holders--universal default, temporary teaser rates to lure transfers of balances, inflated foreign currency transaction fees, excessive late fees and interest charges which rival or exceed the methods of the Mafia juice racket.

Cox writes "CitiGroup has shown an unrivaled ability to step into nearly every mess the financial industry has concocted over the last two decades. The 1992 merger of Sandy Weill's Travelers Group with the former Citicorp only amplified the combined group's propensity for getting it wrong."

--The Group loaded up on illiquid leveraged loans and mortgage assets that have led to net losses of $20 billion and forced the government to make two capital injections totallint $45 billion.

--Going back a few years, Citi was knee deep in tainted research scandals which resulted in the banning of Citi telecom analyst Jack Grubman from the industry. [During this period it came to light that Weill had instructed CitiGroup's charitable foundation to make a big contribution to an elite school to help Grubman get his child admitted to the school. ] Citi had its tentacles in the collapse of Enron and WorldCom and the failure of the Italian dairy company, Parmalat.

--Citi was also involved in an attempt to manipulate the European government bond market through Citi's self-described "Dr. Evil trade."

Here's a link to Rob Cox's brief article-

http://www.nytimes.com/2009/01/15/business/15views.html?_r=1&scp=1&sq=Rob%20Cox&st=cse

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Reserve Fund Accused by Massachusetts Regulators

 

State regulators in Massachusetts have accused top executives of the Reserve Fund of lying to shareholders about the safety of their investments hours before the firm’s largest money fund disclosed that its share price had fallen below a dollar — and then giving big shareholders first crack at avoiding losses.

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Comments 18 comments

AEvans profile image

AEvans 7 years ago from SomeWhere Out There

Another corrupt bank looking for handouts, our bank was JP Morgan and the stole our home right from under our noses, after giving them 6,000 to do a loan modification they mysteriously lost the ppw , never sent a letter that our home was being auctioned and when I followed up they requested another $9,000 to pull it off the auction block. Needless to say we said kiss our you know what dumped the $3,000 dollar mortgage and now we have a mortgage at $840.00 the house is not as big, but who cares. Our neighbors were not happy as our home was worth 358,000 and the sold it for 101,000 which broke my heart, when is our government going to work with the people and not the banks? This is a great article and I am happy that you placed it out there. :)


Ralph Deeds profile image

Ralph Deeds 7 years ago Author

Just all the big Wall Street banks and mutual funds have been stuck with settlements in the billions in recent years for illegal or unethical practices. You name the bank and they have been caught screwing their customers--CitiGroup, Merrill Lynch, Fidelity, JPMorgan, Morgan Stanley have all settled big cases of course without admitting or denying guilt and without anyone going to jail.


Storytellersrus profile image

Storytellersrus 7 years ago from Stepping past clutter

We had a terrible experience with Citi credit cards. They misled the public and particularly families with their advertising- and also college kids. I wanted to call the networks and beg them to take these ads off. It's such a Catch 22- they screw us but we are expected to help them out when they go under or suffer the consequences of more unemployed and a weakened economy.


SirDent 7 years ago

The government will help them just as they did before. I can imagine the executives at Citibank need a vacation about this time. Heard just a touch about this on the news earlier.


Ralph Deeds profile image

Ralph Deeds 7 years ago Author

Storytellers, SirDent, so true. I've been irked at Sandy Weill ever since he donated money to change the name of my alma mater's medical school to the Weill Medical School.


ColdWarBaby 7 years ago

Thank you Ralph for proving more every day that capitalism is the vile, immoral and soulless racket I've always known it to be.


Ralph Deeds profile image

Ralph Deeds 7 years ago Author

Well, my motive is more like let's try harder to make the market work the way it's claimed to work.


ColdWarBaby 7 years ago

Ralph, you're a mature intelligent gentleman. You can't be that naive. Noblesse Oblige is a myth.


Ralph Deeds profile image

Ralph Deeds 7 years ago Author

Well there's plenty of room for improvement, I'll grant you that!


ColdWarBaby 7 years ago

Sir, you are a diplomat and that's not a bad thing. There are far too few in the world today.


pgrundy 7 years ago

I got a Citi MasterCard in 1991. I missed a payment in 2001 when I left my husband, called them and explained and they hiked my rate to 29.7% for the next three years. Most of the debt on the card was from my ex's business--I foolishly put it on the card trying to 'help' while I still thought the marriage could be saved. In fact, he badgered me constantly to put business crap on the card. But I did it, so it's not his fault. I did it and I was determined to pay it and take responsibility for it.

In spite of advice from my attorney to file bankruptcy, I was intent on doing the right thing and continued to try to pay down my balance until I lost my job in October of 2008. I sat down and figured out what I'd paid them over nearly 20 years and it made me sick. I'd paid my debt to them many, many times over, and every time I'd start to make some progress--chipping it down a bit more, they'd juggle things around so that my balance stayed put. In 20 years I missed one payment. I can barely talk about them without melting down, but what really makes me mad is me. I should have listened to my lawyer in 2001.

They make it so you CAN'T do the right thing even if you want to. Why not cut off my line, REDUCE the rate, and let me pay this thing off? No, they don't want that. They want to gouge you, then sell off the debt to a collector if you get sick of being raped. They're just legal loan sharks.

I filed Chapter 7 last month. I was sick about it for weeks but now that I've done it I feel like I've just come out of a bad dream. I hate Citi. I mean it, I HATE them. I hate that even one cent of my tax dollars is going to them.

I know I did the right thing. There are no jobs for me here, and now we have enough. We'll be OK. We'll never get credit again and that's fine. But it's sickening to me, what is happening. Even the credit reform bill recently passed is not nearly enough of restraint. It's just a slap on the wrist.

I would love to see them go down. Credit cards are the devil, seriously.


Ralph Deeds profile image

Ralph Deeds 7 years ago Author

CitiGroup is worse than the Mafia. I had a similar experience three years ago and cancelled my CitiGroup Dirver's Edge card. Sorry to hear about your difficulties.


pgrundy 7 years ago

Actually, I'm glad it came to this. I could have kept that up the rest of my life if I hadn't lost my job at the bank. I'm a lot happier now. Life is much simpler.


prince1244 7 years ago

Hey Ralph, Until we the people become more informed and engaged, these fat cats will always screw the people every chance they get. Example, some are complaining the government is now the owners of GM, would they prefer GM be own by China.


sir slave profile image

sir slave 5 years ago from Trinity county CA.

Absolutley awesome post ralph.

citi group is one of those banks we should have broken up in the fall of 08' keep up the corporate exposes' going into the election cycle!! dont forget to implicate as many politicians as you can as this will increase your tag count rapidly!


Ralph Deeds profile image

Ralph Deeds 5 years ago Author

Thanks for the comment. We seem to be on the same wavelength.


RayNorthAuthor profile image

RayNorthAuthor 4 years ago from Portsmouth

How about Deutsche Bank? My (second hand) experience of them in Spain was tremendous.....until the economic problems bit hard. Friends had a mortgage with them that was in yen and the exchange rate went haywire. Deutsche Bank offered to change it into Euros but this could only be done quarterly...so it was impossible to tell if it was beneficial or not for them (the friends). It made no difference to DB so they simply watched them (the friends) go bankrupt as the re-payments went off the scale.

Yes...'Caveat Emptor' and 'Read all the small print' etc, but does everyone do that? And even if they do, do they get the conditions changed if they don't agree with them??


Ralph Deeds profile image

Ralph Deeds 4 years ago Author

Great comment! Thanks.

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