Citigroup Q4 07 earning cut

overall --earning loss of $9.83 billion ($1.99 per share vs 1.03 exp) in the fourth quarter, bigget loss in 196 history. Revenue fell 70% to $7.22 billion --18 bil write-down and credit loss in trading business --4 bill credit loss in consumer business --it is raising another $14.5 billion in capital by selling stakes to investors including Singapore's Government Investment Corp., former CEO Sandy Weill, Saudi Prince Alwaleed and New Jersey's investment division. The bank will also cut its dividend by 41%. --Write-downs of $17.4 billion on sub-prime related direct exposures. These exposures on September 30, 2007 were comprised of approximately $11.7 billion of gross lending and structuring exposures and approximately $42.9 billion of net ABS CDO super senior exposures (ABS CDO super senior gross exposures of $53.4 billion). On December 31, 2007, sub-prime related direct exposures were comprised of approximately $8.0 billion of gross lending and structuring exposures and approximately $29.3 billion of net ABS CDO super senior exposures (ABS CDO super senior gross exposures of $39.8 billion). subprime exposure ----direct exposure 55 bil in Q3 ( quoted from 10-q in Q3: The $55 billion in U.S. sub-prime direct exposure in S&B as of September 30, 2007 consisted of (a) approximately $11.7 billion of sub-prime related exposures in its lending and structuring business, and (b) approximately $43 billion of exposures in the most senior tranches (super senior tranches) of collateralized debt obligations which are collateralized by asset-backed securities (ABS CDOs). ) ----indirect exposure: $70 mil of SIVs (The SIVs have no direct exposure to U.S. sub-prime assets and have approximately $70 million of indirect exposure to sub-prime assets through CDOs which are AAA rated and carry credit enhancements). Citi put $58 bil of SIVs to its balance sheet in Dec. its indirect subprime exposure must be above $70 mil... SIV exposure $ 58 bil --Approximately 54% of the SIV assets are rated triple-A and 43% double-A by Moodys, with no direct exposure to sub-prime assets and immaterial indirect sub-prime exposure of $51 million. In addition, the junior notes, which have a current market value of $2.5 billion, are in the first loss position. (Quoted in Dec 14th http://www.sec.gov/Archives/edgar/data/831001/000114420407067635/v097312_ex99-1.htm) --potential loss: a.MBS - US resid. 7% of 58 bil, loss -10 - 20%, 0.4 bil - 0.8 b.other SF, 32% of 58 bil, -3-10%, 0.56 bil - 1.6 bil c.Financial Institute debt, 60% of , loss -4 - 10%, 1.4 bil - 3.5 bil --total: 2.5 bil - 6 bil Comments: --loss in SIVs will be another drag, possibly at $2.5 bil loss - 6 bil (if further downgrade occur, it is highly possible) --loss in ABS CDO is 13 bil of out 42.9, close to 30% loss rate, in line with to ABX trading price. --direct exposure of ABS CDOs, tied to ABX AAA, now trading around 70% (probably bottom out 60% by Q1) --long in the Q1 2008