Sometimes we business writers toss around corporate earnings numbers without providing the necessary context. For example, markets are reacting today with a shudder to the news that financial behemoth Citigroup lost nearly $10 billion in the last 90 days of 2007. The multinational giant also reduced the value of its mortgage loan portfolio by more than $18 billion.
Clearly, that’s a lot of money. But how much? Well, in Oklahoma terms, Citibank lost enough money in three months to buy every share of stock of OGE and ONEOK with enough left over to devour Sonic Corp. for dessert.
And the write-down of its portfolio is nearly enough to buy each and every share of Chesapeake Energy Corp.
In case you’re wondering just how big the subprime meltdown is, it’s huge and appears to be spreading.
There’s no way to spin this kind of news, as evidenced by Citigroup CEO Vikram Pandit’s statement:
“Our financial results this quarter are clearly unacceptable. Our poor performance was driven primarily by two factors – significant write-downs and losses on our sub-prime direct exposures in fixed income markets, and a large increase in credit costs in our U.S. consumer loan portfolio. ”