Citigroup Inc.losses continue in loan sector !

NEW YORK (AP) -- Citigroup Inc. became the latest bank to take a cautious view of consumers' credit problems, reporting a $7.77 billion fourth-quarter loss due to failed loans and the costs of repaying $20 billion in government bailout money..


Even with the loss, Citigroup, the hardest hit of the big U.S. banks during the credit crisis and recession, plans to give big bonuses this month to its top employees.

The earnings report Tuesday, which met analysts' expectations, reflected Citigroup's struggles and changing status in the banking industry. The company was forced to set aside $8.18 billion to cover the loans consumers can't repay, joining other big lenders who are still losing money on loans. But Citigroup, having been forced to shed its big investment banking and brokerage businesses during the banking crisis, lacked those buffers against losses that other major financial companies still have.

The company's focus, therefore is on loans, which are deeply troubled but showing some very early signs of improvement. For example, the addition to Citigroup's loan reserves was down 10 percent from the third quarter, and 36 percent from a year earlier.

And John Gerspach, Citigroup's chief financial officer, noted during a conference call with the media that the number of mortgage and credit card loans that were newly delinquent, or between one and three months past due, had started to stabilize and even drop in some of its lending portfolios.

However, "the U.S. credit story is still very much developing," Gerspach said.

Gerspach's caution was similar to that of JPMorgan Chase & Co. when it reported Friday that it earned $3.28 billion during the fourth quarter thanks to its strong investment banking unit. JPMorgan said it set aside $7.28 billion for failed loans during the quarter, nearly identical to the amount it reserved for bad loans during the final quarter in 2008. It also warned that it didn't know when it would be able to stop adding to its loan reserves.

Gregg Smith, a senior managing director at restructuring firm Conway MacKenzie, said Citigroup's results show the lending business is stabilizing. But he also noted it will be a long time before banks like Citigroup are strong enough to lend at historical norms. Many economists and investors are concerned that this trend could slow the economic recovery.

"They're just crawling out of the ditch now," Smith said of banks.

2009 was a year of drastic change at Citigroup, and it may turn out to have the poorest fourth-quarter showing among the big banks because it lacks the big investment bank and trading operations that have helped other companies like JPMorgan Chase offset their losses from bad loans.

The bank's loss after accounting for payment of preferred dividends came to almost $7.77 billion, or 33 cents per share. That compared with a loss of $18.16 billion, or $3.40 a share, a year earlier. In the third quarter of 2009, it lost $3.24 billion after paying dividends. The latest results were in line with analysts' expectations, according to Thomson Reuters.

"They're trying to keep up with firms in a much better position," Alois Pirker, a research director at consultancy Aite Group, said of Citigroup. "Because of that, (Citigroup is) in a higher risk position."

Pirker said the bank has done well in recent quarters to control costs. Now its profitability will turn on how its loan portfolios perform this year, he said.

By repaying the bailout money, Pirker said Citigroup is betting the economy will recover this year because it is removing a safety net of government support.

But paying the government back also frees Citigroup of restrictions on how much it can pay its employees. Like other banks that received bailout money, Citigroup had to win approval for its 2009 compensation from federal pay czar Kenneth Feinberg.

The bank said previously it will issue $1.7 billion in additional stock as part of a restructured compensation program; the stock is being issued instead of cash payments employees would have received in the past.

Gerspach said average compensation per employee, which includes salary, benefits and bonuses, in 2009 was about $90,000, about 1 percent lower than in 2008. In total, Citigroup spent $25 billion on compensation costs in 2009, down 20 percent from the year before. The average compensation per employee did not decline as fast because of the job cuts.

JPMorgan said Friday that its average compensation per employee rose to $121,124 in 2009 from $101,110 a year earlier.

Citigroup did not disclose the size of the bonus pool or how big cash bonuses would be for 2010. The company will no longer be under compensation restrictions this year because it repaid the bailout money.

The bank, which received $45 billion in government bailout money, repaid $20 billion during the fourth quarter and raised an equal amount of capital to fund the repayment.

Citigroup said it recorded an after-tax loss of $6.2 billion for expenses related to the bailout repayment. The government has converted the remaining $25 billion of the bailout money it gave Citigroup into a 34 percent stake in the bank. The government is planning to sell its stake in the bank during the next year.

Citigroup shed 100,000 jobs during the year and completed 14 asset sales, including the Smith Barney brokerage and Japanese units Nikko Cordial Securities and Nikko Asset Management.

The bank's stock rose 12 cents, or 3.5 percent, to $3.54 in afternoon trading. The stock price is perhaps the clearest indication of how far Citigroup fell during the banking crisis and recession; at the stock market's peak in October 2007, it traded at $45 a share.

For the full year, Citigroup lost $1.61 billion, or 80 cents per share. It lost $27.68 billion, or $5.61 per share in 2008.

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IBM'S Revenue Growing

SAN FRANCISCO (AP) -- IBM Corp. said Tuesday that it managed a 9 percent increase in profit in the last quarter as the technology company's revenue grew for the first time in a year and a half.

It also offered a slightly better forecast for 2010, although IBM already had been telling investors it was "well ahead" of the pace it would have needed to reach its previous target. IBM shares dipped in extended trading.

The revenue boost in the latest quarter, which ended Dec. 31, was just under 1 percent. And it was helped by currency fluctuations. At constant values for the dollar, IBM's revenue would have dropped 5 percent. But even the slight increase was notable because the last time IBM's revenue had risen was the July-September quarter in 2008. Some analysts have been worried that IBM would have trouble continuing its streak of using cost cuts to squeeze out higher profits.

Still, the stock slipped $2.68, or 2 percent, to $132.00 in extended trading, possibly because investors were expecting even better. IBM shares had risen 1.8 percent to close at $134.14 before the earnings report.

"I think IBM is really doing great. Having said that, it's difficult to get excited at this valuation of it -- we're talking a single-digit revenue growth company," said Brian Marshall, an analyst with Broadpoint.AmTech. "When I look at the environment improving, there's going to be a lot more leverage at other companies."

IBM said it earned $4.8 billion, or $3.59 per share in the last three months of 2009, up from $4.4 billion, or $3.27 per share, a year earlier. Analysts surveyed by Thomson Reuters expected $3.47 per share.

Revenue was $27.2 billion, versus $27.0 billion in the fourth quarter of 2008. Analysts had expected flat revenue of $27.0 billion.

IBM's revenue in services and software rose, while hardware fell. However, the hardware division's decline wasn't as steep as in previous quarters.

IBM's results don't always track with the direction of the overall economy, but the higher revenue is a sign that corporations are resuming to normal patterns of spending on technology. IBM also said it signed $18.8 billion in new services contracts in the quarter, up 9 percent from a year earlier. Revenue from those contracts mostly will be booked in the coming years.

Intel Corp. offered this earnings season's first indication of a tech recovery last week. Intel posted higher revenue and the company's highest-ever gross profit margin, driven in large part by better sales of microprocessors for server computers. That shows corporations are spending more on their computing systems after keeping tighter budgets during the recession.

IBM said it expects profit of at least $11 per share in 2010. That is higher than IBM's previous prediction for $10 to $11 per share in profit.

In the first quarter, revenue is expected to be $22.8 billion to $23.0 billion. Analysts were predicting $22.3 billion.

IBM, which is based in Armonk, N.Y., has impressed investors by wringing more profit even in bad times. To do it, IBM has leaned on its ability to cut its own costs and to sell its technology services as a way for other companies to save money. IBM shares have risen more than 50 percent in the past year.

For all of 2009, IBM's net income rose 9 percent to $13.4 billion while revenue fell 8 percent to $95.8 billion.

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Nation's labor secretary demand for safty job and workers' rights.

Shortly after she became the nation's labor secretary, warned Hilda Solis corporate America, there was "a new sheriff in town."

Less than a year into his term, the pictorial expression of the authority is unmistakable. Their aggressive initiatives to strengthen enforcement and crack down on companies that have sent the security rules violations in the workplace Employers are scrambling to ensure they follow the rules.

The changes are a departure from the policies of former Solis', Elaine Chao. You keep major presidential campaign, Barack Obama, promised funding for the Occupational Safety and Health Administration, enforcement and maintenance workers increase in hazardous industries.

Solis made a sensation in October when OSHA proposed the biggest fine in its history on oil giant BP PLC, because of potential safety problems in 2005 after an explosion at the refinery in Texas City.

Anchorage to pay less attention, they just hire 250 new investigators to protect employees against being cheated of wages and overtime. It also began a new program to examine business records to ensure that employees make accurate injury and illness reports. And it proposes new standards for protecting workers from industrial dust explosions - an attempt by the Bush administration long resistance.

Some companies say they prefer a collaboration between government and business - what the Bush administration as "compliance assistance."

"Our members are concerned that the department changed its emphasis from compliance assistance once more from the" Gotcha "or aggressive enforcement first approach," said Karen Harned, executive director of the National Federation of Independent Business small business legal center.

Other entrepreneurs suggest that the rate of fall-related deaths and injuries at work actually downs in the previous government's record, while the agency also helped the staff raises record amount of overtime and arrears for violations of minimum wage. Chao has said that success will help the result of collaboration with the company, they understand the many regulations have been.

Keith Smith, a spokesman for the National Association of Manufacturers, said his members want to "build on the progress further and to recognize what works."

But in November report from the Government Accountability Office suggested that there is widespread unreported questions about workplace safety. Researchers cited evidence that some employers pressure workers not diseases and injuries and urged OSHA report, to be more competitive in the review of business records.

Labor's spokesman Jaime Zapata said the idea to help businesses understand the rules, is still an important part of the strategy for the agency, along with stepped-up enforcement. Solis wants to hire 100 new inspectors, OSHA next year.

"Compliance is not created by the last administration support," said Zapata.

The changes were praised by leaders of organized labor, the millions spent to help Obama elected prepared. Solis, a former California congressman and daughter of immigrants, who were both organized, is a favorite of unions and a longtime advocate of workers' rights.

"We will not rest until the law is followed by every employer and every worker is treated, and adequate compensation," Solis said last month that they represent a new national information campaign to describe that workers know their rights, on labor.

The massive fine against BP certainly caught the attention of the public, but other companies also pay a heavy price for violations of safety rules.

Two months after the new fiscal year, OSHA has already been mentioned six companies involved in "extreme" violations that lead to the highest punishment. There were only four such serious cases throughout last year.

Solis said her agency in the year 90 new rules and regulations will be addressed next year. A change would give workers more information about how their pay is calculated. Another option would be to inform employers if they sought advice from anti-union labor consultants.

Glenn Spencer, executive director of the U.S. Chamber of Commerce Workforce Freedom Initiative, "said Solis not yet ready to hear some of the concerns that his faction. But he was most concerned about the possibility that the Labor Party officials will try to be too expensive ergonomics rules again . To make these rules would protect the companies that are working to redesign rooms for employees from repetitive strain injuries.

One of the first acts of the Bush administration was to repeal the ergonomics rules adopted in the Clinton administration. Solis Supports the rules at the time and not on the plans to revive those talks.

:Source:

Want to make money? This must following money making list for you!!

Looking for money tips for the next decade? Here are a half dozen:

1 Pay off your credit cards already. Then cut them up. Obvious but true. That saves you 15% or more. A cert to beat the market.

2 Slash your taxes. They're only heading in one direction. Make the full use of your 401(k) and IRA allowances each year. If you have children, save in a 529 college-savings plan too.

3 Run the numbers on buying a home. Real estate has plunged, and fixed-rate mortgages look cheap below 5%. Do the math to see if owning now makes more sense than renting.

4 Weed out your high-fee mutual funds. Most funds charge a bundle: Few are worth it. Unless a fund is exceptional, you're better off in a low-cost index fund.

5 Check your inflation risk. Long-term bonds, including Treasurys, corporates and municipals, are all at risk if these deficits lead to higher inflation down the road, as many fear.

6 Looking for a wager? Try the iShares MSCI Japan Index exchange-traded fund (EWJ). At the start of the new decade, the Tokyo stock market may be the world's least fashionable investment.

-- B.A.