By Lindsay Chin
In fall of 2008, the financial crisis emerged as the biggest crisis since the Great Depression. Hundreds of billions in mortgage-related investments went bad. After a year of heavy losses and three bailouts from Washington, Citigroup said Friday that it had made money. It had made a net profit of $1.6 billion for the first quarter. Small wisps of recovery are appearing in the nation’s banking industry. Banks are doing all they can to make themselves look good. The industry’s goal is to create the impression that banks are stabilizing so private investors will invest in them, minimizing the need for additional taxpayer money. Citigroup had its first profitable quarter in eighteen months dur to its unusually strong trading results. It also made progress in reducing expenses and improving its capital position. However, it has used several common accounting tactics to increase its reported earnings. One of the tactics is a move known as credit value adjustments. The strategy added $2.7 billion to the company’s bottom line. Also, the industrial conglomerate General Electric held up reasonably well in a difficult first quarter. The Business showed slight gains in profit. As in the capital markets, they say they are improving; industrial orders are down but are not collapsing. There is hope that the United States will recover from this recession soon.
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