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Fair is Fair

Just under a week ago, I went after White House Press Secretary Robert Gibbs for going on the attack against those in the entertainment news industry – keyword:entertainment – because I felt it was beneath the Office of the President, and just not a smart PR strategy.

Well, it looks like some of those same entertainment news guys who were on the attack are now making THE EXACT SAME MISTAKE as Press Secretary Gibbs. They’re trying to defend themselves against a comedian. If you haven’t seen this clip from the Daily Show, you have to watch it:

Okay, I’ve got a couple of thoughts on why this is so funny, but before I go into it, you have to watch the commentators reaction to Jon Stewart’s bit:


Doesn’t anyone get public relations advice anymore. These guys just made total fools of themselves. I can’t believe they’re whining about the content of a political comedy show.

Ok, so why does Jon Stewart’s bit make me crack up. Hmm, could it be because I was listening to several different news shows yesterday and heard this over and over and over again…

Wall Street snapped out of its stupor and posted its best performance of the year Tuesday, finding a badly needed glimmer of optimism in the most unlikely of places: Citigroup is actually managing to turn a profit. The 379-point gain for the Dow Jones industrials, a rally of almost 6 percent, was a welcome break from almost uninterrupted selling. But just as almost nobody expects the banks to snap back to health, almost nobody thinks the market has hit its bottom.

“One day isn’t going to make a trend,” said Kurt Karl, chief U.S. economist at Swiss Re.

Citigroup Chief Executive Vikram Pandit said in a letter to employees that the bank had operated at a profit for the first two months of this year and was on track, based on historical trends, to make $8.3 billion for the quarter.

Pandit said the bank has had its best performance since the third quarter of 2007, the last time it booked a quarterly profit.

Wow, it’s a miracle. Citigroup says they made $8.3 billion for the quarter. What a turnaround. Amazing. Astounding. I am in absolute awe of the business acumen here…

Wait a second. Isn’t there something I’m forgetting. Oh, that’s right. I seem to remember something about a little infusion of cash:

The government will own up to 36 percent of Citigroup’s common shares under the terms of the deal announced yesterday, which is designed to reassure investors that the troubled New York bank can survive the deepening recession.

The deal does not involve new funding from taxpayers. The Treasury Department already has invested $45 billion in Citigroup. The company may repay up to $25 billion with common shares rather than cash. The government will surrender billions of dollars in dividend payments on its original investment, but taxpayers will benefit directly if the company’s share price recovers in the wake of the federal aid.

Huh. Who would of thunk it? Citigroup received $45 billion and the government surrenders “billions of dollars in dividend payments” and lo and behold Citigroup has billions of dollars in “profit.” Wow, what a surprise! That’s it everybody ought to jump back into the market.

Did I mention the strings that were attached to $45 billion of taxpayer money?

A key condition is that Citigroup must also convince investors to accept its common shares. The company must place $27.5 billion in shares with private investors in order to place the maximum of $25 billion with the government. If the company succeeds in full, its current shareholders will be left with roughly a 26 percent stake.

Mission accomplished! And, Wall Street emerges from its stupor. Please, if you bought into this yesterday, I’ve got some shares of Bear Stearns, Lehman Brothers, MCI Worldcom and Enron I’d like to offer you at an amazing price.

For those of you, who think I’m just trying to rain on the parade. Let’s take a trip down memory lane. Don’t worry, we don’t have to go too far. Just need to look at reports from three years ago:

Citigroup Inc., the nation’s largest financial institution, on Monday reported its first-quarter profit rose 4 percent, beating Wall Street projections due to record investment banking returns.

Ah, but that’s not the best part. For that, we have to read further into the story:

Citigroup joined other Wall Street institutions in reporting its strongest quarter of merger and acquisition activity since 2000, helping to offset the impact of rising interest rates on other businesses.

“We are seeing the benefits from our investment spending, which helped generate record revenues in our international businesses and record revenues globally in our corporate and investment banking business,” said Chief Executive Charles Prince in a statement. “Strength in these franchises more than offset weaker results in our U.S. consumer business.”

Corporate and investment banking profit increased 21 percent to $7.28 billion from $6.04 billion a year earlier. Citigroup has been one of Wall Street’s leaders in global debt and equity underwriting during the quarter, and has consistently led in announced global merger and acquisition deals.

Citigroup’s results come one month after Goldman Sachs Group Inc. and Lehman Brothers Holdings Inc. announced blockbuster earnings for the quarter that ended in February, buoyed by record revenue from equity sales and trading.

Imagine that. Those great results came one month after similar blockbuster earnings were announced by Lehman Brothers. Well, I guess we can expect to see history repeat itself, and in the next few weeks Lehman Brothers will be announcing blockbuster earnings.

Oh wait, that’s right. Lehman Brothers went bankrupt. Don’t worry though. We’ll still get a chance to see history repeat itself.