Is Wall Street Crazy?

Here we go again.

This morning, Citigroup reported a $2.5 BILLION loss, but since it beat Wall Street's lowered expectations, the stock and the market futures are moving up.

Citigroup posted yet another loss and laid off more employees in the second quarter as it struggled with surging loan defaults and as more consumers fail to make loan payments, but Wall Street started handing out the happy juice since the shortfall was smaller than the silly (lowered of course) levels it had anticipated.

The nation's biggest banking company by assets reported Friday it lost $2.5 billion. In the same time frame last year, the bank earned $6.23 billion.

I can't quite figure out how this is good news, after all. the difference from last year to this year is an amazing negative $8.7 billion. Look at it this way, would you be celebrating if this year you went from having an income to having zero income and borrowing another third of your previous annual earnings? Duh!

Citigroup Inc.'s securities and banking division wrote down the value of its assets by $7.2 billion, before taxes, and an asset revaluation cost its consumer lending business $745 million. Credit costs jumped to $7.2 billion as more consumers defaulted on their loans -- implying that while losses in the credit markets are decelerating, losses from actual defaults in Citigroup's mortgages, home-equity loans, auto loans and credit card lines are mounting. Isn't this going the wrong way?

Citigroup has failed to turn a profit for three straight quarters now.

Using it's inscrutable logic, Wall Street appears to be deciding that the prospect for the ailing financial sector may not be as dire as they feared, therefore it's time for us fools to buy more shares of companies that are losing money, so they are raising the stock prices to entice us to buy their shares before the prices go up even more. Ha!

By the way, Citigroup's revenue fell 29 percent to $18.7 billion and the bank reduced its work force by 6,000 during the quarter, bringing its job cut total to 11,000 for 2008.

So, let's all run out and celebrate this magnificent management example of capitalism and do what the Bloomberg and CNBC cheerleaders are telling us to do, that is buy more Citigroup shares.

A better idea than buying a share of this pig is to find a terminated Citi employee and take them out for a modest lunch. Do a good deed this weekend and be thankful that you don't own a whole pile of this pooper masquerading as a business.

The Best Money Guy