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Banking, finance, and taxes

The Write-Down Guessing Game

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By Douglas A. McIntyre Published
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CNBC reported that Citigroup (C) could have a $24 billion write-off. The source for that report is not clear.

Last week, Goldman Sachs said Citi might have to take a charge of $15 billion. That estimate came from three bank analysts. The last number that the bank gave out was $8 billion to $11 billion.

There have been similar dislocations in write-down estimates for Merrill Lynch (MER), Bear Stearns (BSC), Morgan Stanly (MS), and JP Morgan (JPM).

Keeping the press and analysts from guessing the size of write-offs is not possible. It brings analysts a day in the sun and it helps the press get eye-balls. But, it does not do investors any good as they are thrown from one set of numbers to another.

It is still no unusual for Citi’s shares to move 5% up or down in a day. It is too bad that analysts won’t wait for information from the company. The market could be efficient, but not when it is bounced around by rumors and speculation.

Douglas A. McIntyre

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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