I see that Citigroup, amid boom times for other mega banks, got slammed again in its third-quarter earnings, primarily because of big losses in consumer lending.

As the Times reports:

After pulling off two consecutive quarterly profits, Citigroup posted a loss in the third quarter as spiraling consumer losses overwhelmed its strong trading results.

Here’s a bit more detail:

In addition, Citigroup broke its results into two segments for the second consecutive quarter. Citicorp, its core consumer and corporate banking operation, had $2.2 billion profit in the third quarter. Citi Holdings, which contains the money-losing businesses and toxic assets the bank plans to sell, showed a $1.9 billion quarterly loss. It was weighed down by the heavy losses tied to private-label credit cards, mortgages, and consumer loans.

There are a lot of candidates for worst actor during the mortgage flimflam—Merrill Lynch, Lehman, Bear Stearns, Countrywide; gosh, so hard to choose—but Citigroup would have to be way up there.

It’s worth recalling at this point that Mike Hudson won the Polk Award for his 10,000-word expose, “Banking on Misery: Citigroup, Wall Street, and the Fleecing of the South,” in the summer 2003 issue of tiny Southern Exposure magazine.

This is the story that the conventional business press never got around to telling, as I discussed in this 2007 post, and still hasn’t to this very day.

That’s too bad, because Citigroup’s long-term shareholders, aka, “lambs led to the slaughter,” (get a 10-year chart here) would have known that Citigroup was built on unsustainable (not to mention immoral) predatory lending from the ground up. Sandy Weill and sidekick Jaime Dimon started with Commercial Credit Corp. in 1986, then bought Primerica in 1988, before merging with Citicorp a decade later, and then bought the notorious Associates First Capital in 2000. All three firms had a history of regulatory trouble and all became merged into Citigroup’s low-end arm, CitiFinancial, which was, and remains, a giant.

As Hudson wrote in that prize-winning piece:

Citigroup has established itself as perhaps the most powerful player in the subprime market by swallowing competitors and employing its vast capital resources and its name-brand respectability. CitiFinancial, its flagship subprime unit, claims 4.3 million customers and 1,600 plus branches in forty-eight states, including nearly 350 offices across the South.

Things don’t stop with CitiFinancial, however. The web of subprime is woven throughout Citigroup. Sandy Weill’s company has refashioned itself into a full-service subprime enterprise—one that makes high-cost loans and sells securities backed by the income streams from all these transactions.

And here is a startling statistic with my emphasis:

In 2000, one study calculated, nearly three of every four mortgages originated within Citigroup’s lending empire were made by one of its higher-interest subprime affiliates—nearly 180,000 loans out of a total of 240,000-plus mortgages for the year.

That’s Citi’s DNA, not that you’d know it from the mainstream media. Citi was well-positioned for phantom profits during the mortgage boom because, helped by the 1999 Glass-Steagall repeal, which was practically forced by the Citi-Travelers merger a year earlier, Citi had the advantage of being able to generate its own ample supply of defective mortgages that it could then turn into defective mortgage-backed securities and buy again (!) for its defective special investment vehicles.

Talk about one-stop shopping. Of course, this is all ancient history. No doubt Citi was a model lender after 2003. We know this because no one in the mainstream business media told us otherwise. All we heard was what a visionary Chuck Prince was, until he wasn’t. For a full discussion of business press pre-crisis failures, read our study, “Power Problem.”

Want to know where Citi went wrong? You won’t find it in the business pages.

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Dean Starkman Dean Starkman runs The Audit, CJR's business section, and is the author of The Watchdog That Didn't Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014). Follow Dean on Twitter: @deanstarkman.