Citigroup (C: 28.22, -2.52, -8.21%), the country’s third-largest bank by assets, surprised the markets Tuesday by missing its fourth-quarter earnings estimates, as revenue from its trading desks and investment banking slumped.
Look under the hood of Citi’s earnings and you’ll see the bank dramatically goosed its profits higher by booking outsized paper gains from an accounting trick that’s legitimate under current rules, and by releasing loan loss reserves into earnings.
