The report include a $18.1 billion in pre-tax write-downs related to the subprime crisis and a $4.1 billion increase in credit costs because of current and estimated losses, the bank said in a release Tuesday. Investors reacted negatively to the news, driving stock indexes down when trading began.

"Our poor performance was driven primarily by two factors -- significant write-downs and losses on our subprime direct exposures in fixed income markets, and a large increase in credit costs in our U.S. consumer loan portfolio," said Vakram Pandit, Citigroup chief executive.

The company tried several times to restructure after recent market churning forced it to re-evaluate assets and liquidity in 2007. It cut jobs in April, when it announced it would lay off of 17,000 workers, MarketWatch reported. Citi said it took charges in the quarter related to 4,200 job cuts, which it did not detail.

Citi said cut its dividend to retain capital and was getting a $12 billion infusion from private placement and a public offering of preferred shares, MarketWatch reported.

(UPI) – The U.S. government's deficit has reached an estimated $268 billion over the first nine months of fiscal 2008, the Congressional Budget Office says.

 
The CBO, in its monthly budget review for July, said the figure represented $148 billion more than a similar period last year, though about half of that -- $79 billion -- came from the economic stimulus program, with much more spending expected.

Federal government revenues were about 1 percent less -- $16 billion -- in June 2008 than June 2007 and outlays were about 6 percent more than a year ago, the CBO report said.

The report put government outlays at about $2.2 trillion, compared with receipts of about $1.9 trillion for the fiscal year that began Oct. 1, 2007. That left a deficit of $268 billion.

The White House Office of Management and Budget predicted a $410 billion deficit at the end of fiscal 2008, but expects now a larger figure in revised numbers later this month.

The national debt, which refers to the cumulative amount the government has borrowed and not repaid, is almost $9.5 trillion, the highest in U.S. history, the U.S. Treasury Department says.

The Consumer Price Index advanced 1.1 percent during the month, the biggest monthly rise since June 1982,  the Labor Department said. That was well above the 0.7 percent increase economists polled ahead of the report were expecting.

Prices were up 5 percent from a year ago, the biggest year-on-year rise since 1991.

Excluding food and energy prices, the so-called core CPI rose by a more tame 0.3 percent, but that rise was still higher than the 0.2 percent gain expected. Energy prices advanced 6.6 percent during the month, reflecting a 10.1 percent surge in gasoline prices as consumers are paying well in excess of $4.00 a gallon.

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