Citigroup (NYSE:C), JPMorgan (NYSE:JPM) Under Scrutiny over CDOs

Goldman Sachs (NYSE:GS) is no longer the sole recipient of the gaze of the SEC, as other giant bankers like Citigroup (NYSE:C), JPMorgan (NYSE:JPM), Morgan Stanley (NYSE:MS), Deutsche Bank AG and UBS AG have reportedly all been subpeonaed by the SEC, although JP Morgan has contended they aren't aware of any investigation targeting them.

The focus on the banks is whether or not they were representing the CDOs to be what they were, or they presented them as something else with less risk in them, while actually being extremely risky.

Goldman has said they've done nothing wrong, Warren Buffett has agreed with them, as he's one of the few that actually understand the way the CDO business works.

The problem seems to be the lack of understanding by these politicians who are looking to save their own political rearends after bailing out the banks against the will of the public. So they continue to pursue something that the general population, and many in the finance world itself, don't have a full understanding of, in order to give the appearance they are battling the big banks.

The more they get into it though, the more the realization is coming that they don't know what they're doing, and it's beginning to look like a witch hunt rather than legitimate misconduct by the banking institutions.

JPMorgan (NYSE:JPM) and Citigroup (NYSE:C) Chasing Commodity Investment Leaders

JPMorgan and Citigroup Looking to Commodities

Now that many of the banks and investment banks like JPMorgan (NYSE:JPM) and Citigroup (NYSE:C) have finished shoring up their foundations and building up their reserve capital, they're looking at generating revenue, and the commodity bull market may be the best place to do that in the years ahead, as they try to catch up with competitors like Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS) who make a lot of money in the sector, and are positioned well to continue doing that.

Although mergers and acquisitions and initial public offerins are expected to increase some this year, that business won't be a huge revenue generator until we truly emerge from the recession.

So commodities are one of the few growth sectors left which have a good chance of increasing revenue and profits for banks and their investment bank units.

JPMorgan and Citigroup Looking to Commodities

UBS Selling Commodities Businesses to Barclays

UBS made an expected statement on Friday that they are selling some of their commodities businesses, something the have mentioned as a goal in the past.

Barclays Capital is acquiring the power and gas businesses in the U.S., oil, and their base metals divisions. All together approximately 100 people are employed in the combined companies or units. Details of the terms of the deal weren't disclosed.

With losses in the billions, UBS is looking for alternative ways to raise capital in these difficult circumstances. They've already written down about $49 billion and received intervention from the government.

Other deals they've made are the sales of the stake they had in the Bank of China, and separately their global agriculture business and Canadian energy operations to J.P. Morgan Chase.

Last year they also got out of some of the power and gas markets they served in Europe, while keeping those in North America, northwest Europe and Britain.

The company is keeping its exchange-traded commodities, precious metals and index commodities, as well as continuing to trade in refined oil products and crude oil.

Assuming specific conditions of the deal are met, it should close sometime at the end of the second quarter.

The move is understandable, but when commodities begin to return in the future, they'll be sorry at the extraordinary profits they forfeited.