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They are REQUIRED by accounting regulations (GAAP) to value assets that way !!!!
FASB 157 on link below:
http://www.fasb.org/cs/BlobServer?blobcol=urldata&blobtable
=MungoBlobs&blobkey=id&blobwhere=1175820927537&
blobheader=application%2Fpdf
Do not know how much background in accounting others have, but FASB is the Financial Accounting Standards Board, and GAAP stands for Generally Accepted Accounting Principles.
Personally I do not like mark to market accounting, I preferred when lower of cost or market accounting was used to value assets.
Prior to mark to market accounting, [...]
Do I correctly feel a ponzi at work in the heart of the world’s largest banking system?
No! It’s all good, Bernanke is obviously not alone, he has found his true roll model at last.
Leland Miller: The Crisis Ahead for China’s Policy Banks
With these robust numbers, China’s policy banks are either the best-run banks in the world, unusually lucky, or else their financials utterly fail to reflect the banks’ underlying exposure. [...]
By Reuters
NEW YORK (Reuters) – Top Bank of America Corp lawyers knew as early as January that American International Group Inc was prepared to sue the bank for more than $10 billion, seven months before the lawsuit was filed, according to sources familiar with the matter.
Bank of America shares fell more than 20 percent on August 8, the day the lawsuit was filed, adding to worries about the [...]
Should cats be treated like dogs, when it comes to licensing and immunization requirements?
The San Diego city auditor’s office recommends doing just that — for the sake of health, safety and “cost recovery” for taxpayers.
According to formulas used by the Humane Society of the United States, there are an estimated 373,000 cats in San Diego.
If just 5 percent had been registered at $25 a head, the auditor’s office says the [...]
by Alexander Gloy of Lighthouse Investment Management
Look At Me – I’m A Junk Rated Bank
Everybody hates rating agencies. They missed Enron (balance sheet fraud), the sub-prime crisis (using models provided by banks) and sovereign debt crisis (concealed by foreign currency swaps). They have been wrong – so what? Stock market analysts are wrong all the time, and investors still read their worthless reports. And what would [...]
From Simon Black of Sovereign Man
Is The Debt Problem As Bad As They Say
On the rare occasion that I’m bored, I like to watch 24-hour news television for entertainment. It’s hilarious watching the talking heads spin out of control in apoplectic fits when they’re essentially arguing the same point; they might be from different parties, but they’re merely battling over small details of the same government-sponsored [...]
Anyone aware of the US Government’s real financial situation knows that time is running out. The Government has $15.5 trillion in admitted debts but those debts, when calculated under Generally Accepted Accounting Principles (GAAP), or ‘honest accounting’, is over $70 trillion. $70 trillion divided by 300 million+ Americans works out to $233,000 per person in US Federal Government debt and obligations. Or nearly $1 million [...]
From WSJ:
INSERTING and REPLACING GE Delivers $0.33 Operating EPS Representing 1Q ’11 Growth of 65%; Revenues Total $38.4B for 1Q ’11, up 6%; Quarterly Dividend Increased by $0.01 to $0.15
1Q 2011 Highlights (Continuing Operations Attributable to GE)
In last table GENERAL ELECTRIC COMPANY Financial Measures That Supplement GAAP the following text should be inserted before heading marked Operating Earnings and Operating Earnings per Share:
We sometimes use information derived from consolidated financial [...]
by Phoenix Capital Research
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The Federal Reserve’s actions in combating the Financial Crisis have had dozens if not hundreds of consequences. However, one of the most profound has largely gone unnoticed by all commentators.
That consequence of the Fed sending the clear message: incompetence pays.
Consider that since the Financial Crisis first hit in mid-2007, the Federal Reserve has pumped TRILLIONS of Dollars into Wall Street. The banks have done what they do [...]
by Pension Pulse
via WSJ:
Efforts to make pension accounting more transparent could cause corporate profits to become more volatile if gains and losses from pension assets are mingled with results from companies’ business operations.
The agency for international accounting standards is expected to take up a proposal next year that would require companies with defined-benefit pensions to report annual changes in [...]
As long as FASB continues to be a pawn for TBTF and sound accounting principles are ‘delayed’, nothing will change … and the ‘stock market’ will continue to rise based purely on interest-rate arb … TBTF borrowing at Fed Funds (0% – .25%), borrowing Yen at 0.1%, borrowing Swiss Francs at 0.25%, …. and using those proceeds to daytrade S&P futures or whatever else.
And that’s how we got into this [...]
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