Tuesday, September 30, 2008

Just In Time For Q3 Earnings....SEC Gives Banks More Leeway On Mark-To-Market

Surprise, surprise...... Probably the worst they can do to restore confidence..... Desperation......

Passenderweise noch rechtzeitig um die Bilanzen für das 3. Quartal noch künstlich zu frisieren..... Glaube kaum das diese Bilanzakrobatik dazu beiträgt das Vertrauen in Bankenbilanzen zu stärken..... Klingt einmal mehr nach einer weiteren Verzweiflungsaktion.....

SEC gives banks more leeway on mark-to-market Reuters
"This letter (SEC document) could be titled, pick a number, any number, as it gives bankers great leeway in choosing what numbers they will give to investors," said Lynn Turner, who served as chief accountant at the SEC from 1998 through 2001
More Mark-to-Market Quotes via Calculated Risk. Barry Ritholtz has an excellent summary Understanding the Significance of Mark-to-Market Accounting. Floyd Norris from the NYT has also some thoughts on this topic Fair Value Follies & S.E.C. Move May Relax Asset Rule

Mehr zu diesem Thema via Calculated Risk Mark-to-Market Quotes und Barry Ritholtz macht nocheinmal mehr als deutlich warum diese Bilanzierungmethodik so wichtig ist Understanding the Significance of Mark-to-Market Accounting. Darüberhinaus hat sich Floyd Norris von der NYT Fair Value Follies & S.E.C. Move May Relax Asset Rule zum Thema seine Gedanken gemacht

But i fear that this is only the beginning......Take a look at Paulsons Magic Marker hidden in his bailout plan. You don´t have be a genius to assume that this "tool" will be used not very "conservatively"....

Befürchte das dies erst der Anfang ist.... Inmitten des vorerst gescheiterten Bailout Plans verbirgt sich nachfolge Passage.... Man muß kein Hellseher sein das dieses "Werkzeug" inflationär angwendet werden wird...... via Paulsons Magic Marker Ft Alphaville

Section 132. Authority to Suspend Mark-to-Market Accounting.Restates the Securities and Exchange Commission’s authority to suspend the application of Statement Number 157 of the Financial Accounting Standards Board if the SEC determines that it is in the public interest and protects investors.

Once more via Barry Ritholtz Quote of the Day: Fair Value Accounting

Wachovia went out with a book value of $75 billion. Citi paid $2 billion. Could it be that asset values are overstated, not understated?

-Michael Rapoport, Dow Jones


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4 Comments:

Anonymous François said...

May I ask you what your feelings are concerning Deutche Bank liabilities.

I read - possibly on FT but cannot get a handle on it - that DB liabilities were so wide and their leverage so high that it could litteraly drown Germany as well.

I also read that their management requested an action to be taken at European level.

In view of their well-known exposure to anglo-saxon risks, what is your opinion?

A reader of your great stuff!

10:03 AM  
Anonymous François said...

May I ask you what your feelings are concerning Deutche Bank liabilities.

I read - possibly on FT but cannot get a handle on it - that DB liabilities were so wide and their leverage so high that it could litteraly drown Germany as well.

I also read that their management requested an action to be taken at European level.

In view of their well-known exposure to anglo-saxon risks, what is your opinion?

A reader of your great stuff!

10:03 AM  
Blogger jmf said...

Moin Francois,

i have heard several confernec calls from Deutsche...

The leverage issue was alsways the hot topic.....

The are argiung that the net exposure is only a fraction

Here is the presentation fro their latest call... Go to page 30

Presentation Q2

Problem is when your counterparty goes bust ( AIG was very close....)

Here is something you can read with SCHADENFREUDE


Deutsche Bank Is Doubling Down In Vegas.....


I wouldn´t touch any bank for the next 12-24 month....

10:14 AM  
Anonymous Anonymous said...

Do you mean this:

"The key problem on this side of the Atlantic is that the largest European banks have become not only too big to fail but also too big to be saved. For example, the total liabilities of Deutsche Bank (leverage ratio over 50!) amount to around 2,000 billion euro, (more than Fannie Mai) or over 80 % of the GDP of Germany. This is simply too much for the Bundesbank or even the German state to contemplate, given that the German budget is bound by the rules of the Stability pact and the German government cannot order (unlike the US Treasury) its central bank to issue more currency. The total liabilities of Barclays of around 1,300 billion pounds (leverage ratio over 60!) surpasses Britain’s GDP. Fortis bank, which has been in the news recently, has a leverage ratio of "only" 33, but its liabilities are several times larger than the GDP of its home country (Belgium)."

Quote from:

http://www.voxeu.org/index.php?q=node/1669

There is also a leverage chart.

2:44 PM  

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