Posted on 04/21/2009 7:23:55 PM PDT by St. Louis Conservative
This is starting to feel like amateur hour for aspiring magicians.
Another day, another attempt by a Wall Street bank to pull a bunny out of the hat, showing off an earnings report that it hopes will elicit oohs and aahs from the market. Goldman Sachs, JPMorgan Chase, Citigroup and, on Monday, Bank of America all tried to wow their audiences with what appeared to be presto! better-than-expected numbers.
But in each case, investors spotted the attempts at sleight of hand, and didnt buy it for a second.
With Goldman Sachs, the disappearing month of December didnt quite disappear (it changed its reporting calendar, effectively erasing the impact of a $1.5 billion loss that month); JPMorgan Chase reported a dazzling profit partly because the price of its bonds dropped (theoretically, they could retire them and buy them back at a cheaper price; thats sort of like saying youre richer because the value of your home has dropped); Citigroup pulled the same trick.
Bank of America sold its shares in China Construction Bank to book a big one-time profit, but Ken Lewis heralded the results as a testament to the value and breadth of the franchise.
Sydney Finkelstein, the Steven Roth professor of management at the Tuck School of Business at Dartmouth College, also pointed out that Bank of America booked a $2.2 billion gain by increasing the value of Merrill Lynchs assets it acquired last quarter to prices that were higher than Merrill kept them.
(Excerpt) Read more at nytimes.com ...
Hey Hey!
For my next trick,
Watch me pull a rabbit out of my assets...,
So, who do you believe, the NY Times or the Bank of America? It reads like just another hit piece article. While I am no fan of Ken Lewis at BofA, I wouldn’t even use the NY Times on the bottom of a bird cage. BofA wins hands down over NYT when it comes to credibility.
I hear your point on the NY Times, but Andrew Ross Sorkin is one bright spot at that paper. Sorkin is one of the best business reporters on the street. I think he’s right on the money here.
In fact these banks are now encouraged by the Obama administration to show fake profits so the markets will show a fake rally and hence Obama and his media can tell the public that his economic policies work. i.e. the evil socialism is working, the public will believe it and Obama will be encouraged to do more evil socialism that is greatly destroying the fundamentals of our economy and will continue to do so until we have a total economic collapse.
who really cares about the banks at this point? So they can make a little money playing their shell games and a few investors make a buck or two off it. I’m sure the 4 million people that have lost their jobs so far during this “recession” will be so happy to hear about this.
No more mark-to-market. Our accounting rules are real magician: they create losses and profits out of the thin air. September 2008 “losses” and “crises” were 100% from the air.
They want the fake profits so the markets will show a fake rally and hence Obama and his media can tell the public that his economic policies work. i.e. the evil socialism is working, the public will believe it and Obama will be encouraged to do more evil socialism that is greatly destroying the fundamentals of our economy and will continue to do so until we have a total economic collapse.
This article has a hidden agenda: legitimize the Obama’s back-door nationalization of the banks.
Now try to refinance your house based on the bank book value i.e. the high value. The bank will just laugh at you and tell you that your house will be financed based on it real market value i.e. the much lower value and hence will not refinance or give you a bad refinance deal.
I don’t think so. I didn’t gather that at all. The author, Andrew Ross Sorkin, certainly doesn’t share that view from what I’ve gathered from reading him over the years.
JPMorgan Chase reported a dazzling profit partly because the price of its bonds dropped (theoretically, they could retire them and buy them back at a cheaper price; thats sort of like saying youre richer because the value of your home has dropped);Any time I could retire a $100,000 bond debt by paying $50,000, I'd think I was getting ahead, or at least getting out of the hole.
Chase is richer because their debt has decreased. I'd consider my self richer if I could pay a $100K mortage with $50K too. I'd be poorer by $50K in missing cash, but richer by $100K in lower debt.
The general public: “again”?
Gosh we all hate the wheel, but it works.
I dreamt I actually got some where.
We did. A place that is not called the dole.
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