Posted on 08/05/2024 2:01:45 PM PDT by Pol-92064
After the last major financial crisis, when scores of banks failed or took government bailouts while sporting seemingly pristine balance sheets, America’s accounting rule makers got working on a new system for reporting credit losses that was supposed to make lenders recognize them more quickly.
That new set of rules has been in place for a little over four years. Investors could be forgiven for wondering if it is working any better than the former one.
The old system was called the incurred-loss model. To book a loss, a lender had to conclude it was “probable” that one had already happened. The term “probable” wasn’t defined numerically, but the bar was widely interpreted to be very high—perhaps a 70% or greater likelihood. Bankers used to explain, conveniently, that they would have booked more loan losses, if only the rules would have let them.
(Excerpt) Read more at wsj.com ...
Bank stocks are ultra risky.
Their accounting games—legal or not—make their books and records totally useless.
If there is a crash, this time I have cash. Hoping to get some bargains...l
“To book a loss, a lender had to conclude it was “probable” that one had already happened.”
Funny, they don’t say it is “probable” if I miss a mortgage payment. They’re pretty good at those books and never fail to include the late fees.
Accounting is no longer balance sheets: assets vs liabilities, income vs expenses. It’s all smoke and mirrors to hide bad loans to make more bad loans. After all, why not? The fed will bail you out with taxpayer money once the public notices.
Ain’t that the truth. Out of the blue I got a $6000 tax bill from the IRS. When called they couldn’t explain it, couldn’t give me records, couldn’t say why or how. Just I had to pay it. Accountant said to pay it now and fight later since It will accrue and it could be considered a felony evasion with enough time.
My name is not Hunter Biden so I can’t get away with not paying. Ironically (pure coincidence I am sure) it happened right after Chomo Joe’s new IRS expansion to go after “millionaires and billionaires.” I am neither
Then on a random Thursday afternoon, I get a phone call that told me that if I could be at the closing table Monday Morning with a cashiers check, the properties were mine.
The portfolio managers at the banks have a very weird, super-measured way to get those properties off their books. It made no sense to me at all. They didn't even haggle. What I offered was what they would take on Monday morning. That was about thirty cents on the debt dollar. So a $135K mortgage balance got written off for $55K. Go figure?
“ When called they couldn’t explain it, couldn’t give me records, couldn’t say why or how. ”
You are on FR, that’s probably all that was needed !
It’s the tanking of commercial real estate due to crazy libtard Dens shutting down in 2020.
I hope NYC suffers.
And registered as a Republican from independent for 2020
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