Quote of the Day: Fair Value Accounting

Wednesday, October 01, 2008 | 03:30 PM

"In reality, however, fair value and mark-to-market have little to do with what is happening. It is companies' refusal to properly and clearly value their assets that's getting them in trouble...

"The Citigroup-Wachovia deal is the latest example of that. Citigroup agreed Tuesday to buy Wachovia's banking operations, the bulk of the company, for $2.16 billion plus the assumption of debt. That's a shockingly cheap price for a company with a book value - assets minus liabilities - of $75.1 billion...

"Which means either that Citi got an unprecedented bargain, or that Citi and the market didn't believe that the values Wachovia placed on its assets were realistic."

>-Michael Rapoport, Dow Jones

>

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

Gee, I dunno. Better obscure them as soon as possible . . .



>

Source:
Lying Bank Accounting 
Floyd Norris
September 30, 2008, 1:37 pm
http://norris.blogs.nytimes.com/2008/09/30/lying-bank-accounting/

Wednesday, October 01, 2008 | 03:30 PM | Permalink | Comments (41) | TrackBack (0)
de.li.cious add to de.li.cious | digg digg this! | technorati add to technorati | email email this post

bn-image

TrackBack

TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a00d8341c52a953ef01053511ae32970b

Listed below are links to weblogs that reference Quote of the Day: Fair Value Accounting:

Comments

Interesting article I note that like S and L's lax rules weren't the the investment banks were the real problem here. Repealing Glass Steagal? anyone. (sorry about spelling if i missed)

Posted by: GB | Oct 1, 2008 3:37:18 PM

The comments to this entry are closed.



Recent Posts

December 2008
Sun Mon Tue Wed Thu Fri Sat
  1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 31      

Archives

Complete Archives List

Blogroll

Blogroll

Category Cloud

On the Nightstand

On the Nightstand

 Subscribe in a reader

Get The Big Picture!
Enter your email address:


Read our privacy policy

Essays & Effluvia

The Apprenticed Investor

Apprenticed Investor

About Me

About Me
email me

Favorite Posts

Tools and Feeds

AddThis Social Bookmark Button

Add to Google Reader or Homepage

Subscribe to The Big Picture

Powered by FeedBurner

Add to Technorati Favorites

FeedBurner


My Wishlist

Worth Perusing

Worth Perusing

mp3s Spinning

MP3s Spinning

My Photo

Disclaimer

Disclaimer

Odds & Ends

Site by Moxie Design Studios™

FeedBurner