Category Archives: accounting

How Have Credit Unions Survived the Crisis?

John Gapper has post up about "the enduring financial advantages of mutuality", talking about insurers, investment banks, and British building societies. The ones which went public got an immediate windfall upside, but also a longer-term downside: One effect was that … Continue reading

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Why Mark to Market?

How was I not aware, until now, that what looks like a full RSS feed for Justin Fox’s excellent Curious Capitalist blog actually isn’t? He didn’t write 314 words on the pros and cons of marking to market: in fact … Continue reading

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Peter Niculescu, Teflon Executive

How did Peter Niculescu manage to get promoted to the important new position of Chief Business Officer at Fannie Mae? This is how Fannie Mae describes his history at the company after he joined in 1999: In his previous position … Continue reading

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The Rule That Reduced Banks to a Quivering Blob of Matter

Andrew Ross Sorkin’s article about Steve Schwarzman and FAS 157 is the gift that keeps on giving. First Barry Ritholtz took a swipe, then Jack Ciesielski attacked it forensically from a professional accountant’s point of view, and now Gari has … Continue reading

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The Downside of Marking to Market

Holman Jenkins has an excellent column today headlined "Mark to Meltdown?" on the degree to which mark-to-market accounting standards have exacerbated the current crisis. Certainly the present system is pro-cyclical, helping both to inflate credit bubbles and make their bursting … Continue reading

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Did FASB Scupper the Auction-Rate Market?

Auction-rate securities certainly don’t look very much like cash equivalents these days, as the WSJ shows, citing retail investor Naveen Ahuja, who is unable to sell $665,000 of the things. For investors like Mr. Ahuja, the unrest in a formerly … Continue reading

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AIG’s Arbitrary Write-Down

The news seems to be reasonably clear: according to an 8-K it filed today, AIG has suddenly discovered that the value of its credit default swaps is $4.88 billion lower than it had previously indicated. That’s Bloomberg’s number, and the … Continue reading

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