Funny Money 0
I’ve tried to read this article three times now and each time I get lost in the mumbo-jumbo. Maybe Duncan understands it–after all, he used to teach this stuff–but I don’t.
One thing I have learned in years of working in large organizations is that, if something doesn’t make sense and can’t be expressed in plain language, the odds are that it just doesn’t make sense and someone is pulling a fast one.
The magician doesn’t really make the rabbit magically turn into a hankerchief and losers don’t magically become winners. It’s all just sleight of hand.
Wells Fargo & Co., Bank of America Corp. and PNC Financial Services Group Inc. are also poised to benefit from taking over home lenders Wachovia Corp., Countrywide Financial Corp. and National City Corp., regulatory filings show. The deals provide a combined $56 billion in so-called accretable yield, the difference between the value of the loans on the banks’ balance sheets and the cash flow they’re expected to produce.
Faced with the highest U.S. unemployment in 25 years and a surging foreclosure rate, the lenders are seizing on a four- year-old rule aimed at standardizing how they book acquired loans that have deteriorated in credit quality. By applying the measure to mortgages and commercial loans that lost value during the worst financial crisis since the Great Depression, the banks will wring revenue from the wreckage, said Robert Willens, a former Lehman Brothers Holdings Inc. executive who runs a tax and accounting consulting firm in New York.
Not that the Wall Street Wankers would ever try to pull a fast one. Oh! Certainly not!
We need new accounting rules.
