Matthew Ganucheau, CFA

Three Reasons Why I'm Going Short and Buying Puts

Thanks for the links to the articles. They were great reads. Just one question about the second one though, why is November 15th important with regard to the SFAS157 regulation? I thought the disclosure of level 3 assets was required by the end of the first quarter of 2008. Thanks.

The Bear's Lair- Level 3 Decimation
"From November 15, we will have a new tool for figuring out how much toxic waste is in investment banks’ balance sheets. The new accounting rule SFAS157 requires banks to divide their tradeable assets into three “levels” according to how easy it is to get a market price for them. Level 1 assets have quoted prices in active markets. At the other extreme Level 3 assets have only unobservable inputs to measure value and are thus valued by reference to the banks’ own models."

Three Reasons Why I'm Going Short and Buying Puts

Thanks for the links to the articles. They were great reads. Just one question about the second one though, why is November 15th important with regard to the SFAS157 regulation? I thought the disclosure of level 3 assets was required by the end of the first quarter of 2008. Thanks.

The Bear's Lair- Level 3 Decimation
"From November 15, we will have a new tool for figuring out how much toxic waste is in investment banks’ balance sheets. The new accounting rule SFAS157 requires banks to divide their tradeable assets into three “levels” according to how easy it is to get a market price for them. Level 1 assets have quoted prices in active markets. At the other extreme Level 3 assets have only unobservable inputs to measure value and are thus valued by reference to the banks’ own models."