Roland Cycan's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/159281/comments http://seekingalpha.com/article/130419-fasb-watch-who-should-make-the-economic-calls?source=feed#comment-459020 459020
One is in accordance with FASB's rules. The other is an accordance with Barney Frank's rules.

Let people rely on whichever they choose.]]> Fri, 10 Apr 2009 12:30:40 -0400
One is in accordance with FASB's rules. The other is an accordance with Barney Frank's rules.

Let people rely on whichever they choose.]]> http://seekingalpha.com/article/126325-international-valuation-standards-the-only-viable-alternative-to-mark-to-market?source=feed#comment-437988 437988
They simply cannot have a process that is expensive, tedious, and time consuming each quarter end. I disagree with you when you say that the expense, tediousness, (and time consumption?) involved is not a reason for not doing the valuation properly (properly meaning by IVS standards). I say that it is a reason, and a good one.

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They simply cannot have a process that is expensive, tedious, and time consuming each quarter end. I disagree with you when you say that the expense, tediousness, (and time consumption?) involved is not a reason for not doing the valuation properly (properly meaning by IVS standards). I say that it is a reason, and a good one.

]]> http://seekingalpha.com/article/127001-u-s-debt-surpasses-11-trillion-but-day-of-reckoning-is-still-ahead?source=feed#comment-433836 433836
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]]> http://seekingalpha.com/article/126325-international-valuation-standards-the-only-viable-alternative-to-mark-to-market?source=feed#comment-429216 429216
If you could pick a representative sample of real and difficult to value assets (a CDO, a CMO, a CDS, a severely undervalued stock trading on an exchange [Citi?], perhaps some major multimillion dollar equipment piece) and walk through the evaluations, it would lend credence to your arguements.]]> Tue, 17 Mar 2009 11:22:31 -0400
If you could pick a representative sample of real and difficult to value assets (a CDO, a CMO, a CDS, a severely undervalued stock trading on an exchange [Citi?], perhaps some major multimillion dollar equipment piece) and walk through the evaluations, it would lend credence to your arguements.]]> http://seekingalpha.com/article/124335-bofa-wells-fargo-no-equity-after-accounting-for-bad-loans?source=feed#comment-416218 416218
After all, you really don't want to report to your investors that assets are worth $100 when collectability of that $100 is in reasonable doubt.

However, most senior managers do not want conservateive statements prepared. They prefer aggressive accounting, and for most of the last couple of decades got away with it. They were also in position to override their staff accountants' judgements, and to influence the duditing firms ( may need a different auditor next year after all, and similar veiled threats ).

Boards of Directors should insist that the Chief Accounting Officer (sometimes the CFO, sometime not) report directly to the Board, not to the the CEO. And they should do what they can to remove influence of the CEO in choosing auditors.

The accounting staff cannot be watchguard for the Board if they report to the CEO.




On Mar 05 11:34 PM dare16 wrote:

> Fair value accounting should be abolish, it is an evil which make
> co achieve better performance when the economy is good but make financial
> statement worse than it should have when economy is bad.]]> Fri, 06 Mar 2009 13:16:22 -0500
After all, you really don't want to report to your investors that assets are worth $100 when collectability of that $100 is in reasonable doubt.

However, most senior managers do not want conservateive statements prepared. They prefer aggressive accounting, and for most of the last couple of decades got away with it. They were also in position to override their staff accountants' judgements, and to influence the duditing firms ( may need a different auditor next year after all, and similar veiled threats ).

Boards of Directors should insist that the Chief Accounting Officer (sometimes the CFO, sometime not) report directly to the Board, not to the the CEO. And they should do what they can to remove influence of the CEO in choosing auditors.

The accounting staff cannot be watchguard for the Board if they report to the CEO.




On Mar 05 11:34 PM dare16 wrote:

> Fair value accounting should be abolish, it is an evil which make
> co achieve better performance when the economy is good but make financial
> statement worse than it should have when economy is bad.]]> http://seekingalpha.com/article/119038-unintended-consequences-of-four-government-policies?source=feed#comment-379355 379355 ..."

If the market believed the devaluation was short term, people would be rushing to buy them. Can you show me, please, that the devaluation is short term. I believe that it is long term.


And, I agree with the sentiment expressed by Brahm about protecting investors. How would you feel if you bought a stock based on its financial statements, only to be told shortly thereafter, those assets on our books, well the fair value of them is only 50% of what we are carrying them at on the statements? You'd have been lied to and screwed and you'd be right to be mad as hell.
]]> Sat, 07 Feb 2009 13:13:45 -0500 ..."

If the market believed the devaluation was short term, people would be rushing to buy them. Can you show me, please, that the devaluation is short term. I believe that it is long term.


And, I agree with the sentiment expressed by Brahm about protecting investors. How would you feel if you bought a stock based on its financial statements, only to be told shortly thereafter, those assets on our books, well the fair value of them is only 50% of what we are carrying them at on the statements? You'd have been lied to and screwed and you'd be right to be mad as hell.
]]> http://seekingalpha.com/article/117915-why-doesn-t-the-market-listen?source=feed#comment-374343 374343 Tue, 03 Feb 2009 10:06:00 -0500 http://seekingalpha.com/article/79525-gladstone-capital-corp-f2q08-qtr-end-03-31-08-earnings-call-transcript?source=feed#comment-177658 177658 Sun, 01 Jun 2008 18:44:06 -0400 http://seekingalpha.com/article/60527-united-technologies-molten-salt-solar-power-generation?source=feed#comment-173002 173002 Fri, 23 May 2008 20:47:28 -0400 http://seekingalpha.com/article/77596-american-capital-strategies-dividend-analysis?source=feed#comment-169662 169662 Sun, 18 May 2008 11:51:08 -0400 http://seekingalpha.com/article/69308-thornburg-mortgage-must-sell-its-soul-to-stay-afloat?source=feed#comment-129285 129285
Recent events have really highlighted the flaw in the common REIT model of borrowing short and lending long. REIT's may have to adapt to a less leveraged business practice. It might even be wise for congress to do away with the favorable tax treatment of the current model to incentivize better business practices.]]> Thu, 20 Mar 2008 10:50:04 -0400
Recent events have really highlighted the flaw in the common REIT model of borrowing short and lending long. REIT's may have to adapt to a less leveraged business practice. It might even be wise for congress to do away with the favorable tax treatment of the current model to incentivize better business practices.]]> http://seekingalpha.com/article/67104-thornburg-s-a-huge-bargain-after-monday-s-crash?source=feed#comment-122404 122404
As an aside, current market conditions have pointed out a deep flaw in the REIT structure, the need to pay so much of their income as dividends. They can't really accumulate any retained earnings (reserves) for when times turn bad.

When times are good, the model works. When times are bad, they are forced to sell new stock, but when times are bad, the stock price is low.]]> Wed, 05 Mar 2008 10:08:48 -0500
As an aside, current market conditions have pointed out a deep flaw in the REIT structure, the need to pay so much of their income as dividends. They can't really accumulate any retained earnings (reserves) for when times turn bad.

When times are good, the model works. When times are bad, they are forced to sell new stock, but when times are bad, the stock price is low.]]>