ETFnerd

A dramatic visual of how an earnings-less rally can produce a historic P/E ratio.

It's hard to imagine a global recovery with the made up earnings that the S&P 500 just reported.


On Aug 21 12:29 PM Stone Fox Capital wrote:

> Unless your using the expected 2010 PE ratio your looking in the
> rear view mirror. Its hard to imagine that with a global recovery
> that the SP500 earns less then $80 making the current PE just 12.75.
> Whoever wrote that article is absurd!

"We have become increasingly concerned about the excessive pressure placed on the two boards to make rapid, piecemeal, uncoordinated and prescribed changes to standards," a report today from the FASB and International Accounting Standards Board says. The report deplores politicians' constant meddling in accounting principles.

Wrong. The reason why they are experiencing political pressure is because the banking industry is spending millions of taxpayers' money to lobby Congress to put pressure on the rulemakers to change the rules in their favor.

Disclosure should be transparent and indicative of actual results. The banking industry is spending other people's money to put lipstick on a pig.


On Jul 28 11:46 AM Tom Armistead wrote:

> The reason FASB and IASB are experiencing political pressure is that
> they are sitting around diddling with clarifications and obfuscations
> when they should just admit they are wrong.

"We have become increasingly concerned about the excessive pressure placed on the two boards to make rapid, piecemeal, uncoordinated and prescribed changes to standards," a report today from the FASB and International Accounting Standards Board says. The report deplores politicians' constant meddling in accounting principles.

I didn't know the FASB and IASB had become clubs. WHat members are you referring to?


On Jul 28 10:31 AM Niner wrote:

> If the members of FASB and IASB followed the standards set forth
> by the two organizations, maybe just maybe Congress wouldn't feel
> compelled to meddle!

"We have become increasingly concerned about the excessive pressure placed on the two boards to make rapid, piecemeal, uncoordinated and prescribed changes to standards," a report today from the FASB and International Accounting Standards Board says. The report deplores politicians' constant meddling in accounting principles.

Wrong. It's the banking industry that's spreading money around capitol hill through lobbyists so that they can present anything they want to the public.

On Jul 28 10:21 AM coloneldebugger wrote:

> I guess FASB and IASB would rather just go back to the old way of
> doing accounting. Getting paid off to sign off on whatever their
> client wants to present to the public.

Expect Some Citi Fireworks

I'm going to put my 401K contribution in on the 26th, but the index funds haven't yet had to adjust their holdings because my $200 contribution hasn't been sent yet. For a penny stock like C, I guess that will have at least a 300% effect on the stock price. Gotta make sure I load up on C. ;-)


On May 21 02:09 PM Poor Dude wrote:

> The dilution is known and already priced in, but the index funds
> haven't yet had to adjust their holdings because the conversion hasn't
> yet happened. When it happens (early in June, last I heard), they
> will then be forced to adjust their weightings. And yes, the price
> of Citi could easily quadruple within a few weeks after the conversion.
> (And possibly go up even more, as the last shorts are forced out
> and that whole "momentum" thing gets started.)
>
> It's an interesting point, and one which hadn't occurred to me. Thanks!

Expect Some Citi Fireworks

Mr. Kommer is arguing that the market cap weight in indexes will quadruple with the preferred conversion. Assuming that the valuation of all other index components is constant, that would mean that the equity market cap of C would quadruple witht he preferred conversion.

Although it can be argued that not having to pay the preferred dividend may be beneficial to C, I don't see how that makes C 4x times more valuable on day one. Also the increased float will dilute the equity shares putting downward pressure on the price of the stock.

This is probably the worst analysis I have ever seen on seeking alpha. Why is this article so popular?

Law professor Todd Zywicki ponders the fallout from the Chrysler creditors' "fleecing" at the hands of the government: "What about the untold number of job losses in the future caused by trampling the sanctity of contracts today?" But before making up your mind, you must read Epicurean Dealmaker.

It is neither patriotic nor capitalist to become a parasite of society as the Chrysler bondholders have become. You're just another welfare junkie.

Chrysler is insolvent. The bondholders have a claim in liquidation. Chrysler bondholders do not want their piece of Chrysler in liquidation. They won't realize much. They want a piece of the going concern financed by the government.

The gov't will only provide financing if its under their terms.

If Chrysler wants to press its claims under the entity as a going concern, they should just pony up the cash to recapitalize the company.

Silence...chirp, chirp

Law professor Todd Zywicki ponders the fallout from the Chrysler creditors' "fleecing" at the hands of the government: "What about the untold number of job losses in the future caused by trampling the sanctity of contracts today?" But before making up your mind, you must read Epicurean Dealmaker.

This is what you get when you get your education from Rush Limbaugh and Sean Hannity.

Law professor Todd Zywicki ponders the fallout from the Chrysler creditors' "fleecing" at the hands of the government: "What about the untold number of job losses in the future caused by trampling the sanctity of contracts today?" But before making up your mind, you must read Epicurean Dealmaker.

"Government of the people, by the people, for the people, shall not perish from the Earth."
-Abraham Lincoln

Thankfully he did not write it as follows:
"Government of the corporations, by the corporations, for the corporations, shall not perish from the Earth."

A few bad apples encompasses GM, Ford and Chrystler who fought tooth and nail during the past few decades to abrogate every union contract to curtail wages, healthcare, pensions in order to make up for their management mistakes.

Chrystler bondholders would not be in their situation if they didn't have their hand out to be bailed out by the government, or in other words the people.

Go cry to someone who cares.

Law professor Todd Zywicki ponders the fallout from the Chrysler creditors' "fleecing" at the hands of the government: "What about the untold number of job losses in the future caused by trampling the sanctity of contracts today?" But before making up your mind, you must read Epicurean Dealmaker.

Why is it that when shareholders, bondholders or management get shafted, it is called "trampling the sanctity of contracts today"?

Isn't that exactly what they have been doing to unions and employees for decades?

Seems like the owners of capital don't have any problems trampling on the rights of unions, employees, consumers or any other constituency with which they have a contractual relationship when they no longer feel like paying for wages, health care, pensions, warranties, etc.

They are the frst to hide behind bankruptcy, or threaten it as they will.

Cry me a river for getting exactly what they've been dishing out since the system was created. Can't stop crying when they are seated at the other side of the table and the gov't is protecting the interests of the people.

Mark-to-Market: The Bogeyman of the 1930s Is Back

Notice you haven't responded to any comments that disprove your knowledge of even basic accounting. See contradiction in previous post below. Instead you do into irrelevant tangents regarding 141R.

Sir, you hold yourself out to be a credentialed expert in accounting. I contend that you are a fraud.


On Mar 14 07:42 PM ETFnerd wrote:

> For further evidence, here is the Citigroup Annual Report from 2006
> which does not apply SFAS 157.
>
> idea.sec.gov/Archives/...
>
>
> On page 68, there is a section called: "Mark-to-Market (seekingalpha.com/symbo...)
> Receivables/Payables" which shows the mark-to-market assets and lisbilities
> of Citigroup's derivative contracts.
>
> Again I quote what Mr. Sunshine wrote: "Maybe it is just coincidence,
> but immediately after mark-to-market accounting was restored in 2007
> the banking sector started into a death spiral."
>
> I encourage anyone who attended Mr. Sunshine's accounting classes
> to seek a refund.

Mark-to-Market: The Bogeyman of the 1930s Is Back

^^^
sorry, thet's Citigroup's 2005 annual Report. :)

Mark-to-Market: The Bogeyman of the 1930s Is Back

For further evidence, here is the Citigroup Annual Report from 2006 which does not apply SFAS 157.

idea.sec.gov/Archives/...

On page 68, there is a section called: "Mark-to-Market (MTM) Receivables/Payables" which shows the mark-to-market assets and lisbilities of Citigroup's derivative contracts.

Again I quote what Mr. Sunshine wrote: "Maybe it is just coincidence, but immediately after mark-to-market accounting was restored in 2007 the banking sector started into a death spiral."

I encourage anyone who attended Mr. Sunshine's accounting classes to seek a refund.

Mark-to-Market: The Bogeyman of the 1930s Is Back

Mr. Lounbury-

On May 1993 the FASB issued SFAS 115 effective for fiscal years beginning after December 15, 1993. The following is paragraph 12:

"TRADING SECURITIES AND AVAILABLE-FOR-SALE SECURITIES

12. Investments in debt securities that are not classified as held-to-maturity and equity securities that have readily determinable fair values shall be classified in one of the following categories and measured at fair value in the statement of financial position:

a. Trading securities. Securities that are bought and held principally for the purpose of selling them in the near term (thus held for only a short period of time) shall be classified as trading securities. Trading generally reflects active and frequent buying and selling, and trading securities are generally used with the objective of generating profits on short-term differences in price. [Mortgage-backed securities that are held for sale in conjunction with mortgage banking activities, as described in FASB Statement No. 65, Accounting for Certain Mortgage Banking Activities, shall be classified as trading securities. (Other mortgage-backed securities not held for sale in conjunction with mortgage banking activities shall be classified based on the criteria in this paragraph and paragraph 7.)]"

[bracketed section was superceded by paragraph 5 of SFAS 134]

This evidence positively disproves Mr. Sunshine's assertion:

"For approximately 70 years after FDR’s decision, ***banks operated without mark-to-market accounting*** and the economy didn’t have the threat of another depression."

***my emphasis added.

Anyone with a modicum of accounting knowledge would have immediately known that the above statement by Mr. Sunshine was absurd, which led me to suspect his stated credentials. Another way of knowing his statements were false was to pick up the financial stmts of any large financial institution prior to 2007.

The takeaway is that you shouldn't believe everything you read, and that easily checked facts can derail an argument.

Mark-to-Market: The Bogeyman of the 1930s Is Back

Just looked at your profile that states you worked at Coopers & Lybrand, taught accounting, worked in the Financial Institutions Group, and manage a capital markets firm for a living, etc. Sir, how on earth can you pen an article that states that "banks operated without mark-to-market accounting" from 1938 to 2007?

Are you really who you say you are?