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dkgoyal

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  • The 3 Scariest Government Charts [View article]
    This article really didn't make any sense. About first part, on spending, data provided by author shows that spending on national defense reduced between 1955 & 2010, and spending in other areas increased. "So what?". Unless author provides more data, he can't expect us to conclude anything. Can we attribute reduction in defense spending to the end of cold war? or is it possible that more spending is now happening through homeland security and that spending goes to other category. Author also needs to explain what is wrong if overall security spending is reduced. Perhaps that is a good thing and spending should be moved to activities within boundaries of United states.
    Second part of this article also conveys a partial picture. If you look at changes in Ginni curve and income growth by segments of population between 1940 and 2010, you will find that in 2010 almost 50% of US households were earning less than $42,327. Real income has gone down during last two decades and income inequality has gone up. How much "income" tax do you expect a household earning $42,327 to pay?
    Oct 5 08:58 AM | Likes Like |Link to Comment
  • "They can't get rid of this rule fast enough," says a bank analyst of the FASB's progress toward eliminating the debt valuation adjustment (DVA) from bank earnings. The rule - which perversely adds to earnings as a bank's credit deteriorates (and subtracts from the bottom line as credit improves) - has been behind big whipsaws in reported numbers in recent quarters (Q3 will be no exception). "(It's) one of the more ridiculous concepts that's ever been invented in accounting," says Jamie Dimon. [View news story]
    I did some further investigation on this subject. It appears that financial institutions were lobbying for DVA and argued that it wasn't fair to make them mark their assets to market value if they couldn't also mark their liabilities. (quoted from http://bloom.bg/R7L258)
    In my opinion, this argument holds no merit. Balance sheet is a snap shot. It is correct to show depreciated values of assets because if today company has to get rid of those assets, that is the value company will get. However, in case of debt bonds, a company will need to pay full face value. EVA rule doesn't really make any sense.
    Oct 1 02:47 PM | 1 Like Like |Link to Comment
  • "They can't get rid of this rule fast enough," says a bank analyst of the FASB's progress toward eliminating the debt valuation adjustment (DVA) from bank earnings. The rule - which perversely adds to earnings as a bank's credit deteriorates (and subtracts from the bottom line as credit improves) - has been behind big whipsaws in reported numbers in recent quarters (Q3 will be no exception). "(It's) one of the more ridiculous concepts that's ever been invented in accounting," says Jamie Dimon. [View news story]
    Why was DVA allowed by FASB? Were there any positives?
    Oct 1 10:27 AM | 1 Like Like |Link to Comment
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