On Mon, 13 Oct 2008 21:30:30 -0500, Ignoramus31919
wrote:
http://www.nytimes.com/2008/10/14/bu...4treasury.html
``The government will purchase perpectual preferred shares in all the
largest U.S. banking companies. The shares will notbe dilutive to
current shareholders, a concern to banking chie executives, because
perpetual preferred stock holders are paid a dividend, not a portion
of earnings.''
Excuse me?
Adding perpetual "holders" who are paid dividends is dilutive by
definition.
So the government plan is to give big money to big banks. That's easy.
snip bunch of good stuff
-----------------------------
Even more insane is the huge valuations placed on "good will" by
not only the banks but many of the other major US corporations,
including automotive.
When "good will" and other assets in the "cobwebs and moonbeams"
category are stripped out, many of these corporations have
*NEGATIVE* stockholder equity.
Anyone see a problem with a mandatory 5 year straight-line
amortization/write-off of "good will?"
Remember -- these are the corporations where *YOUR* tax money is
being and will be "invested." It should also be clear why the
Sarbanes-Oxley "mark to market" asset valuation mandate is such
a knot in their pantyhose.
-----------------
Regions Financial Must Think We're All Stoned: Jonathan Weil
Commentary by Jonathan Weil
Oct. 23 (Bloomberg) -- You have to wonder who the people running
Regions Financial Corp. think they're kidding.
So far this year, the Birmingham, Alabama-based regional bank
says it has earned $622.5 million, including $79.5 million of net
income last quarter. In reality, Regions probably has lost
billions. The bosses just won't admit it.
It all comes down to that pneumatic, intangible asset known as
goodwill, which is about as valuable as the air in a paper sack.
As of Sept. 30, according to Regions, the bank's goodwill was
worth $11.5 billion, slightly more than the quarter before.
That's about 59 percent of Regions' book value, and $4.1 billion
more than what the stock market says the entire company is worth.
snip
It's become standard fare for banks to insult the public's
intelligence by publishing asset values that defy logic. Saying
Regions' goodwill is worth $11.5 billion would be like a hen
bragging that her unlaid egg weighs more than she does.
Matter of Trust
There's a bigger problem here, though. By sticking to that
goodwill valuation, Regions executives might as well be telling
us we can't trust a single number on their financial statements.
This is a lesson they should have learned already from Wachovia
Corp. and Washington Mutual Inc. It wasn't until yesterday, long
after its stock collapsed, that Wachovia finally began writing
down some of the $14.9 billion of goodwill from its October 2006
acquisition of mortgage lender Golden West Financial Corp., near
the housing bubble's peak.
Before then, the Golden West goodwill, all by itself, purportedly
was worth more than Wells Fargo & Co.'s purchase price for all of
Wachovia. Similarly, Washington Mutual for months was trading for
less than the supposed value of its goodwill, until the thrift
filed for bankruptcy last month.
Those companies might have stood a chance of surviving if they'd
come clean about their asset values much sooner. Instead, they
got carried off the field.
snip
It's also of little comfort that Regions is the largest audit
client of Ernst & Young LLP's Birmingham office. Back in 2003,
that office's largest client had been HealthSouth Corp., which
turned out to be a massive fraud.
There's something strange about this town, too. Jefferson County,
home to Birmingham, is almost insolvent. Last week, county
commissioners there defeated a proposal to file for bankruptcy.
It was a close vote, though, 3-2.
snip
---------------
for complete article click on
http://www.bloomberg.com/apps/news?p...T_Y&refer=home
Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?
Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).