You are viewing an obsolete version of the DU website which is no longer supported by the Administrators. Visit The New DU.
Democratic Underground Latest Greatest Lobby Journals Search Options Help Login
Google

Reply #9: Denninger explains it well: [View All]

Printer-friendly format Printer-friendly format
Printer-friendly format Email this thread to a friend
Printer-friendly format Bookmark this thread
Home » Discuss » Topic Forums » Economy Donate to DU
dixiegrrrrl Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Sep-15-11 04:50 PM
Response to Reply #1
9. Denninger explains it well:
His perspective on finances is almost always on the money and ahead of the curve.


"Oh Look! More Accounting Fraud!

Wait a second... this isn't actually new!

Remember, The Fed previously (like more than a year ago) announced these swap lines and more-recently announced their extension. So not only is this not new, it's not news!

But the market is up big on the non-news news. Why? Because it appears banks are still going to be able to lie about asset values - for a little while longer.

Actually, it makes banks much more dangerous. Having neutered regulators you see lots of grins and no fear that actual accounting at current value is likely to show up any time soon. This in turn leaves banks levered up the ying-yang and in many cases deeply underwater.

This in not just a US phenomena, although you can sure see it here, as most of the big banks have stock prices of half or less of the claimed "book value." This is of course illogical; if anyone believed those values they'd immediately buy the company and make an instant 100% (or more) profit, even if they had to dismantle and sell off the bank to do it.

Clearly, the market's expectation is that the so-called "values" are lies. And from this belief comes systemic risk, because now any event that threatens to force recognition of true value is an immediate bankruptcy trigger."

http://market-ticker.org/akcs-www?post=194210
Printer Friendly | Permalink | Reply | Top
 

Home » Discuss » Topic Forums » Economy Donate to DU

Powered by DCForum+ Version 1.1 Copyright 1997-2002 DCScripts.com
Software has been extensively modified by the DU administrators


Important Notices: By participating on this discussion board, visitors agree to abide by the rules outlined on our Rules page. Messages posted on the Democratic Underground Discussion Forums are the opinions of the individuals who post them, and do not necessarily represent the opinions of Democratic Underground, LLC.

Home  |  Discussion Forums  |  Journals |  Store  |  Donate

About DU  |  Contact Us  |  Privacy Policy

Got a message for Democratic Underground? Click here to send us a message.

© 2001 - 2011 Democratic Underground, LLC