With the I-Pad set to release in about 2 months time, it is time to check out how great this new gadget will be.
This review of the I-pad highlights its most enticing features.
|Name:||Anne Whitney Hathaway|
|Date of birth:||November 12, 1982|
|Birth Place:||Brooklyn, New York, USA|
|Education:|| Graduated from Millburn High School |
Attended Vassar College in Poughkeepsie, New York in 2000, majored in English and minored in Women's Studies
Tranferred to New York University's Gallatin School of Individualized Study in 2005
|Measurements:||34 - 24 - 34|
How is it possible for you to make "record profits" while your asset quality continues to deteriorate, payment performance continues to deteriorate, the ability of people to pay loans you gave them continues to deteriorate and the recovery value of the assets behind those loans continues to deteriorate?
You get to define "record profits" by intentionally understating both fair value and reasonably-expected losses. Major institutions are paying out "compensation" with what amounts to fake money that was in fact not earned (due to all the hidden losses) is almost precisely what Madoff did with his clients – albeit a much larger scale. Can someone spell ponzi? Maybe that word is too hard to learn.
Unfortunately, such a strategy is purely temporary as the underlying quality (or lack thereof) of the assets will eventually break light, forcing recognition. By then, these "earnings" will have evaporated, leading questions “Where have my money gone?”.
What really ticks me is bogus valuations that continue to be claimed by institutions and their refusal to come clean about the false profits being made. The fact that these institutions could escape such a levy by breaking themselves up and thus not being subject to it offers a positive. Broken up they would lose their seminal argument for why they should be "too big to fail".
We are past the point when we argue that allowing all of these institutions to go bankrupt would have destroyed the economy or lending generally. If any, it would have destroyed those who bought fraudulent securities and those who issued them, which is actually the only right thing to do.
When the FASB decided to (temporarily) suspend mark-to-market and replace it with mark-to-whatever-you need-to-make-your-quarterly-bonus, it ripped out one of the last pillars of true accountability.
The most common rationale for the move was the idea that banks shouldn't be penalized by short-term movements in the asset price, if their intention is to hold the loan until maturity. Sounds legitimate, until you look under the hood: no rational accountant would have allowed marking bonds at par, simply because of the plan to hold them until maturity. There's another issue at work, namely, the creditworthiness of borrower. Nobody believes these crummy loans are worth a hundred cents on the dollar, including the guy who just sold them for 35 cents.
Similarly, according to The Canadian Press, President Barack Obama said with reference to his proposed plans to impose a $90 billion tax levy on big financial institutions to recoup some of the costs of the financial crisis:
If the big financial firms can afford massive bonuses, they can afford to pay back the American people.
The $90 billion Obama will extract from Wall Street won’t even begin to shrink the monster deficit the Fed has run up. But that is a problem for the next administration (probably Republicans). Who said politics isn’t fun? As Obama’s assistant Rahm Emanuel put it, ‘Its a shame to let a good crisis go to waste.’
Now, do we live in a world of fools that none actually realize when market conditions are characterized by unfavorable valuations, overbought conditions, over-bullish sentiment, and upward yield pressures, the market’s tendency is exactly that - to make continued marginal new highs for some period of time, followed by abrupt and often steep losses virtually out of nowhere? I think not. Many simply live in denial, hoping to postpone the problems to such time in the future when they would not be around to suffer the consequence.