 - Last login: 3 hours agoVousDeux
- the one you were warned you about is a 44 year old guy from Cadillac, Michigan, USA.
- Likes 817 pages, 1 video, 3 photos • 189 fans • Received 52 reviews
- Member since Sep 18, 2003
I'm just a busy guy who occasionally has something I want to say. Now, whether anyone is interested or not may be another story (while viewing this blog, you may want to make certain that you have selected the "Entire Blog," or "His Blog" setting.)
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On Nov. 15, 2007, I posted the following comments about FASB 157:
<--SNIP--
...I think it means that the banks will have to put realistic valuations on their remaining massive sub-prime holdings. Does this say "uh-oh" for the next quarter?
--SNIP-->
As it turns out, I was sadly mistaken about my interpretation of FASB 157. Instead of meaning that the banks would have to report the true value of the stuff they had hidden from their balance sheets, it really turns out that it meant they could report those items at a reduced value; rather than the actual value that was lost.
This method of reporting allowed them to report lower losses because it allowed them to report the current market value for their growing inventory of housing foreclosures. Had they been forced to report the actual value of the assets, before deducting for losses, they would have had to report way more than the $900 billion of future losses that is currently being estimated.
Oops!
It seems like, for now anyway, that future losses really don't matter much anymore; because everyone has become comfortable with the bad news. Since it is not a surprise anymore, the market does not seem to be reacting negatively anymore either.
It would seem likely, then, that the next big move in the market would have to come because of some new surprise. However, since we have been seeing so much bullish behavior lately, a whole bunch of people out there had better be hoping for a nice surprise; because there sure doesn't seem to be many reasons to believe that anything like earnings will carry this market forward in any meaningful sort of way.
In fact, with all of the Fed pumping still going on, I really wouldn't be terribly surprised if the market were to find its way back on a southward-bound path before summer arrives.
Be careful out there!
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