From Hedgefinger.blogspot.com:
http://hedgefinger.blogspot.com/2007/09/whos-been-cooking-books-wall-street.html
The August 3 edition of Asset Back Alert (www.ABAlert.com) (a weekly report that goes out to major finances houses and investors willing to pay nearly $2,500 for an annual subscription) carries an article titled âMerrill Ducks Asset Markdowns, But How?â The article raises serious questions about the dubious accounting measures taken by Wall Street giant Merrill Lynch to avoid writing down billions of dollars in losses resulting from the sub-prime mortgage meltdown.
While according to ABAlert, what Merrill did with investments in the sub-prime market estimated at $15 billion is not yet known. âOne often-cited theory is that the bank transferred the banged-up investments from an available for sale account within its brokerage unit to a hold to maturity portfolio at affiliate Merrill Lynch Bank in late June.
âSuch a move,â the article continues, âwould have enabled the company to follow friendlier accounting procedures, since the contents of the for-sale portfolio must be marked to market [assigned a value based on what they would fetch at current market rates] on a routine basis and the values of assets in the hold book donât have to be updated until they come due or are sold.â
âThanks to this accounting maneuver, Merrill posted second quarter earnings that were stronger than expected.
MERRILL forgot to downgrade itself couple of days ago ! Instead of donwgrading companies like WALMART ( what a coincedence that today of all days WALMART reported 3,1 % gain in August same store sales )
http://hedgefinger.blogspot.com/2007/09/whos-been-cooking-books-wall-street.html
The August 3 edition of Asset Back Alert (www.ABAlert.com) (a weekly report that goes out to major finances houses and investors willing to pay nearly $2,500 for an annual subscription) carries an article titled âMerrill Ducks Asset Markdowns, But How?â The article raises serious questions about the dubious accounting measures taken by Wall Street giant Merrill Lynch to avoid writing down billions of dollars in losses resulting from the sub-prime mortgage meltdown.
While according to ABAlert, what Merrill did with investments in the sub-prime market estimated at $15 billion is not yet known. âOne often-cited theory is that the bank transferred the banged-up investments from an available for sale account within its brokerage unit to a hold to maturity portfolio at affiliate Merrill Lynch Bank in late June.
âSuch a move,â the article continues, âwould have enabled the company to follow friendlier accounting procedures, since the contents of the for-sale portfolio must be marked to market [assigned a value based on what they would fetch at current market rates] on a routine basis and the values of assets in the hold book donât have to be updated until they come due or are sold.â
âThanks to this accounting maneuver, Merrill posted second quarter earnings that were stronger than expected.
MERRILL forgot to downgrade itself couple of days ago ! Instead of donwgrading companies like WALMART ( what a coincedence that today of all days WALMART reported 3,1 % gain in August same store sales )
