http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=a3Eg4vzAbneA
First Repo 105, now Statement 159
What part of the banks are actually real?
The part that "WE" bailed out?
Statement 159
In the first quarter, the four biggest U.S. lenders -- Bank of America, JPMorgan Chase & Co., Citigroup and Wells Fargo & Co. -- produced combined profit of $13.5 billion, the most since the second quarter of 2007. That figure probably fell by 28 percent in the second quarter, based on a Bloomberg survey of analysts’ estimates. The banks are scheduled to announce results over the next two weeks, led by JPMorgan on July 15.
The second-quarter results may include gains taken under a U.S. accounting rule known as Statement 159, adopted by the Financial Accounting Standards Board in 2007, which allows banks to book profits when the value of their bonds falls from par. The rule expanded the daily marking of banks’ trading assets to their liabilities, under the theory that a profit would be realized if the debt were bought back at a discount.
Accounting ‘Abomination’
In practice, it’s an accounting “abomination” because fluctuations in the value of the debt don’t change the amount the banks owe, said Chris Kotowski, an analyst at Oppenheimer & Co. in New York.
“Just because Morgan’s credit spreads widened out this quarter doesn’t mean that their ultimate interest and principal payments changed one iota,” Kotowski said. “The market will back it out, both on the upside and the downside.”
Showing posts with label JPMorgan Chase Co. Show all posts
Showing posts with label JPMorgan Chase Co. Show all posts
Monday, July 12, 2010
Wednesday, May 5, 2010
Chicago CFO Taking Orders From Daley Increases Taxpayers’ Costs
http://www.bloomberg.com/apps/news?pid=20601109&sid=a5mSw6gETimU
Just another one of the many perks of "The good ole boy's club" that the taxpayer gets to foot the extra bill for.
Chicago Mayor Richard M. Daley hired JPMorgan Chase & Co. investment banker Gene Saffold and gave him a simple order: protect the taxpayer.
“During these tough times, when people are hurting, this is more important than ever,” Daley said in introducing the city’s new chief financial officer in March 2009. “We must be creative and bold in our thinking as we better manage government.”
Not much has changed. Saffold is sticking with the city’s more than two-decade tradition of shunning open bidding for Chicago’s long-term debt, selling $2 billion in bonds through private negotiations with banks. Arranging competitive auctions instead would save taxpayers millions of dollars, according to internal documents and a review of bond sales by the country’s third-largest municipality.
Efforts to introduce competition fail because the city and its aldermen want to reward those who support public officials and politically connected charities, said a former investment banker in Chicago.
“Firms get chosen to be negotiated underwriters as payback,” said J.B. Kurish, now an associate dean at Emory University’s business school in Atlanta.
The city, which requires public bids for any other purchase of more than $100,000, faces the worst financial crisis of Daley’s 21-year tenure. He closed a $520 million deficit in the current budget by tapping a reserve fund from a 75-year lease of parking meters, putting workers on unpaid furlough days and eliminating funding for civic traditions such as Venetian Night, a lakefront festival Daley’s father started as mayor more than 50 years ago.
Just another one of the many perks of "The good ole boy's club" that the taxpayer gets to foot the extra bill for.
Chicago Mayor Richard M. Daley hired JPMorgan Chase & Co. investment banker Gene Saffold and gave him a simple order: protect the taxpayer.
“During these tough times, when people are hurting, this is more important than ever,” Daley said in introducing the city’s new chief financial officer in March 2009. “We must be creative and bold in our thinking as we better manage government.”
Not much has changed. Saffold is sticking with the city’s more than two-decade tradition of shunning open bidding for Chicago’s long-term debt, selling $2 billion in bonds through private negotiations with banks. Arranging competitive auctions instead would save taxpayers millions of dollars, according to internal documents and a review of bond sales by the country’s third-largest municipality.
Efforts to introduce competition fail because the city and its aldermen want to reward those who support public officials and politically connected charities, said a former investment banker in Chicago.
“Firms get chosen to be negotiated underwriters as payback,” said J.B. Kurish, now an associate dean at Emory University’s business school in Atlanta.
The city, which requires public bids for any other purchase of more than $100,000, faces the worst financial crisis of Daley’s 21-year tenure. He closed a $520 million deficit in the current budget by tapping a reserve fund from a 75-year lease of parking meters, putting workers on unpaid furlough days and eliminating funding for civic traditions such as Venetian Night, a lakefront festival Daley’s father started as mayor more than 50 years ago.
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