Monthly Archives: March 2009

Of Course not at Par; That’s Par for the Course

There are several truths well-known to educated investors that have been glossed over in all of the discussions of mark-to-market accounting, or SFAS 157.  (Really SFAS 133, but SFAS 157 clarified it.) Accounting rules have little impact on stock prices.  Almost every academic study on accounting rules supports that idea.  Why?  Investors attempt to estimate […]

The Great Omission

This seems to be the era for dusting off old articles of mine.  This one is one year old, I wrote it on April Fools’ Day — Federal Office for Oversight of Leverage [FOOL].  (Today I would simplify it to: Federal Office Overseeing Leverage.) I would recommend a re-read of that article, and encourage those […]

Translation: We Really, REALLY, Hate You Guys!!

From an earlier post, point 4: “We hate you guys. Once you start issuing $1 trillion-$2 trillion [$1,000bn-$2,000bn] . . .we know the dollar is going to depreciate, so we hate you guys but there is nothing much we can do.” [emphasis mine] So said Mr. Luo, a director-general at the China Banking Regulatory Commission.  […]

Liquidity and the Current Proposal by the US Treasury

One of the earliest pieces at this blog was What is Liquidity?, followed by What is Liquidity? (Part II).  I’ve written a bunch of pieces on liquidity (after doing a Google search and being surprised at the result), largely because people, even sophisticated investors and unsophisticated politicians and regulators misunderstand it.  Let’s start with one […]

Add a New Chapter to the Bankruptcy Code, Redux

Given the news of the morning, I thought I would dust off my four-month old proposal Add a New Chapter to the Bankruptcy Code.  Until we limit our dear government’s power to encourage the private sector to borrow money until it chokes, we need something that enables timely reduction of debt in TBTF (too big […]

AIG — There are Many Criminals Here

It could probably be shown by facts and figures that there is no distinctly native American criminal class except Congress. – Pudd’nhead Wilson’s New Calendar (from There are many upset over the bonuses paid to AIG employees, most notably politicians seeking to curry favor with voters.  That these bonuses were known to the Fed, […]