Comments on: Bank of America Sort of Beats, Thanks to a $1.9 Billion Pre-Tax Gain on the Sale of Shares of China Construction Bank http://www.aleablog.com/bank-of-america-sort-of-beats-thanks-to-a-19-billion-pre-tax-gain-on-the-sale-of-shares-of-china-construction-bank/ Alea Jacta Est Wed, 03 Mar 2010 18:43:34 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: CapVandal http://www.aleablog.com/bank-of-america-sort-of-beats-thanks-to-a-19-billion-pre-tax-gain-on-the-sale-of-shares-of-china-construction-bank/#comment-2940 CapVandal Tue, 21 Apr 2009 00:12:25 +0000 http://www.aleablog.com/?p=3150#comment-2940 Morgan Stanley is booking a loss because their debt INCREASED in market value. All the M2M bigots need to get used to what it really means. Which is all items on the balance sheet. Which means you get stupid results frequently. If all companies marked their debt to market, they would have shown record profits like BAC. If people really thought, they would realize that M2M is great for trading outfits, derivative books, etc. And not much else in the real world or real world businesses. Mostly because most values aren't part of deep, liquid markets. Like intellectual property, for example. Or brands. And companies do buy back debt at a discount, although not frequently enough. All disclosure rules regarding that should be suspended. People want mirror accounting except when they don't. For the financially literate, the minimum value of a common stock is $0. Therefore, a "realistic" market value would book debt at prices to keep the book value positive. However, I prefer Luddite based GAAP myself. Going concern and all. Morgan Stanley is booking a loss because their debt INCREASED in market value.

All the M2M bigots need to get used to what it really means. Which is all items on the balance sheet. Which means you get stupid results frequently.

If all companies marked their debt to market, they would have shown record profits like BAC.

If people really thought, they would realize that M2M is great for trading outfits, derivative books, etc. And not much else in the real world or real world businesses. Mostly because most values aren’t part of deep, liquid markets. Like intellectual property, for example. Or brands.

And companies do buy back debt at a discount, although not frequently enough. All disclosure rules regarding that should be suspended.

People want mirror accounting except when they don’t.

For the financially literate, the minimum value of a common stock is $0. Therefore, a “realistic” market value would book debt at prices to keep the book value positive. However, I prefer Luddite based GAAP myself. Going concern and all.

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