{"id":8778,"date":"2009-05-06T20:36:43","date_gmt":"2009-05-06T20:36:43","guid":{"rendered":""},"modified":"2009-05-06T20:36:43","modified_gmt":"2009-05-06T20:36:43","slug":"wall-street-banks-need-to-stop-using-funny-math","status":"publish","type":"post","link":"https:\/\/calitics.com\/index.php\/2009\/05\/06\/wall-street-banks-need-to-stop-using-funny-math\/","title":{"rendered":"Wall Street Banks Need To Stop Using Funny Math"},"content":{"rendered":"<p><i>(Say Hi to Asm. Lieu. NPR&#8217;s Planet Money podcast did a <a href=http:\/\/www.npr.org\/blogs\/money\/2009\/04\/hear_shadow_banking.html>good report on this subject<\/a> as well. &#8211; promoted by Brian Leubitz<\/i>)<\/p>\n<p>Two weeks ago, Bank of America surprised Wall Street by posting an alleged &#8216;strong&#8217; profit of $4.2 billion the first quarter of this year.\u00a0Now we know how they arrived at those numbers:\u00a0 funny math.\u00a0Today we learned that Bank of America actually needs another $34 billion injection of capital in order to survive.\u00a0<\/p>\n<p>Bank of America is not the only firm using funny numbers.\u00a0 Goldman Sachs posted an alleged profit of $1.8 billion for the first quarter of 2009.\u00a0 The company had previously followed a calendar quarter that ran from December to February.\u00a0 However, Goldman Sachs conveniently and suddenly decided to change its accounting to a calendar year schedule, and changed their fiscal year to start in January, effectively eliminating December&#8217;s results.\u00a0 The company had suffered large losses in December.\u00a0 So the &#8216;profit&#8217; Goldman Sachs posted doesn&#8217;t account for the entire missing month of December.<br \/>\n<br \/>\u00a0<\/p>\n<p>Funny numbers, lack of transparency, and the obscuring of risk were some of the prime causes of Wall Street&#8217;s economic collapse, a collapse that started our recession. &nbsp;America&#8217;s recession will be prolonged if investors continue to stay on the sidelines because they are unable to ascertain the true value of banks and other companies. &nbsp;<\/p>\n<p>It is time for Wall Street firms to come clean and start telling Americans the truth.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Two weeks ago, Bank of America surprised Wall Street by posting an alleged &#8216;strong&#8217; profit of $4.2 billion the first quarter of this year.\u00a0Now we know how they arrived at those numbers:\u00a0 funny math.\u00a0Today we learned that Bank of America actually needs another $34 billion injection of capital in order to survive.\u00a0<\/p>\n<p>Bank of America is not the only firm using funny numbers.\u00a0 Goldman Sachs posted an alleged profit of $1.8 billion for the first quarter of 2009.\u00a0 The company had previously followed a calendar quarter that ran from December to February.\u00a0 However, Goldman Sachs conveniently and suddenly decided to change its accounting to a calendar year schedule, and changed their fiscal year to start in January, effectively eliminating December&#8217;s results.\u00a0 The company had suffered large losses in December.\u00a0 So the &#8216;profit&#8217; Goldman Sachs posted doesn&#8217;t account for the entire missing month of December.<br \/>\n<br \/>\u00a0<\/p>\n","protected":false},"author":1997,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[],"tags":[6377,3811,6692,4257,6069],"class_list":["post-8778","post","type-post","status-publish","format-standard","hentry","tag-6377","tag-3811","tag-6692","tag-4257","tag-6069"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack-related-posts":[],"jetpack_shortlink":"https:\/\/wp.me\/p6Pvhz-2hA","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/calitics.com\/index.php\/wp-json\/wp\/v2\/posts\/8778","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/calitics.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/calitics.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/calitics.com\/index.php\/wp-json\/wp\/v2\/users\/1997"}],"replies":[{"embeddable":true,"href":"https:\/\/calitics.com\/index.php\/wp-json\/wp\/v2\/comments?post=8778"}],"version-history":[{"count":0,"href":"https:\/\/calitics.com\/index.php\/wp-json\/wp\/v2\/posts\/8778\/revisions"}],"wp:attachment":[{"href":"https:\/\/calitics.com\/index.php\/wp-json\/wp\/v2\/media?parent=8778"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/calitics.com\/index.php\/wp-json\/wp\/v2\/categories?post=8778"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/calitics.com\/index.php\/wp-json\/wp\/v2\/tags?post=8778"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}