- With accounting year-end approaching many wonder how to value illiquid securities that are sitting on the balance sheets of banks, funds and corporates. Here is a link to interesting Washington Post article about creative accounting. A quote:
“In October, largely hidden from public view, the International Accounting Standards Board changed the rules so European banks could make their balance sheets look better. The action let the banks rewrite history, picking and choosing among their problem investments to essentially claim that some had been on a different set of books before the financial crisis started.
The results were dramatic. Deutsche Bank shifted $32 billion of troubled assets, turning a $970 million quarterly pretax loss into $120 million profit. And the securities markets were fooled, bidding Deutsche Bank’s shares up nearly 19 percent on Oct. 30, the day it made the startling announcement that it had turned an unexpected profit.”
- MarketWatch has 10 investment ideas how to make money in 2009. It is all very conservative: government bonds, high grade corporate bonds, TIPS, companies with strong balance sheets (whatever that means, see earlier bullet), if stocks then healthcare and telcos.