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House Price Crash Forum


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Everything posted by Police

  1. Capitalism has a very good remedy - its called default. If default doesn't occur an it is actively prevented - again this is not the fault of a "system" but the fault of the people running it. People will always corrupt - no matter the system - and there's no accounting for them. But you keep poking fun at nuts and bolts. I'm sure the real culprits are happy with your irrelevance.
  2. So no banks have written down Greek debt holdings they have? They are recorded at face value? What were the market valuations and trading patterns for MF deposit accounts or Bernie Madoff accounts before they folded?
  3. But all this is irrelevant to the thread. Banks have to have their accounts signed off. The auditors are agents of the regulators and the State. If bad practice occurs, it occurs with the nod of the regulators and the State. The regulations are there - they work - they just need to be enforced. That's a falling of people not accrual accounting. As for mark-to-model - I see no problem with that provided you expect to hold the asset till maturity and the asset is performing. Who cares what the market value is? What about capital expenditure by any normal company - they hold these assets on their books at purchase value minus depreciation - regardless of their actual market value.
  4. Why is it wrong if you have expensed a loan provision? This mitigates the phantom revenues you book. Arguing about not making correct provision - or not valuing assets correctly - is irrelevant to the OP.
  5. No. http://www.investopedia.com/terms/a/accrualaccounting.asp Not sure what part of the maths you are having trouble with. You expense a provision on anticipated defaults. This is non-cash expense. You book revenue on phantom interest. No cash arrives. Where is the profit given it is the difference between expenses and revenues?
  6. Exactly. Profits are only possible if you book revenue - you only book revenue when you have deemed to have earned it. You cannot deemed to have earned it if you have also stated it is in "default". If someone is charging you interest on a defaulting account and booking revenue they will probably be booking an expense with the expectation of not receiving it. Where is your profit now? It's called accrual accounting.
  7. Yes, revenue is income. Interest due is income. You have deemed to have earned it so can book it as revenue. Interest you pay to your savers are an interest "expense". No you don't book profit - you book your revenues and expenses. The difference between the two forms your profit. If you have recognized something as being in default then you don't book revenue anymore. You are getting confused between revenue and cash payments. If the coupon stops getting paid you certainly won't be booking revenue because of this recognised default. Loan loss provisions are expenses - in anticipation of future defaults - mitigating revenue that won't result in actual cash payment. You should not be booking revenue for an account that you know to be in default - I'm sure you would be breaking numerous accounting regulations and highlighting such fraudulence is of no value in a general discussion on "Where does money come from". But then you do have an axe grind and never miss an opportunity.
  8. Interest is revenue. How else can you book a profit or loss if it was not.
  9. You did say "interest default" right? That is the qualification. You don't keep booking revenue if the account is recognized in default.
  10. Sorry, I haven't got a clue what you are on about and I suspect neither do you.
  11. Obviously you've never heard of loss provision.
  12. Unfortunately, no. It's a crisis of income. If all debt money flowed back as income to consumers we wouldn't have a debt problem. Furthermore, if it did flow back - what need would there be to get into this degree of debt in the first place? The root cause of this crisis is a devaluation of labour and over-production. Regulation and corruption are contributing factors but not the root cause either. A highly-regulated economy can still function if everyone shares what spoils are produced.
  13. Portugal don't have to go to the market so it matters little.
  14. There's one who says he's willing for gold to drop to $1000 an oz so he can back up the truck. Can only mean he doesn't have much capital invested in the first place.
  15. That was a different sort of "warm".
  16. Can you? Start with Mercury.
  17. Shhhhh. Better not to open your mouth at this juncture.
  18. Of course - but it will never be a replacement for state-backed traceable and auditable depositories.
  19. Bitcoin will never penetrate big business and big business is the ultimate decider on what money is in predominant use. Would a large corporation trust it's cash management team with a few billion in anonymous cash stored onsite? No, and likewise they wont trust them with anonymous e-money.
  20. I didn't read anything about the new operation of flights. If you "didn't read nothing" it means you read something. *just helping*
  21. Hardly, since profit is the difference between revenue and expenses. Borrowing money doesn't increase your revenue.
  22. Are they advocating? It's preposterous to suggest that the US government could have just printed up $14 Trillion US dollars instead of borrowing them. Inflation would have been nuts and the currency probably already dead. In fact given the ever increasing price levels - they would have probably need to have printed $100 Trillion by this point.
  23. Except money doesn't leave the country does it? If youre selling GBP, someone is buying. Of course if there is more wanting to leave than wanting to enter its price lowers - but hey isn't that what works for globalised asia - a cheap currency?
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