Thursday, May 22, 2008

I have some Tulip bulbs from the 18th century, let’s mark those at £1m each

Top banks call for relaxed writedown rules

The world’s leading banks have stepped up pressure to relax controversial accounting rules with a new plan aimed at breaking the “downward spiral” of huge writedowns, emergency fundraisings and fire-sales of assets. The proposals on “fair value” accounting by the Institute of International Finance, an alliance of 300-plus companies chaired by Josef Ackermann, Deutsche Bank’s chairman, would enable financial companies to cushion the blow of financial crises by valuing illiquid assets using historical, rather than market, prices.

Posted by lvmreader @ 12:37 AM (805 views)
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7 thoughts on “I have some Tulip bulbs from the 18th century, let’s mark those at £1m each

  • Gee, I guess they’ll only be too happy to return ALL that money they booked as profits then. I didn’t hear complaining on the way up. In fact I seem to remember them thinking they were hot stuff.

    Let’s see – when reality is audacious enough to ruin your ego-party, change the rules so you still win.

    What do these guys do at the racetrack – tell the bookie to change their bet AFTER the race has run so they win?

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  • If the principle of selling things at historical prices could be extended to other assets, I might be interested.

    Are any of these clever bankers willing to sell me gold at historical prices?

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  • Cristiano Barbaro says:

    The bankers are deluding themselves. You can’t stop the snowball from becoming an avalanche now. Even if they succeed in what they are asking for, it will not return confidence in the market and the HPC will not be stopped. However if their ill thought out requests do g through, this will mean another huge wave of inflation hitting western economies, which is to be added to the 130 plus oil price effects which is happening now. Come July/Aug, we will all feel the real pain on the supermarket shelves. I don’t believe in the free market anymore. Some things should be regulated. We should follow Argentina’s lead – they are creating a national agricuture board for the production of maize and other basic foodstuffs at fair prices for the farmer and for the supermarkets. And unlike the WTO’s reccomendations, they are planning to increase food production. Just like they revived their economy by re-focusing on high tech industrialization and telling the IMF to get st*ffed 8 years ago, today they are doing this to those inhuman freaks running the WTO. It is not a wonder that Argentina is achieving economic success now, and putting food on the table of its people. What I do find interesting though is that the media here in the West has been ignoring this story totally for the past 8 years. Of course, when one looks at who owns the western media, one is not surprised.

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  • The comment about Dutch tulip bulbs(in the headline) is much to the point.But they were a productive asset which the buyers did not want merely for private collections; they sought to propagate them and recover their high initial outlays.
    Compared to buying houses and the land underneath which cannot reproduce themselves, the Tulip Mania looks quite sensible.

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  • Cristiano – that’s interesting to hear, and you’re right about the western media. We’re constantly told that they are left-biased, yet we hear nothing of more social- rather that market-based South American economic success stories.

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  • Weren’t relaxed valuation rules what caused the problem in the first place? Great idea – create a problem, but if the solution is too painful, simply ignore the solution and pretend that the problem is normal.

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  • oink, oink, oink…mmm is good having one’s snout in the trough…oink, oink, oink.

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