It Doesn’t Add Up.
According to The Wall Street Journal, today S&P Cut Ratings on 11 Banks.
Depending upon each institution’s accounting policies, individuals at those firms may have cheered their firm’s respective downgrade because that action may have reduce the value of the firm’s outstanding debt thereby allowing the firm to recognize an unrealized gain on its income statement. (Yeah, it is perverse and stupid.)
For example, by combining the contents of this article about Morgan Stanley’s fourth quarter earnings and page two of this report, it seems that Morgan… Read the rest
