1. Bill Cosby.
2. ATMs. (Some of you will take a second with that one.)
3. The New York Times.
That's not to say that the Times doesn't ever make sense. Just yesterday it reported that there is, in fact, a lot of water near an island. But this is the paper that publishes the columns of the broken calculator that is Paul Krugman - expecting nothing but logic will only lead to disappointment. Still, Krugman seems like Spock when compared to this:
Mortgage securities prices have rallied, allowing banks to book hefty gains on their investment portfolios....
Aggressive accounting could also pump up the lenders’ results. Most of the big banks took advantage of an 11th-hour rule accounting rule change in the first quarter to book smaller losses on troubled securities. Jack T. Ciesielski of The Analyst’s Accounting Observer estimated that without the change, earnings for the biggest banks in the Standard & Poor’s financial index would have been almost cut in half. In the second quarter, the impact could be even greater.
Ahem.
How can you write both of those things in the same article?!
Even if you believe that Ciesielski's estimates are perfectly accurate (they're probably far too conservative), the banks claimed that they were posting record profits in the first quarter. If they lost half of those, there's no way that any little upward blip caused by the market backing off from full-on Armageddon mode. And it really is a blip - when Timothy Geithner was first unveiling the billions in taxpayers losses known as the PPIP, the most common description of the "firesale prices" that mortgage-backed securities were going for was 20-30 cents on the dollar. What did Wells Fargo just sell $600 million in those securities for? The profit-laden price of... 35 cents on the dollar. That's roughly $1.2 billion in losses, for those of you who hate the maths.
Somehow, someway, Wells will turn that into a massive gain in its third-quarter report.
