| Subject: | [socialcredit] Re: OWNERSHIP: Replying to Matt Greco--the "zero sum" fallacy | | Date: | Sunday, May 1, 2005 12:34:59 (-0700) | | From: | William B. Ryan <w_b_ryan @.....com>
|
You might be more specific as to the regulatory change
regarding banks. The general rule is that you don't
book profit without a sale. If you are showing on
your
balance sheet "unrealized" capital gains, you clearly
indicate that's what you are showing.
Yes, with commercial firms, too, you might mark assets
at their estimated present value, if you are looking
for a buyer for the firm, or to demonstrate net worth
in applying for a loan--but you clearly indicate that
is what you are doing.
What you don't do is deceptively indicate the firm is
profitable operationally, if it's not. That would be
fraud.
Now, accounting standards have indeed changed in the
last couple of decades--for the worse. Witness Enron,
Parmalat, etc.
With "binary economics" we have an entire ideology
that
thinks profit is automatic, and that loans will
"self-liquidate."
Absent from the discussion is that profit is dependent
on finding cutomers for your product or service, who
will pay a price that is greater than your costs of
production for the totality of your production.
--- Matvox@aol.com wrote:
> Bill,
> again, there are circumstances when they do so
> account for their assets.
> Banks are required by regulators to mark certain
> assets to market, even though
> they haven't sold the assets and the value may vary
> on a daily basis. Before this
> regulation change went into effect, the banks
> complained exactly about your
> point--that they couldn't do it accurately. They
> lost that argument because
> regulators felt an attempt at market valuation was
> more accurate than historic
> value.
>
> Similarly, a commercial firm may be looking to sell
> an asset --through a
> sale, spin off or ipo and will mark the value of
> that asset on what it thinks the
> market will bear, not its historic value.
>
> Matt Greco
>
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