Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: Defrocked who wrote (12397)	12/26/1997 8:56:00 PM
From: Zeev Hed	Respond to of 18056

Defrocked, I posted my remark within hours that the news piece appeared on Yahoo's news, it could be that my farmer mentality misinterpreted the news, but YAHOO does not keep these current, so I do not know how to retrieve it. I'll try searching Alta Vista and come back. Zeev

To: Defrocked who wrote (12397)	12/26/1997 9:12:00 PM
From: Zeev Hed	Read Replies (3) \| Respond to of 18056

Defrocked, I hope this is the right place, I copied the juicy part. It is actually worse than I first grasped in my trivial mind. The banks will be able to carry stock at what they bought it rather than mark to book (which I am not sure what that means in this case, but I presume is what we call "mark to Market?) biz.yahoo.com Measures announced on Wednesday, including revisions of accepted accounting practices and using as much as 13 trillion yen ($100 billion) to boost bank capital by buying preferred shares or subordinated bonds, left the raters unimpressed. The tinkering with accounting practices, which will allow banks to choose between current accounting methods and mark-to-book practices, drew particular scorn from raters, who said the change will only obscure problems at the banks. Currently, banks must post appraisal losses if the market value of shares they own falls below the book value. The package will give them the option of valuing their shares at what they paid for them, obliterating any officially recognised losses on their portfolios. ''The change in accounting standards will make less transparent to the public the real financial situation at banks,'' said an official at Fitch IBCA. I hope that helps. The point was that by accounting finanigans they are trying to remove the all important 14,000 Nikkei level. I wonder if they will let a Bank "mark to Book" the winning stocks and carry at "what they paid for" their losing positions. This will be the epitomy of "creative accounting", As Sumitomo, I could carry on my book some good old Anaconda Shares ( I never bought them but I am sure Sumitomo Bank has a bunch since they used to buy whatever stock was in Copper (VBG)). Zeev

To: Defrocked who wrote (12397)	12/26/1997 10:26:00 PM
From: Cynic 2005	Read Replies (1) \| Respond to of 18056

Def, <<RE: "In the last week BOJ allowed valuation based on the book value of the companies in which the banks and financial institutions are invested, and that is what I referred to in my post.">> I also read a Reuters news story regarding this. It came out in the last two days. In fact I thought that could be one of the resons why Japan tanked more than 400 yesterday. Check out reuters.com to dig the news out. Unfortunately, now I don't have time to dig though the bunch. Good luck! -Mohan

To: Defrocked who wrote (12397)	12/26/1997 11:03:00 PM
From: Investor2	Read Replies (1) \| Respond to of 18056

RE: "In the last week BOJ allowed valuation based on the book value of the companies in which the banks and financial institutions are invested, ..." I am well aware of the corporate financial "games" that can be played in determining the book value, especially the value of plant, equipment, ongoing research, etc. I've been asked to partake in said "game" on numerous occasions as part of my corporate function. (The games are common in the USA, too.) Notwithstanding the above, current market valuations are typically several times book value; i.e., price-to-book value is often well above 1.0. I would guess that this is also true in Japan. So, if the stockholder has the choice of valueing the holdings at book or market, isn't it likely that market will be higher? Best wishes, I2