accounting

The problem of not understanding fraud mechanisms is most intense among economists, who typically do not study fraud, do not understand fraud mechanisms, and have a tribal taboo against even writing or speaking the word “fraud.”

Editor's note: The following press release was issued by the FDIC last week regarding bank accounting gains in the quarter through 31 March.

One of the most contentious topics in America is the impact of the Federal Reserve’s policy of “Quantitative Easing” – otherwise known as ‘QE’. The Federal Reserve has committed to spending $85 billion every month buying a wide range of…

ECB President Draghi suggested last week that the central bank was taking a fresh look at the deposit rate. There does not appear to be any economist that thinks it is a good idea. The reasons vary, but the two main reasons are that it…

Regarding Cyprus, recently I heard someone claim that depositors are not creditors of a bank despite the fact that deposits are bank liabilities. This is bollocks. Depositors are indeed creditors, particularly in Europe where they are…

Many of the largest technology companies are making so much money that they are rapidly accumulating cash on their balance sheets. While on could argue that this cash should be stripped off the balance sheet for valuation purposes, I would…

On Christmas Eve, the Wall Street Journal had two interesting articles on the credit situation in the U.S., one from the banks' perspective and one from the households' perspective. In general, the data were positive but I believe the…

Below are a number of articles I feel are worth reading on the Hewlett Packard acquisition of Autonomy and the accounting scandal associated with writedowns from that acquisition. I want to briefly analyse the fallout from this episode from…

As I wrote yesterday, government deficits are the biggest driver of elevated corporate margins. This is significant in the US given the looming fiscal cliff and the already ongoing margin mean reversion. Using the financial sectoral…

I think it goes without saying for those of you who have been using the sectoral balances approach, government deficits are what have been driving corporate profits in the U.S. to record levels. Most analysts and news outlets focus on the…