Tuesday, October 6, 2009

Dont trust the balance sheets

The FDIC, a branch of the US government responsible for the soundness of the banking industry has been doing internal tests of banks to test their stablility. This past quarter 416 lenders made the list for failing the FDIC's stability test, a 15 year high. Many of these lenders have superb financial statements. Which leads me to my point. Their are millions of ways to make a financial statement look sound when in fact the lender or business is not.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aHU4bso2L2aE

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