The best worst is yet to be ?

I read this post over lunch (HT: PK). It takes a bit of attention to follow the explanations but the implications are depressing.

Long story short, among five of the biggest banks in the world, they’ve declared almost $18bn of profit which will never be recognized.

To be more specific, even though Citigroup have declared a 1.6bn profit AFTER having 45bn pumped into them by the US Govt, 2.5bn of that profit is wishful thinking which will never materialize.

Take that out of the equation, and Citigroup would’ve been hit with a 0.9bn loss. However, the ‘good news’ that Citigroup have booked a profit has sent their stock price up and driven calls that the ‘market has bottomed’ and the bad news is over.

I suspect not.

As long as we’ve got very clever people ‘gaming’ the financial systems and accounting rules, the ‘true’ bottom isn’t yet on the horizon. Which is where my thoughts converged in a flash of recognition.

Smart people & financial heavyweights in Singapore tended to be raised as a pedigree from one particular institution.. "no wonder lahh.."

;)

(P.S. If you still haven’t figured it out, it starts with an ‘A’, ends with an ‘S’ and has a ‘C’ in the middle.)
(P.S.S. "S.A. Ka ma ma" :D)