"Accounting rules that allow companies to profit when their own creditworthiness declines. The rules reflect the possibility that a company could buy back its own liabilities at a discount, which under traditional accounting methods would result in a profit...."
I'll bet you I know who pays in the end, taxpayers.
"Goldman Sachs raises $5b to repay rescue" by Bloomberg News | April 15, 2009
NEW YORK - Goldman Sachs Group, buoyed by better-than-expected earnings, raised $5 billion to help repay $10 billion in government rescue funds. Its stock fell 12 percent on concern the profit isn't sustainable....
Chief executive Lloyd Blankfein, 54, wants to refund money received from the US Treasury to run the bank without any limits on compensation.
Related: The Gall of Goldman Sachs
Even after repaying funds to the Troubled Asset Relief Program, Goldman intends to take advantage of government help by continuing to sell low-interest debt backed by the Federal Deposit Insurance Corp., chief financial officer David Viniar said on a conference call....
So the TAXPAYER is backing up GOLDMAN'S DEBT?
"JPMorgan Chase posts earnings of $2.14b" by Associated Press | April 17, 2009
NEW YORK - JPMorgan Chase & Co.'s first-quarter profit wasn't as good as last year's, but it told investors what they wanted to hear: Banking is not dead.
JPMorgan became the third big bank in a week to release upbeat earnings news, reporting yesterday that it earned $2.14 billion for the January-March period, thanks to both strong trading activity and banking to consumers. The company's performance added to the evidence that the financial industry is starting to recover from the losses caused by the credit crisis and the recession, even as banks still contend with rising loan defaults.
They finally told us we were in recession after hiding it for nine months, and now they say we are coming out of it? Pfffffttt!!!
The bank's chief executive also said that it could pay back its $25 billion in government funding immediately, and that it has no intention of using the government's Public-Private Investment Program to sell so-called "toxic assets" such as mortgage-backed securities. "Folks, it's become a scarlet letter," CEO Jamie Dimon said of government funding.
Banks that have accepted federal bailout funds are now subject to greater government scrutiny and limits on how much they pay their top executives. JPMorgan said it's benefiting from growth in deposits, a rise in mortgage refinancings, and low interest rates that allow it to borrow cheaply and then charge customers more for loans.
Oh, so GOUGING YOU is why they are doing well.
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"Citigroup profits exceed estimates; Troubled bank breaks 5-quarter losing streak" by Bradley Keoun, Bloomberg News | April 18, 2009
NEW YORK - Citigroup Inc., which was rescued with $45 billion in taxpayer funds, ended a five-quarter losing streak with a $1.6 billion profit on trading gains and an accounting benefit for companies in distress....
Citigroup benefited from higher fixed-income trading revenue that also bolstered earnings at Goldman Sachs Group Inc. and JPMorgan Chase & Co.... Citigroup posted a $2.5 billion gain from accounting rules that allow companies to profit when their own creditworthiness declines.
So S**ti Group actually LOST about a BILLION, huh?
The rules reflect the possibility that a company could buy back its own liabilities at a discount, which under traditional accounting methods would result in a profit. Citigroup already is benefiting from the Financial Accounting Standards Board's decision earlier this month to ease rules that forced banks to write down assets whose market value had been depressed so long their impairment was no longer considered temporary.
