Wall Street gets ready to PLAY-BOY

A 700 point crash...ouch. market to go below 10K ......ooof......no increments this year...oooi maa/biwi/GF, a quarter close admist dusshera and diwali.........arre mat yaad dilao yaar, then what about financial analysts on PLAYBOY ...oomph bring it on

Well when the chips are down, sex is the best thing to cheer you up. Playboy the adult entertainment magazine, might just get your spirits UP.

The adult entertainment magazine, famous for its photo spreads of nude women is launching a search for models to pose for its upcoming feature, "Women of Wall Street" for its Feb 2009 edition.

Playboy has in the past published editions with themes such as Women of Enron and Women of Worldcom, now comes up with this idea "Women of Wall Street" to cheer up moods in a dull and sombre market. "When the news gets bad, then maybe that's a chance to make people smile by coming up with something that puts a different twist on it," said Gary Cole, Playboy's photo editor.

To be eligible for the shoot, the model (female) must be 18 years of age and must have worked in a financial institution. Well wonder what accountants will have to comment on the true fair value of the fairer sex .... i mean the financial statements as per FAS 157.

So coming Feb 09,  for starters; quit looking at ICICIdirect.com (by popular vote) you aint gonna get richer, stop reading financial news portals....... just oogle by visiting playboy.com to get real hot Wall Street action. I bet even your boss may put in his shirt.

FORGET THE BULLS AND THE BEARS, ITS THE REIGN OF THE BUNNY.

P.S - Disclaimer -  this article is meant only for readers over 18........ I do not hold any playboy.com stocks (hmm not a bad company to invest in - what do you say) and neither do i have any affiliations with LAY-MAN (lehman)

GE serves warrants for Buffet

General Electric received a helping hand in the wake of US's "credit crisis" from the BANK BUFFET. A lot of valuers and investors around the world have been speculating to know the true valuations of GE, with its opaque mix of finance and manufacturing. Well the BANK OF BUFFET just figured it out.

GE issued warrants of preferred stock worth $3 BN @ $22.25 per share, $2 below its last traded price and almost half its stock price at the beginning of the year.

GE who, wants to hold on to its AAA rating, also offered to issue another $12BN in form of common stock to other investors.

Many analysts felt Buffet's move is a show of returning the favour to the US, by giving a helping hand and bringing back confidence in resurrecting the US economy. Buffet who last week invested $5BN in Goldman Sachs, has now contributed personally close to 1% of money equivalent of the massive $700BN bailout package.

The soothsayer from Ohama did play it tough in striking the deal, with the interest rate on the stock pegged at 10%, a shade lower than GE's cost of equity, which is pegged to be in the range of 12% to 14%, and much higher than GE's average cost of debt @5.5%.

Many investment bankers felt that, this move would further disturb the sentiments of the economy, as they expected the big giant "GE" to give a helping hand to the US economy.

While GE boasts some $846 billion in assets, close to $600 billion of that is on the finance side--either in the form of loans or leased assets like airplanes. There's also $100 billion in intangibles and goodwill, leaving less than $200 billion in hard assets like buildings, equipment and inventory. It has about $90 billion in commercial paper, which is short-term, low-cost borrowing made for as little as one month. Commercial paper costs have risen for G.E., as it has for others, though it has been tapping that market throughout the crisis

Warren believes he may have bought GE's stock at rock bottom & believes the US economy have hit the bottom. If he is right then the US conglomerate will recover, will sell and lease more planes, automotive and finance them.

If he is wrong, then GE will be forced to borrow more or sell its stock much cheaper. Hoping Brand Buffet's gamble pays off this time.

FAS 157 fair value - NEO gets Mr. Smith in Part 1

Just a couple of days back, i had commented on the SEC's move to change fair value accounting. This move was short changed with the bailout package being rejected.

Well on numbers, this is what fair value accounting has done so far since its inception in Dec 07.

Citibank announced a further $15-21BN write down for estimated Q3 on its distressed assets.

Morgan stanley wrote down $3BN in its Q3 earnings (not so bad as many expected $6BN)

Bank analysts predicted total write downs in excess of $64B on collateralised debt obligations from all investment banks.

Now with the bailout package being approved, heres what the SEC has proposed for Q3 reportings, which could just about reverse some of the write downs and infuse life into the financial statements

• Mark to Marking of assets and liabilities in inactive markets can now be done on the aandy dandy mathematical models instead marking them on the exit prices or fire prices in illiquid markets - which means auditors and accountants go back to reading more of CON 7

• SEC has allowed managements to use their internal assumptions in fair value accounting while maintaing the hieracy of using fair value techniques.

The crux of the SEC statement is primarily aimed at ensuring distressed assets are not marked to market in inactive markets at throwaway prices.  The concept of a fair value measurement assumes an orderly transaction between market participants. An orderly transaction is one that involves market participants that are willing to transact and allows for adequate exposure to the market. Distressed or forced liquidation sales are not orderly transactions, and thus the fact that a transaction is distressed or forced should be considered when weighing the available evidence. 

To make matters interesting, the US BIG ACCOUNTING FIRMS, which all along were silent on the rejection of the $700BN bailout package, were opposing congress efforts and were gearing to lobby to scrap the changes in the mark to market rules.