Accentuating the caveat emptor perspective with critical commentary on financial disclosure. I adopt a skeptical persona and look for chinks in the teflon coating of financial disclosure. My job is to identify financial warts. Perhaps a Black Swan. Disclosure: I do not hold positions in stocks mentioned for three trading days before or after blog post.
Wednesday, February 22, 2006
Bank of America (NYSE:BAC) hedge restatement
Bank of America will restate earnings to comply with evolving interpretations of SFAS 133 according to Alvaro de Molina the CFO. Primarily the restatement is driven by hedge transactions. When a large organization like Bank of America restates earnings this way perhaps there is too much hedging on the books and not enough basic business. You know the old fashion spread business. Take in cheap deposits and lend out on loans. Pay for staff and expenses and the rest goes to shareholder.