Wall Street’s Dishonest Accounting

November 14, 2023

by James Rickards Daily Reckoning

This article is not a lesson on banking (I don’t want to put you to sleep!).

But it’s important to understand some basic banking rules in order to realize why the current banking crisis, which began in March, isn’t over.

Let’s start with what’s called mark-to-market accounting. It’s critical when it comes to determining asset prices and stock prices in particular.

The concept of mark-to-market accounting is fairly simple. Every bank or company has a balance sheet. On one side are assets — cash, stock, inventory, accounts receivable, real estate and a lot more.