American - Author | January 6, 1973 -
Normally, banks record profits on loans only as they are repaid, whether they securitize the loans or hold them on their books.
Alex Berenson
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Most companies can survive even if their debt ratings are lowered below investment grade, although they will have higher borrowing costs.
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Publicly traded United States companies report sales and profits to investors every quarter.
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Investors have been too willing to buy stocks with strong reported earnings, even if they do not understand how the earnings are produced.
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Every public company depends to some extent on the trust of its investors.
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Some companies use off-balance-sheet partnerships to raise money or to buy assets without ever telling their shareholders in their financial statements.
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The credit quality of junk bonds varies widely.
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For investors who do want to speculate in high-yield bonds, one alternative may be a junk bond mutual fund, which can offer investors the relative safety of diversification.
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Most unfortunately, Enron's plunge into bankruptcy court also cost many of its rank-and-file employees their savings.
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Determining how many asbestos suits have been filed or how much companies have spent to resolve them is difficult. Cases are filed in state and federal courts, and many companies do not disclose their spending on settlements.
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As a public servant, William H. Webster has an impeccable resume.
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Predicting the market is always tough.
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