U.S. Banks Bigger Than GDP as Accounting Rift Masks Risk [Bloomberg]
Warning: Banks in the U.S. are bigger than they appear. That label, like a similar one on automobile side-view mirrors, might be required of the four largest U.S. lenders if Thomas Hoenig, vice chairman of the Federal Deposit Insurance Corp., has his way. Applying stricter accounting standards for derivatives and off-balance-sheet assets would make the banks twice as big as they say they are — or about the size of the U.S. economy — according to data compiled by Bloomberg. “Derivatives, like loans, carry risk,” Hoenig said in an interview. “To recognize those bets on the balance sheet would give a better picture of the risk exposures that are there.”
£568,000, down from £682,000 a year earlier.
Muddy Waters Secret China Weapon Is on SEC Website [Bloomberg]
Carson Block, the 36-year-old short-seller who heads Muddy Waters, said he’s an avid reader of letters from the SEC’s corporation-finance experts to executives about the adequacy of disclosures in regulatory filings. “The CorpFin accountants do a good job of spotting issues in the companies’ filings,” said Block, co-author of “Doing Business in China for Dummies.” “We’ve read some astute questions from CorpFin on a range of issues.”
Novelist Patricia Cornwell Wins $50.9M Judgment against Accounting Firm [AT]
Anchin, Block & Anchin had 52 partners as of AT's most recent ranking based on revenue, so this judgment would that work out to just a shade under $1 million per partner. Ouch.
Fire fail [Tax Update]
In Joe Kristan's roundup today we learn what happens when the dog eats your homework, so to speak, in tax court.
Office Depot to Buy OfficeMax [WSJ]
Office Depot Inc. said Wednesday it agreed to buy OfficeMax Inc. in an all-stock deal that values the rival office-supplies retailer at roughly $1.19 billion, as both companies try to fight off tougher competition from Staples Inc. and Amazon.com Inc. Office Depot said it will issue 2.69 new shares—valuing OfficeMax at $13.50 a share based on Tuesday's close—for each OfficeMax share outstanding. The stock-swap value is a 3.8% premium to Tuesday's close.
Postal Service to launch clothing line in 2014 [Yahoo]
The cash-strapped Postal Service announced Tuesday that it has inked a licensing deal with an Ohio-based clothing company to produce a line of apparel dubbed “Rain Heat & Snow.” The attire aims to reach well beyond T-shirts and baseball caps to include “wearable electronics”—like jackets with iPod controls built into the sleeve, USPS spokesman Roy Betts explained to Yahoo News. “If you like your iPod, you can plug it right into your jacket, regulate the volume and make your selections right on your sleeve,” Betts said in a phone interview. There will also be shirts that help wick off sweat, he said.