Karl Denninger today rants about Merrill Lynch's recent declaration on their earnings call that they had evaluated some of their securities at $11 Billion. And today they're declaring the value to be $6.7 Billion.
The consequences of these types of action are further market erosion as confidence is blown away. To have misstated value to this amount is incredible. The markets are already facing a confidence crisis with the federal government doing everything to the point of offering government guarantees and loans to keep these companies afloat.
Making misleading statements like this violate SEC regulations. The problem is regulators have been effectively missing in action these last few years, which has lead us, at least partially into this economic mess in the first place.
The question now is will things like this continue to go unchecked? Or will regulators step in and deal with these issues so we can save some small bit of market confidence?
Further Reading:New York Times
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