H/t Mike Kimel Via Economist’s View This is from Jialan Wang: Benford’s Law and the Decreasing Reliability of Accounting Data for US Firms, by Jialan Wang: …[T]here are more numbers in the universe that begin with the digit 1 than 2, or 3, or 4, or 5, or 6, or 7, or 8, or 9. […]

Anyone who has ever worked with data knows that making certain the information is “clean” is much more important than what you do with it. Brilliant analysis of inaccurate data may make heroes (Chamley, Prescott, etc.), but it doesn’t make sensible policy. Witness the release of “public” data from the state of Texas. Jeremy once […]

by Linda Beale Derivatives: greater transparency is neededcrossposted with Ataxingmatter The big banks got into considerable trouble doing derivatives trades–especially the credit default swaps where AIG was the major counterparty and the taxpayers ended up bailing out the Big Banks like Goldman Sachs. So surely one of the results of “financial reform” in the wake […]

by Linda Beale Banks, repos and transparency in accounting A repo transaction is essentially a collateralized financing. For tax purposes, everybody knows that it will be treated as a loan, no matter that it is called a “sale” with an agreement for a repurchase later. For accounting purposes, though, some repo transactions have been able […]