Tuesday, July 15, 2008

They Obviously Aren't Finance People at ABC News

ABC News is reporting on the Texas Ratio list compiled by Research Associates of America. The only problem is they have the definition of the Texas ratio totally botched. They have:

The lists use versions of the so-called "Texas ratio" which compare a bank's assets and reserves to its non-performing loans, based on financial data made public by the FDIC in March.

It's "tangible net capital", not "assets", assets are always a much, much bigger number than tangible net capital.

It's almost like weighing your clothes, and weighing yourself with your clothes, and thinking the two numbers are the same.

Maybe they should stick to reporting about Madonna and her brother.

Matt Drudge is also a bit weak when it comes to finance. He's got a headline: "SEC to curb short sales.." In relation to Christopher Cox's minute changes in naked short selling rules. It is nowhere near a curb on short sales.

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