As predictable as the sunrise:
About 40 percent of earnings for the first nine months came from money taken from loss reserves as U.S. banks dip into their funds, at least temporarily, and mask a revenue squeeze.
“Don’t pay attention to the bottom line EPS numbers,” said Chris Kotowski, managing director of research at Oppenheimer & Co. in New York. “Reserve accounting distorts what’s reported as earnings. . . . .”
That’s funny. Back during the credit crunch, when the FASB’s crazy, pro-cyclical reserve-accounting rules helped devastate bank earnings, I don’t remember anybody saying, “Don’t pay attention to the bottom line EPS numbers. Reserve accounting distorts what’s reported as earnings” when companies reported their numbers. I remember people freaking out. . . . And yet now that those ridiculously high reserve additions are set to be undone, we’re supposed to ignore the reversals? Please. . . .