You seem to assume that the publicly available financial statements honestly reflect reality. Any rational review of the past statements from such corporations such as GM, Enron and half of the Fortune 500 should expose the lie in this belief for even yourself.
Again again, your lack of accounting knowledge shows. Enron didn't lie. GM definitely didn't lie. Half the Fortune 500 companies don't lie.
I didn't say that they lied. Don't try and put words in my mouth. I said that their financial statements don't reflect the reality. A lie implies the intent to deceive, which I don't believe that most corporate auditors participate in. They simply don't know all the details themselves, because those individuals within the corporation that oversee those datasets have many incentives (personal, professional and political) to not share them. The financial statements often don't reflect reality, in part, because you
believe that you can interpret them. But you can't, and neither can I. No one really can, outside of the insiders who helped to create them. They exist to blow sunshine up the skirts of regulators and mutual fund managers alike, and they work very well at this. The only detail of any value that I've ever been able to grok from any of those statements is, whenever those things are
all sunshine and happiness, it's often because the dark clouds are so dark that even the insiders don't have a viable avoidance stragedy and are afraid to put it into ink for fear of making it too real. I exited from a strong position in GE common stock, based mostly on the overly optimistic annual report, the Thursday prior to a rumor about the sale of GE core manufacturing plants (such as Louisville Appliance Park) sent the stock price from over $30 to $12 over the following several weeks around May of 2008. That one annual report saved me quite a tidy sum. It's what those financial statements
don't say that is the most valuable.
Enron used created accounting that isn't allowed anymore.
They also used creative accounting that most certainly still is allowed. Encouraged, in fact. Feel free to search for the term, "Marked to market accounting" and compare that to what is actually allowed.
It wasn't lies, it just took an intelligent person knowing what they're looking for to find out what condition the company was actually in. Everyone was too busy being greedy and getting rich off the stock that no one gave enough of a shit to give the financials any more than a quick glance - not at all unlike the Madoff scheme.
That is exactly the point. Enron was an extreme example of the practice, but they did it because they were a company in decline, and they
knew it. What they did, whether it's 'legal' or not, is still standard practice with regard to public reports. The companies that are doing well, have no incentive to resort to such actions; but because some reports cannot be trusted at face value, the rational investor cannot trust
any such reports at face value. If, for no other reason, he is not an insider and cannot possiblely know when a viable company has crossed the rubicon headed for ultimate failure.
GM didn't lie, they just sucked. Everyone knew and acknowledged they sucked except the management, which is why they went down the shitter. There was no false financial statements involved.
Get your facts straight before attempting to BS.
Get your's straight before calling someone else a liar. Don't forget who you are talking to, either. You continue to express your "opinions", about my character and my viewpoints, by my own leave. I will only suffer such abuse for so long before you cease to have a vioce at all.
Those facilities can, and generally are, provided by the oil companies as part of the futures contracts. Thus oil and steel can be bought and sold as easily as corporate bonds, and thus are liquid assets. I can buy a futures contract for vastly more oil than I can actually do anything with, with a built in delivery date three months out, and sell it to a refinery (or anyone else) two days before delivery confirmation.
Holding futures contracts with absolutely no intent of taking delivery != holding physical oil. That type of activity is used for hedging and doesn't have a goddamn thing to do with what you were talking about. Keep trying to rationalize it though, if you travel down enough irrelevant roads you might be able to salavage your grossly incorrect original statement.
Hedging is one rationalle, not the only rationalle. That said, just what do you think that buying bonds are intenteded to do for a company, if not to hedge against inflation of the fiat currency? That's also what gold is good for, btw.
As noted above, yes they are liquid enough to be considered as part of the 'cash reserve' figure in a summary financial statement, if the trading of such commodities is not a fundamental part of the corporation's core business model.
See above. Contracts for the purpose of hedging are not physical assets. Physical assets are not liquid.
Who do you think that you are arguing here? Logically correct, but still irrelevant to the topic. Try and focus.
This seems like a great place for a quote from a recent Wiskey & Gunpowder article (commodities traders, Wiskey & Gunpowder, get it?)
"Oh dear. The gold price in dollars is volatile because the US dollar is volatile. An ounce of gold has almost always bought you a nice suit at any time in history.
Good thing I bought a suit last month, because their prices have shot up over $300 since then.
The gold/suit example is the most ridiculous, not to mention untrue, (and most often used by the gold bugs) of all. I didn't realize that suits were the best (or even a good) reference for comparative value. Someone tell the Fed to stop using a large basket of goods to calculate CPI and just use the average price of a suit.
Of course you would focus on the bit about the suit, and ignore the point completely. I'll give you the benefit of the doubt, and assume that you simply didn't understand the point.
Gold isn't an investment. Gold is money. If you are buying gold, silver or even oil futures as a speculative investment, you are as likely as not to lose capital. If you are seeking an alternative currency to the default, gold is (historicly and generally) the best choice for capital preservation. I.e.
hedging against currency risks. Most people would simply call this "saving".
