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Just like you never want to hear a doctor say "oops" in the operating room, you never want to see a going-concern statement
in a financial report about a company you own. Accountants throw these in when they've been over the books, talked to customers,
and checked the horoscopes and have concluded there is "substantial doubt" about a company's ability to remain in business.
In short, don't blame the accountants if the company files for bankruptcy protection.
You¿d reckon that a going-concern
statement would be enough to send investors running to the exits, but it's not. True, many large institutions automatically
bail when an existing company gets slapped with one of these, but many individuals (often wrongly) take a chance they know
more than the bean counters.
During the tech boom of the late 1990s, many companies actually went public even though they had been hit with going-concern statements. Many of those companies subsequently disappeared. Enough said.
Home / Markets
Tuesday, October 07, 2008
Financial Crisis is Alive and Well
Neil Cavuto, Managing Editor and Anchor
FOXBusiness
Missed tonight's Cavuto? Catch "The Deal" right here on FOXBusiness.com
We now know a month ago, Fed officials were worried...Lehman Brothers was collapsing...American International Group only hours away from being rescued.
It's in the minutes.
Today, it was in Ben Bernanke's very words.
The Fed Chairman warning that the financial crisis he and his colleagues fretted over four weeks ago, is alive and well and dragging down the economy today.
And get this: It's likely to keep dragging things down for a while.
No wonder stocks sold off.
Down more than a thousand points since the bailout passed.
No magic bullet. No uplifting words. No promising talk of any sort for markets desperately looking for it.
From Ben Bernanke, none of it.
But a hint of something he could be cooking up to address it.
A rate cut.
Another rate cut. And maybe a big one.
And maybe soon.
Bernanke didn't say that. He only stated that we, and I quote, "need to consider" that.
The markets quickly assumed the closely watched overnight bank lending rate known as Fed Funds and holding at 2% will soon be going lower than 2%.
And maybe, a lot lower.
The question is at this stage, whether it will do a lot of good.
After all, 2% doesn't leave you a lot of wiggle room.
Which is why a lot of folks are doing a lot of wiggling in a lot of rooms.
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