Hello again, View fans. Here are your afternoon links.
It sure helps. I love this research paper, called "Playing Favorites: How Firms Prevent the Revelation of Bad News." The first link takes you to the paper, written by professors from Harvard Business School and London School of Economics. The second link is to a story today on CFO magazine's website, which summarizes it nicely: "Companies that `choreograph' earnings calls by only taking questions from bullish analysts are usually hiding negative information and tend to underperform during future quarters." It's all part of the game.
Mark Cuban tells jurors the truth about funny numbers
The U.S. government may be in shutdown mode, but the federal trial of Mark Cuban on insider-trading claims must go on. He testified today and "frequently glanced at the jurors as he jousted with a government attorney and opined on a range of matters, including accounting, blogging and basketball," according to the Wall Street Journal. The Dallas Mavericks owner knows his accounting, too. Here's how he described "Ebitda," which stands for earnings before interest, taxes, depreciation and amortization: "It's a term companies use when they want to make it seem like they're doing better than they are."
This is how bad a default on Treasury securities could be
The Treasury Department released a report titled "The Potential Macroeconomic Effect of Debt Ceiling Brinksmanship," which said a default could result in "a financial crisis and recession that could echo the events of 2008 or worse." Dogs and cats living together, mass hysteria, etc.
Gillian Tett on the risk to banks of rising interest rates
From her column in the Financial Times: "The Fed appears locked into providing more quantitative easing, the UK and BoJ have pledged to keep rates low, and this week the European Central Bank echoed this line. But, if nothing else, this week’s events in Washington are a timely reminder that the political economy is not always controlled by rational policy makers. Sometimes the unexpected can unfold, and not just with credit risk (as in the case of Lehman) but with interest rates too – doubly so when the markets are acting as if there is no risk at all." Yep.
You know a Republican lawmaker has flown the coop when Grover Norquist says so
"He pushed House Republicans into traffic and wandered away," said Norquist, the president of Americans for Tax Reform told Ezra Klein. He was speaking of Ted Cruz, the Republican U.S. senator from Texas.
(Jonathan Weil is a Bloomberg View columnist. Follow him on Twitter.)