Marketplace®

Daily business news and economic stories

The Cockroach Theory of Finance At Work

Banks are 'fessing up. Here's Bank of America chief executive officer Ken Lewis: "A number of participants–including Bank of America–have…

Banks are ‘fessing up. Here’s Bank of America chief executive officer Ken Lewis: “A number of participants–including Bank of America–have forecast sizeable writedowns, particularly in Collateralised Debt Obligations (CDOs). Based on conditions today, we expect those writedowns to be larger than have already been reported–although obviously we won’t know our final numbers until we close the fourth quarter.”

Remember last quarter when banks and Wall Street firms announced major write-offs, but tried to put a glossy spin on the news? They suggested that they had pursued the “kitchen sink” approach toward earnings–get all the bad news out at once.

But that wasn’t the case. Instead, a much better metaphor is the the cockroach theory of finance. There’s no such thing as one cockroach. And like cockroaches, bad financial news tends to scurry out over time.

Stay tuned.

Latest Episodes

View All Shows
  • Make Me Smart
    8 hours ago
    25:50
  • Marketplace
    8 hours ago
    26:21
  • How We Survive
    11 hours ago
    25:04
  • This Is Uncomfortable
    14 hours ago
    26:12
  • Marketplace Morning Report
    16 hours ago
    7:01
  • Marketplace Tech
    20 hours ago
    10:55
  • Million Bazillion
    2 days ago
    7:35
  • Financially Inclined
    3 months ago
    12:30
  • The Uncertain Hour
    4 months ago
    22:50
  • Corner Office from Marketplace
    5 years ago
    20:58