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What does the last sentence mean? Buffett noted that loose lending has run amuck. He cited with particular interest how some lenders are counting as income interest accrued but not paid.
Nov 6, 2018 5:20 AM
Answers · 4
He cited with particular interest how some lenders are counting as income interest accrued but not paid. We have to group the words in the sentence to understand it. He cited with particular interest. [fact.] The fact is "Some lenders are counting as income interest accrued but not paid." To say it another way, some lenders are counting interest (that is accrued but not paid) as income. If we say "We are counting as (noun) (other noun)" it means something like "We are including other noun in our group of nouns," e.g., "We are counting as Europeans people with Russian citizenship." To the content, it's a risky play because this income hasn't yet been paid and still carries the risk of not being paid, so to count it as income is a bit premature and can inflate income totals and thus things like financial leverage/lending power. Hope this helps.
November 6, 2018
People who lend money are counting interest as income even when it has not yet been paid. Interest is like the fee you pay to borrow money. It's usually calculated as a percentage of the loan and paid back monthly. For example, "I borrowed $100,000 at 4% interest."
November 6, 2018
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Seven
Language Skills
Chinese (Mandarin), English
Learning Language
English