Here's Why I Don't Trust the Official Numbers

Trust this?

A case in point is the Evergreen Ultra Short Fund, which just closed this
week... Just recently one of the fund mangers was offered a bond, which is
a matching position to current holdings at a price of 23, that is 23 cents on
the dollar. Great value yet the fund manager was in a pickle and decided
against purchasing the bond at such a cheap price. Why? As the fund
manager said it would create an issue with his mark on the bond that was
currently being carried at a dollar price over 95, or 95 cents on the dollar,
yet at that point he knew what his bond was worth, yet choose not to challenge the pricing service and its assigned value. The bond ended up trading that was offered to the Ultra Short fund manager to another account at a price of 9. The buyer was Tattersall, another subsidiary of Evergreen, yet the bond at Ultra Short was not remarked to the downside.

Special thanks to Reggie Middleton's BoomBustBlog for this one! It's a little hard to understand, but I think this is what he means. The fund manager is holding a bond carried on the books at 95. But it's not really worth 95, as a trader calls and tries to sell him a the same bond, but at 23. The fund manager says, "that's a great deal, but no thanks. If I buy it, I'll have to mark my other bond down from 95 to 23."

Bloomberg reports:

Evergreen Investments, the money- management unit of Wachovia Corp., plans to liquidate a $403 million fund with almost three quarters of its assets in mortgage-backed securities after it fell 18 percent this month.

Trust this? No, thank you.