Millions of Americans voted for ‘change’. Instead, we get ‘stagnation.’ This is due to the absolute army of still-very ‘wealthy’ lobbyists and donors to both parties, infesting the system. So even the smallest reforms are thrown out the window. And even slight changes in our disastrous foreign policies and expanding warmongering, are defeated before they even appear in public. So we don’t have ‘change’, we have ‘more of the same.’ For example, the mark-to-market rule is being tossed overboard so banking gnomes can set fantasy values on trashy tranches that switched from being assets to debits, two years ago. This is because many of these loans are NON-PERFORMING assets which means, they are losses since no one is paying any interest or principal on them.This news is disgusting, disturbing and stupid! I am furious about it. Obviously, the gnomes will list the value of worthless paper much higher than it really is so that they can lend more phantom money!
Four days after U.S. lawmakers berated Financial Accounting Standards Board Chairman Robert Herz and threatened to take rulemaking out of his hands, FASB proposed an overhaul of fair-value accounting that may improve profits at banks such as Citigroup Inc. by more than 20 percent.
Look at the credentials of Mr. Herz:
- Prior to joining the FASB, Mr. Herz was PricewaterhouseCoopers North America Theater Leader of Professional, Technical, Risk & Quality and a member of the firm’s Global and U.S. Boards. He also served as a part-time member of the International Accounting Standards Board. Mr. Herz is both a certified public accountant and a chartered accountant.
- Mr. Herz joined Price Waterhouse in 1974 upon graduating from the University of Manchester in England with a B.A. degree in economics. He later joined Coopers & Lybrand becoming its senior technical partner in 1996 and assumed a similar position with the merged firm of PricewaterhouseCoopers in 1998.
He is an accountant. This means, he deals with numbers. Accountants don’t do fantasy numbers. They like to balance the books. This is something the gnomes hate to do. They prefer open-ended systems whereby they can simply put in more and more numbers to infinity.
Congress is corrupt. This is why they threatened Mr. Herz when he tried to run a sane and fair system which values things for what they are worth, not what the gnomes wish they would be worth.
For example, in Japan, many zombie banks refused to write off dead loans. We had rules that if a loan’s interest wasn’t paid at all for just 60 days, it is in default and the loan moves from the banker’s ‘asset’ column to the ‘deficit’ column. This is classic bookkeeping that is pretty ancient.
Banking systems that over-lend and cause huge bubbles like the Japanese property bubble of the late 1980′s, go bankrupt if the owners don’t pay off the loans. This happened to us, now. And this is why a central bank has to figure out how to kill bubbles before they grow, not after they are obvious to everyone who rush into this market to speculate.
The changes proposed on March 16 to fair-value, also known as mark-to-market accounting, would allow companies to use “significant judgment” in valuing assets and reduce the amount of writedowns they must take on so-called impaired investments, including mortgage-backed securities. A final vote on the resolutions, which would apply to first-quarter financial statements, is scheduled for April 2.
In other words, our dear zombie banks will be suddenly capitalized by lying bastard gnomes making up values out of thin air. They don’t want real values, they want to simply lie and claim, they are sitting on a nest of golden eggs, not rotten yolks.
FASB’s acquiescence followed lobbying efforts by the U.S. Chamber of Commerce, the American Bankers Association and companies ranging from Bank of New York Mellon Corp., the world’s largest custodian of financial assets, to community lender Brentwood Bank in Pennsylvania. Former regulators and accounting analysts say the new rules would hurt investors who need more transparency, not less, in financial statements.
All the time, people mock me when I talk about China’s meteoritic rise in the finance world. They tell me, China’s banks have problems! China doesn’t have an open system! And so on. But pray tell, who are the ‘investors’ who have money to hand over to the top 5 US financial powers? Aside from Warren Buffett who recently became part of Goldman Sachs?
These investors are people like the Chinese. And US retirement funds. The need to keep up the fiction of growing value when in reality, people are not paying off debts, is key to keeping our empire afloat. We can pretend our investments are growing while handing it all off to a bunch of Madoff clones who are not creating wealth at all. Our legislators want the ILLUSION of wealth!
Officials at Norwalk, Connecticut-based FASB were under “tremendous pressure” and “more or less eviscerated mark-to- market accounting,” said Robert Willens, a former managing director at Lehman Brothers Holdings Inc. who runs his own tax and accounting advisory firm in New York. “I’d say there was a pretty close cause and effect.”
This is yet another illustration how the low taxes on the wealthy has greatly increased the political power these rich tax evaders gained. They don’t want to pay taxes to reduce our government’s overspending. They don’t want rules that help investors see into the black boxes the wizards use to create the illusion of growing wealth. The debt system has so overtaken all systems in America, instead of undoing this mess, we are doubling it every year!
The entire reason these lobbyists want no rules is simple: if they don’t have to give an accurate accounting, they can lie. And when they lie, they can pretend they have capital. This faux capital then is used to create more debt! This is how they flooded all systems with immense amounts of debts in the first place. The ending of the Japanese carry trade and the Bank of International Settlements rules forcing them to accurately price their debt holdings, killed the manic markets that ran from 2003-2007.
If mark-to-market accounting is to blame for the current financial crisis, then the National Weather Service is to blame for Hurricane Katrina; if it hadn’t told us the hurricane hit New Orleans, the city would never have flooded.
Good analogy! The need for crystal clear honesty in banking is paramount to the system’s operations. For it is all about ‘trust’ and you can’t trust liars. And I swear, our top bankers seem to be an army of Pinnochios with noses longer than a mile.
This is the logic the bankers are using, and they are getting sympathetic ears in Congress. The bankers have gotten two members of Congress to introduce a bill to establish a new body that could suspend accounting rules for financial institutions.
We could call this new body, ‘Bad Bank Protection Agency’. The sole operations will be to prevent any laws, rules or regulations to interfere with lying, cheating and stealing.
Edward L. Yingling, the president of the American Bankers Association, says the proposal addresses “systemic risks that accounting standards can have on the economy.”
HAHAHA! Using sane accounting standards that demand accuracy will destroy our economy! And people tell me, I should chew out the Chinese? HAHAHA.
Steve Forbes, the publisher and erstwhile presidential candidate, goes even further. “Mark-to-market accounting is the principal reason why our financial system is in a meltdown,” he wrote in a Wall Street Journal op-ed piece.
Forbes is a classic silver spoon in mouth jerk. Of course, if lying bankers go under because their bottom line proves to be a bottomless pit, this is the fault of the accountants who added up all the numbers. If we could pretend things were worth whatever we wish, will will try to pretend they are quite valuable.
But all things must eventually be sold, to determine value! And we set value based on what similar items sold for in the recent past. This is what the bankers want to evade. They know perfectly well, how this system works. But don’t want it to work. For this would mean, they can’t lend unless they first find some capital. And capital is in very short supply, right now. Funny money, on the other hand, is pouring out of the Federal Reserve at an astonishing rate.
OH MY GOD! Just look at that graph. In 1960, the monetary base was only about $20 billion. It then rose very gradually to $200 billion twenty years later. Then, it shot up to $600 billion in another 20 years. Three times bigger. Then, in just 8 years, it shot up to $800 billion and then took off like a rocket, hitting $1.75 trillion in just three month’s time! That is a more than doubling in the monetary base in just one quarter!
This is INSANE. Look at the grey lines. These are recessions. During none of the previous recessions, did the US Federal Reserve make the monetary base grow more than a few percentage points! This is the clear indication, we have a collapsed system. Not just banking. Not just commerce. We are seeing the dollar DIE.
Notice the difference between currency in circulation versus monetary creation via Fed printing presses!
See how the two are in near total harmony over half a century and then boom! Off it goes…this shows that the money being created is NOT IN CIRCULATION. And god help us, when it does circulate! We have more than doubled the amount of ‘money’ that has the potential of circulating. If this isn’t a harbinger of future hyperinflation, I’ll happily spend my Deutsche Reichsmarks I have from the Weimar Republik.
The lying bastard bankers are holding all of this funny money! And are most anxious to turn it into DEBTS but cannot, so long as they have to be honest about the losses on their books. I swear to god, this is just so infuriating.
And look, the Chinese ARE NOT DOING THIS. They have real wealth. They want to preserve this. If our only way to undo the holdings of China, is to create hyperinflation in America, watch out. Did that fix Germany’s financial problems? And did starting WWII fix Germany’s financial position? History is very clear about the answers.
As usual, I am not very educated in these matters so I like looking up stuff to see if there is something to learn. 99% of the time, I learn something, even if this seems rather tiny in comparison to other people. Oh, look at the FASB! They don’t want their information disseminated.
Copyright Notice for FASB Pronouncements Listed Below
Copyright © by Financial Accounting Standards Board. All rights reserved. Permission is granted to make copies of this work provided that such copies are for personal or intraorganizational use only and are not sold or disseminated and provided further that each copy bears the following credit line: “Copyright © by Financial Accounting Standards Board. All rights reserved. Used by permission.”
This organization is supposed to be protecting us from crooks. But they don’t want their data or their information spread all over the internet, eh? What sort of malarky is this? Why the secrecy? Why not beg us to publish them, to spread the information? Eh? EH???? Good barking grief!
Well, in defiance of this restriction, I am going to give a little bit of what these guys want to say but don’t want broadcast across the planet:
General Descriptions of Exposure Documents
Exposure Drafts—An Exposure Draft is a draft of a proposed Statement or Interpretation for an FASB technical project that proposes standards of financial accounting and reporting, an effective date of application, and a method of transition. An Exposure Draft also includes background information, an explanation of the basis for the Board’s conclusions (including its reasons for accepting certain alternatives and rejecting others), and a summary of the more significant and relevant points of view communicated to the FASB at public roundtable discussions and in written comments and position papers.
Discussion Papers—A Discussion Paper is a discussion document that can be used to solicit input on major issues (or on a subset of issues) addressed in a project. It also can be used to solicit input on a variety of matters, including (a) matters specific to a possible agenda topic and (b) a discussion document, Exposure Draft, or other document issued for public comment by another standard setter. A Discussion Paper that contains the Board’s preliminary views generally is issued in the early stages of the project and focuses on the tentative decisions and any alternative views discussed by the Board in its deliberations of the project.
Proposed FASB Staff Positions (proposed FSPs)—These draft documents are used to solicit comments on proposed narrow and limited revisions to GAAP literature (including Statements, Interpretations, EITF Issues, APB Opinions, and AICPA Statements of Position and Audit Guides) in a more timely and consistent fashion than other draft documents.
EITF Tentative Conclusions (Draft Abstracts)—Prior to reaching a consensus on an EITF Issue, a tentative conclusion must be established and then, based on that tentative conclusion, a draft abstract is issued for public comment. Prior to issuing the draft abstract for public comment, the FASB Board must ratify the tentative conclusion and approve of its exposure for public comment. The Task Force will review comments on a draft abstract at a future EITF meeting to determine whether to approve the tentative conclusion as a consensus.
Statement 133 Implementation Issues—These Q&A style draft documents represent tentative conclusions on implementation questions on FASB Statement 133. Their status is tentative until it is formally cleared by the FASB and incorporated into an FASB staff implementation guide.
The gnomes read this document and they commented on it, too. At top volume, screaming, jumping up and down like monkeys deprived of bananas. Did anyone else see this document? No? HAHAHA. Not for you or I, my friend. We are sidelined, as usual. Here is part of the 133 document:
Information for Respondents
The Board invites individuals and organizations to send written comments on all
matters in this proposed Statement, particularly on the questions listed below.
Respondents need not comment on each issue and are encouraged to comment on
additional matters that they believe should be brought to the Board’s attention. Comments
are requested from those who agree with the provisions of this proposed Statement as well
as from those who do not.
Oh boy! I want to comment! HAHAHA. Yes, they want us to comment, all right. But only if we
behave ourselves. We can’t disseminate this for comment, of course.
Comments are most helpful if they identify the issues or the specific paragraph(s) to
which they relate and clearly explain the reasons for the positions taken. Those who
disagree with provisions of this proposed Statement are asked to describe their suggested
alternatives, supported by specific reasoning. Respondents must submit comments in
writing by May 8, 2009.
The gnomes were most eloquent: they suggested the FASB jump in a lake. And if they didn’t
the FASB would be replaced by a new regulatory group called the BASTARDS. See? This
is Mafia talk for, ‘We will make a suggestion you can’t refuse.’
The Board specifically requests comments on the questions below:
1. AICPA TIS Section 5100, paragraphs 38–76, would be applied prospectively
for revenue arrangements entered into or materially modified in annual periods
beginning on or after December 15, 2009, and interim periods within those
years. Do constituents agree with the transition provisions for nonpublic
entities that had not previously applied this guidance? Please explain your
HAHAHA. That one got the full attention of the Hell Hounds and pirates!
2. Do constituents agree with the Board’s conclusion that this proposed
Statement would not change GAAP except as described in Question 1? If not,
please provide specific examples of the changes caused by this proposed
3. Do constituents agree with the July 1, 2009, effective date for this proposed
Statement? If not, please provide a detailed explanation of the reason(s) for
extending the implementation period…..
The answer to this question was unambiguous: NEVER shall any of these provisions
10-1 The objective of this Topic is to establish the Financial Accounting Standards
Board (FASB) Accounting Standards Codification™ as the single source of authoritative
principles and standards used by nongovernmental entities in the preparation of financial
statements in conformity with U.S. generally accepted accounting principles (GAAP),
except for rules and interpretive releases of the Securities and Exchange Commission
(SEC) under authority of federal securities laws, which are sources of authoritative GAAP
for SEC registrants.
And we wonder why the SEC has been defanged? We see that investors will not be protected at all if the hell hounds, pirates and gnomes all get to set the rules and determine compliance. This naked lunge at preventing any controls or sane bookkeeping was done, in the open, in Congress, at the same time, the US public is in a rising fury over the huge bonus issue. The power of the lobby has not vanished at all, it hasn’t even gone under any rocks. They ignore us.
Speaking of clarity and information, I often go to Markit to look at the graphs that all show these instruments collapsing in value. The losses have been up to over 97%. So I trot off again and see this:
Far from openness, the doors are slamming shut! What next? Bernanke destroyed the M3 data dissemination. Now, Markit is covering up the information so only the ‘right’ people can access it. Eventually, all systems will be blacked out in the name of security. We would imagine, the system would move towards more daylight, not deeper into the Cave of Wealth and Death!
But then, as my series on the Cave of Wealth and Death clearly shows, it is very easy to make magical money in the darkness. And this is what these guys yearn for, above all else: to totally control information so they can make up money at will and thus, create infinite funny money wealth.
Mary Schapiro, sworn in as SEC chairman in January, testified to Congress on March 11 that the agency recommends “more judgment in the application, so that assets are not being written down to fire-sale prices.”
I was aghast when I heard the enabling bitch, Schapiro, was going to head the SEC. She enabled Madoff! How dare she run the SEC?
Goldman Sachs Group Inc. investment strategist Abby Joseph Cohen and Nouriel Roubini, the New York University professor who predicted last year’s economic crisis, made bearish forecasts last week about the outlook for the banking industry. Cohen says banks aren’t yet “in the clear,” and Roubini expects the government to nationalize more lenders as the economy contracts. The 24-member KBW Bank Index rose 21 percent in March, after slumping 75 percent during the prior 12 months.
By letting banks use internal models instead of market prices and allowing them to take into account the cash flow of securities, FASB’s change could boost bank industry earnings by 20 percent, Willens said. Companies weighed down by mortgage- backed securities, such as New York-based Citigroup, could cut their losses by 50 percent to 70 percent, said Richard Dietrich, an accounting professor at Ohio State University in Columbus.
A totally fake 20% hike, of course. If we close our eyes and pretend, we can be or do anything. But harsh reality will still triumph, eventually. The more we do fantasy banking, the more dire and horrible the crash when reality breaks through at last. And the reality is, China plans to take over control of world banking and our goofy irresponsibility simply makes this more likely.
“This could turn net losses into significant net gains,” Dietrich said. “It may well swing the difference as to whether bank earnings are strong this quarter, or flat to negative.”…
Yes, changing a debit into an asset is VERY EASY: just move things from one column to the other.
While helping lenders report higher earnings, FASB’s changes may hurt Treasury Secretary Timothy Geithner’s plan to remove distressed assets from bank balance sheets, Dietrich said. Allowing companies to hold on to assets without writing them down could discourage them from selling the securities, which would work against Treasury’s objective to resuscitate markets, he said.
Zombie banks with ghostly assets: what a great way for the world’s supposedly richest nation on earth to do: fake information justifying fake money values. I don’t see this lasting all that long.
“It’s one of the unintended consequences of having the FASB bow to political pressure,” Dietrich said.
The last sentence puzzles me. What is this garbage about ‘unintended consequences’? Huh? This is VERY INTENTIONAL. And deliberate. Obviously. These guys are certainly addicted to lying. Already, the banking gnomes are going nuts with joy:
Apollo Global Management LLC, the private-equity firm run by Leon Black, and Colony Capital LLC may start funds to participate in the Obama administration’s program to buy distressed mortgage debt from U.S. banks.
They want to ‘buy’ so they can sell–FOR A HUGE PROFIT—to the US government. This is why the whole rescue business STINKS TO HIGH HEAVEN. If we can, in turn tax these profits to the tune of 90% and pay down our own losses, then I might assent.
The firms are among buyout groups that are considering raising as much as $1 billion each to invest in government- backed deals, said people familiar with the matter who asked not to be identified because the discussions are private. Apollo and Colony may reduce their usual fees to lure investors who might otherwise be wary of betting on a recovery in real estate markets, the people said.
Again, the secrecy! They don’t want us to know that the pirates, gnomes and hell hounds who evade taxes and controls, are profiting from this bail out business!
“It’s a business that will be here for a while, and it’s a grind-it-out business,”Thomas Barrack, chairman of Los Angeles-based Colony, said in an interview, referring to distressed investing. “Some of the private-equity groups are equipped for that, and investors will pick and choose.”
Yes, this is grinding salt into gold. A slow process but one that has NO RISKS. Since the US government will buy all the garbage, without any quibbling. The Rothschilds have moved very heavily into the bankruptcy business, family members have spread out across the world, forming bankruptcy groups.
U.S. Treasury Secretary Timothy Geithner, who outlined two public-private investment plans on March 23, is counting on buyout firms and hedge funds to lead as much as $1 trillion in purchases of toxic assets from ailing lenders. Private-equity managers have been looking for new opportunities since the seizure of credit markets in June 2007 all but ended their ability to take companies private in leveraged buyouts.
‘Take companies private’ is pirate talk for dumping immense amounts of debts on businesses and then running them all into the ground, to make them pay off these immense loans that were created by the pirates in the first place! These are looting expeditions and should be terminated and taxed, not enabled. This is why the entire world’s banking AND business have gone off the cliff!
The Geithner Plan, his so-called Public-Private Partnership Investment Program or PPPIP, as we have noted previously is designed not to restore a healthy lending system which would funnel credit to business and consumers. Rather it is yet another intricate scheme to pour even more hundreds of billions directly to the leading banks and Wall Street firms responsible for the current mess in world credit markets without demanding they change their business model. Yet, one might say, won’t this eventually help the problem by getting the banks back to health? Not the way the Obama Administration is proceeding. In defending his plan on US TV recently, Geithner, a protégé of Henry Kissinger who previously was CEO of the New York Federal Reserve Bank, argued that his intent was ‘not to sustain weak banks at the expense of strong.’ Yet this is precisely what the PPPIP does. The weak banks are the five largest banks in the system. The ‘dirty little secret’ which Geithner is going to great degrees to obscure from the public is very simple. There are only at most perhaps five US banks which are the source of the toxic poison that is causing such dislocation in the world financial system. What Geithner is desperately trying to protect is that reality. The heart of the present problem and the reason ordinary loan losses as in prior bank crises are not the problem, is a variety of exotic financial derivatives, most especially so-called Credit Default Swaps.
A must-read. Now, on to some news from the UK, the nation that is going under even faster than the US:
Not that we have much to boast about:
Home prices in 20 U.S. cities fell 19 percent in January from a year earlier, the fastest drop on record, as demand plummeted and foreclosures rose.
The S&P/Case-Shiller index’s decrease was more than forecast and compares with an 18.6 percent decrease in December. The gauge has fallen every month since January 2007, and year- over-year records began in 2001.
A glut of unsold properties may keep prices low, shrinking household wealth and damping spending. Still, sales of new and previously owned homes rose in February, indicating the housing slump, now in its fourth year, may ease as policy efforts to unclog credit and aid borrowers begin to take hold.
“There is still a lot of downward momentum,” said Michelle Meyer, an economist at Barclays Capital Inc. in New York. “We don’t think we’ll see a bottom in home prices until the second half of next year. The decline in home prices will continue to depress household balance sheets.”
Remember: the rise and fall of empires is all about relativity. China is going up and up. The US and UK are going down and down. This is all that matters, in the end. Europe and the US and Japan all have had a series of elections which basically had the old corrupt crew replaced with a new corrupt crew. This is the problem! Until we change the flow of money into the political arena, we will continue to have faux governments working for the wrong parties, doing the exact opposite of what they should do to stop this international train wreck.
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