Many, yours truly included, have pointed out the fallacy of the current ‘mark to market” system and have offered solutions.
It seems that the administration is finally listening. During a week when Barry has hightailed it to Europe , the FASB has voted to adopt new more relaxed guidelines for the implementation of mark-to market.
Under this new system the assets are valued based on what they would fetch in an “orderly” sale, versus, I suppose, a fire sale.
I have to tell you it seems that those boys at the FSAB can’t miss an opportunity to screw things up. I am not sure who decides what the “orderly” sale price would be but prima fascia it seems highly subjective. I’ll write a post on that soon but in the mean time I have to ask : Why not just implement a cash flow evaluation clause which would kick in in times of liquidity crisis? Simple, objective and TEMPORARY! When liquidity returns just switch back to a bid price based system.
Lets return to the subject at hand. Obama and the Democrats ran on the platform that the current financial mess was caused by “deregulation”. Don’t ask the what specific deregulation because slogans rarely stand the light of reason and this one is no exception.
Obama catapulted himself to the presidency on this lie. Is it any wonder that his legacy like anything built on lies, is already one of an incompetent buffoon. He doesn’t even have the courage to unveil this while he is here at home to answer questions! He does this when he is hiding away in Europe giving the Queen a made in China I-pod and bashing America at the news conference.
Don’t think for a second that today’s relaxation of the mark-to-market regulation is simply coincidental, here is what CNBC inadvertently reports on the timing :
“At a hearing last month, a House panel wrung a pledge from FASB Chairman Robert Herz to try to issue guidelines in three weeks that would relax the mark-to-market rule.
The head of the House Financial Services subcommittee, Rep. Paul Kanjorski, D-Pa., had held out the threat of legislation to pressure the standard-setting board to take the steps.”
Here is Obama during the debates, ” ..the biggest problem was deregulation of the the financial syste…Senator McCain bragged about the fact that he is a deregulator.” Well Barry it seems that so are you!
Here we have Barry deriding McCain for “bragging that he is a deregulator.” Well Barry it seems that so are you!