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As Bankers Kill Off Mark-To-Market For Good, Former FDIC Chairman Gloats

Tyler Durden's picture





 

By now everyone is aware that following tremendous pressure by the banker lobby, which knows too well the Ponzi jig will be immediately up if Quantitative Easing's TBTF Madoffs are forced to disclose the true value of their worthless assets (yes, true value comes from asset cash flow generation, not from diluting money), the FASB decided to stop its push for a return to MTM. From the WSJ: "Accounting rule makers, bowing to an intense lobbying campaign, took a key step Tuesday to reverse a controversial proposal that would have required banks to use market prices rather than cost in order to value the loans they hold on their balance sheets." Transparency? What moron would propose that in an economy that is so obviously healthy and surging. After all, the only way to validate a surging stock market, er, economic recovery, is through bullshit numbers pulled out of the ass. That way they can pretend to tell us the truth, we can pretend to believe them, and everyone will frontrun the Fed who pretends not to be buying stocks. And it would have been great if it ended there. Alas no. Following the announcement, none other than Bill Isaac, current Chairman of LECG, but far more importantly, former Chairman of the FDIC under Ronald Reagan decided to send out a gloating email to his entire address book explaining what a moral victory it is to kill the MTM monster that is the sole reason for the near collapse of capitalism in 2008, and how truly wonderful it is for everyone to live in perpetual lack of knowledge of what the true value of any company's assets really is. Unfortunately, this just goes to show what the existing, extremely bribed, leaders of the nation's most vital organizations really think.

And before we present Isaac's note, here is some more on how the banker lobby scored one more over the US peasantry, from the WSJ:

The Financial Accounting Standards Board preliminary vote would allow banks to continue valuing many of their loans at amortized cost, an adjusted version of their original cost, as they do now. That backtracks on an FASB proposal last May to expand fair value to bank loans. The reversal is a victory for the banking industry, which says it would have hurt lending and unfairly reduce banks' book value. Supporters of the FASB fair-value proposal say it would have improved transparency and unmasked potential weakness at banks.

The FASB indicated the overwhelmingly negative reaction to its proposal from companies and investors played a large role in prompting the board to change its mind. The board received more than 2,800 comment letters on its fair-value proposal, most of them opposed to the move.

FASB changed direction on how to value loans because of "strong signals from the board's constituents," FASB Chairman Leslie Seidman said during a webcast Tuesday. She also noted that some loans—including those that banks trade actively instead of retaining in order to collect the payments on them—will have to be valued at market prices.

And the reason for why opacity rules:

At some large banks, their loans' fair value is billions of dollars less than their carrying amount.

That would dramatically reduce their shareholder equity—or assets minus liabilities—if the loans had to be carried at fair value.

Investors have said fair-value information is important to them even if they don't think it should be the criteria for valuing loans on the balance sheet, FASB members said.

Simply said, if everyone knew the truth, everyone would be insolvent.

And here is William Isaac's letter, which blames Mark To Market for the near end of capitalism. Conveniently his email is also provided.

Mark-to-market accounting -- a failed policy that was terminated by the Roosevelt Administration in 1938 because it was inhibiting bank lending -- was revived by the Securities and Exchange Commission and the Financial Accounting Standards Board in the 1990s over strong objections from the Fed, FDIC and Treasury.
 
The MTM policy senselessly destroyed some $500 billion of capital in our financial system when the markets collapsed in 2008.  This destroyed some $4 trillion of bank lending capacity and was a major contributor to the financial panic and ensuing economic collapse.
 
The FASB, almost inexplicably, proposed last year to EXPAND mark-to-market accounting to cover all bank loans.  This would have essentially shut down lending except for short-term lending to businesses with impeccable credit ratings.
 
See the press release below.  The FASB is apparently abandoning its plan to expand mark-to-market accounting.  This is an important first step improving US accounting as it relates to financial institutions.
 
Best regards, Bill
 
William M. Isaac, billisaac@comcast.net
Chairman
LECG Global Financial Services
1209 Westway Drive
Sarasota, Florida 34236
Tel: 941.388.0088

h/t A B

 


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Wed, 01/26/2011 - 12:43 | Link to Comment satansanus
satansanus's picture

"true value comes from asset cash flow generation, not from diluting money"

THE BOTTOM LINE ON INVESTING

Wed, 01/26/2011 - 12:50 | Link to Comment flacon
flacon's picture

FASB also suspended the laws of gravity so that when the bankers finally jump out of windows they will float around in the atmosphere like Pink Floyd's pink pig.

Wed, 01/26/2011 - 12:52 | Link to Comment SteveNYC
SteveNYC's picture

Hahaha!! Brilliant imaging there. Something tells me Roger Waters would quite gladly address the "floating banker" plague via song.....

Wed, 01/26/2011 - 13:11 | Link to Comment Deathtöngue
Deathtöngue's picture

Uh, he did, and it happened to be in a song associated in concert with giant inflatable pigs.

 

"Big man pig man

Haha, charade you are

You well heeled big-wheel

Haha, charade you are"

- Pink Floyd, "Pigs"

 

 

 

Wed, 01/26/2011 - 13:16 | Link to Comment nevadan
nevadan's picture

Once in a while a post on ZH is truly a belly laugh.  Tx flacon.  I had to do a google on the Pink Floyd pink pig just cuz.

http://www.youtube.com/watch?v=iNa551dR6Rc

Wed, 01/26/2011 - 13:58 | Link to Comment hidingfromhelis
hidingfromhelis's picture

The only time a banker jumps willingly is with a golden parachute.  However, a little encouragement wouldn't be a bad thing: 

http://www.youtube.com/watch?v=yge311sFhC8

Jump, you fuckers!

Wed, 01/26/2011 - 14:12 | Link to Comment chinaguy
chinaguy's picture

These mother F-ing Banksters are giving themselves huge bonuses while hiding behind FASB sham.  Who TF is running the country?

Wed, 01/26/2011 - 15:44 | Link to Comment pods
pods's picture

I am assuming that with your correct analysis of the situation, your question was rhetorical?

pods

Sat, 01/29/2011 - 18:09 | Link to Comment SteveNYC
SteveNYC's picture

Pathetic shill shareholders should be doing something about it....oh, hang on.....the mutual fund managers went to the same schools as the Banksters. Carry on.......

Wed, 01/26/2011 - 12:44 | Link to Comment Racer
Racer's picture

and if I want to go and get a loan can I put an imaginary figure on my assets as collateral?

Wed, 01/26/2011 - 13:41 | Link to Comment Arius
Arius's picture

Before answering, could you tell us if your real name is Blankfein?

Wed, 01/26/2011 - 13:42 | Link to Comment Assetman
Assetman's picture

Yeah, go ahead and value your automobiles at cost.  I'll tell our esteemed FASB Chairman its all ok and let Turbo Timmy know we need to deduct all interest payments from your federal income taxes.  Because as we all know-- debt is good, and can never go down in value.

</sarcasm>.

Wed, 01/26/2011 - 12:44 | Link to Comment hugolp
hugolp's picture

Dont worry. Mark to market will be back when the next bubble starts.

Marking to market when prices go up is dandy for banks, but its a disaster when prices go down.

Wed, 01/26/2011 - 12:46 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Mark to market senselessly destroyed 500 billion! That is so funny and not at the same time it makes one want to laugh/cry!

Truth destroyed value.

Surely the end is near!

ORI

http://aadivaahan.wordpress.com/2010/11/12/wisdom-for-warriors-3/

Wed, 01/26/2011 - 13:53 | Link to Comment A Man without Q...
A Man without Qualities's picture

The guy's a fucking idiot - the banks themselves pushed for mark to market as this enabled them to treat liabilities as trading assets and therefore significantly reduce reserves and therefore take much more leverage.  Lehman themselves would actually ignore the outlier prices, putting it down to "noise", thus reducing their VaR metric and claim everything was under control.

Truth is, the banks will work out how best to use whatever rule to their advantage...

Wed, 01/26/2011 - 12:45 | Link to Comment LostWages
LostWages's picture

All loans are backed by the full faith and credit of The Bernank, bitchez!

Wed, 01/26/2011 - 20:27 | Link to Comment rocker
rocker's picture

Exactly LostWages. Without the Bernank the market would be done. Gold tell you they are inflating everything. Big Ben Blows.

Wed, 01/26/2011 - 12:45 | Link to Comment Trifecta Man
Trifecta Man's picture

Tyler - sock it to 'em.

Wed, 01/26/2011 - 12:47 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

Wow .... They have a big rug. Never ever count ben out, never.

Another nail in the hyperinflation trade .... Oh, Gonzo -

Wed, 01/26/2011 - 12:53 | Link to Comment Quintus
Quintus's picture

Quite the opposite, I should think.  If they are now going to be in a position where they never take their lumps and write bad investments off, which would be deflationary, the only alternative is to run the printing presses forever and keep pumping fresh new money into the banking system to create the impression that all those dead investments are still generating healthy returns.

Wed, 01/26/2011 - 13:06 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

So are all the businesses like Cat, LuLu, Coke, McD's, Nike all making money just because of pomo ??? When does the overall growth get priced in now after everyone priced in the end of capitalism 3 years ago ?

What quarter should I look for a pullback in Cat ? After they got blasted in 07' why would Cat risk capital and buy Bucyrus & Electro-Motive Diesel ...

 

Wed, 01/26/2011 - 13:10 | Link to Comment Quintus
Quintus's picture

What is this 'Overall Growth' of which you speak?  Can you give me a growth number excluding the effect of government stimulus?  If there is growth, why the stimulus?  If everything's humming along, why the ZIRP?  Come on Bernanke, man up and turn off the money pumps and let's see how good things really are.

What quarter should I look for a pullback in Cat ? 

The quarter after the Fed stops pumping $100B a month into the system to stop it falling flat?  You may be waiting some time.   


Wed, 01/26/2011 - 13:20 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

Con games are about confidence, and always have been.

Wed, 01/26/2011 - 13:21 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

Ya all the big boys/USA make money hand over fist all over the globe.

Cat,Nike,J&J,McD's,Deere,Starbux,ect,ect,ect,ect ...

Or ...F,GM,Firestone,Altria,Dow,Exxon,Apple,GE,Berkshire,Microsoft,Nestle,Halliburton ... just a few.

And with the China slowdown looming this will hammer the other EM, I wonder if that money will head back toward our markets .... ?

 

Wed, 01/26/2011 - 13:53 | Link to Comment traderjoe
traderjoe's picture

If all of these companies are kicking ass and taking names, why is the S&P 500 flat for what like 10 years? 

Wed, 01/26/2011 - 20:51 | Link to Comment Quintus
Quintus's picture

Oh dear Mr. Smailes.  Looks like The Bernank is too cowardly to turn off the money pumps. At least that's what the FOMC minutes indicate.  Now why would that be?  Pump! Pump! Pump!  Everything's fine, nothing to see here.  The economy is strong!!!

Wed, 01/26/2011 - 13:02 | Link to Comment Caviar Emptor
Caviar Emptor's picture

a la Japan

Wed, 01/26/2011 - 13:15 | Link to Comment Quintus
Quintus's picture

Precisely.  However the US is not Japan.  The US will not be able to finance 20 years of Government borrowing by selling bonds to its own citizens at pitiful returns.  Neither will it be able to sell a trillion dollars a year of debt to the rest of the world without some economy crippling rate increases.  At 200% debt to GDP Japan is reaching the end of the road in terms of their previous economic policies.  The US has skipped 20 years of Japan-style economics and is going straight to the money printing end game that the Japanese are about to reach.

Wed, 01/26/2011 - 13:33 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

Japan was not the world reserve currency. Uncle ben owns the ink jets ....

But, but, but, but ...... ..... Show me a 10 year dollar chart, what crash after the biggest credit implosion on record... and reflation.

 

Wed, 01/26/2011 - 13:42 | Link to Comment gpsnodgrass@cox.net
gpsnodgrass@cox.net's picture

Actually,Quint the U.S. can and probably will keep the zombie ponzi going by forcing its citizens to convert their retirement plans to savings bonds plans.

Wed, 01/26/2011 - 14:10 | Link to Comment Rogerwilco
Rogerwilco's picture

@gps

Yep, that is the next step. The retirement accounts will buy them 2-3 more years of Ponzi play time. That $2T "hoard" of cash businesses are "sitting on" must look tempting as well. Cha-ching! Another year of Ponzi finance in the bag. And I'm sure they can come up with many more creative ways to extend and pretend.

Wed, 01/26/2011 - 12:47 | Link to Comment entendance
entendance's picture

The price for freedom is eternal vigilance.

When the many behave like sheep, the poodles themselves turn into lions. If the sheep, in their sheepishness, create lions, they are responsible of the existence of lions.

http://www.entendance.com/forums/viewtopic.php?f=6&t=781&p=14990#p14990

 

Wed, 01/26/2011 - 12:48 | Link to Comment taraxias
taraxias's picture

Was there ever any doubt a return to M2M would be killed?

Wed, 01/26/2011 - 13:26 | Link to Comment Rainman
Rainman's picture

No doubt whatsoever. It is the cornerstone of the Great Ponzi. Never forget FASB is regulated by Mary, who reports to Timmay.

Wed, 01/26/2011 - 12:48 | Link to Comment Quintus
Quintus's picture

I work on the assumption that all banks are insolvent and that most of their 'Assets' are, or will prove to be, worth only a tiny fraction of their book value.

In this way, I am completely immune to the ongoing fraud of 'Mark to Unicorn' valuations, so Mr Isaac can stick his gloating in his pipe and smoke it.

Sadly the fallout, when this house of cards inevitably falls flat, will affect even those of us who would not touch a Bank stock with someone else's 20 foot stick.

Wed, 01/26/2011 - 12:53 | Link to Comment thepigman
thepigman's picture

Yep, i regard the entire S&P financial

sector as composed of mark to myth

zombies. F em.

Wed, 01/26/2011 - 12:58 | Link to Comment thepigman
thepigman's picture

Nice to have an entire financial
system designed to extract wealth
from everyone else to put in the zombies pockets. Gee, I didn't hear Obama speak to this issue last night.

Wed, 01/26/2011 - 12:50 | Link to Comment Racer
Racer's picture

"bowing to an intense lobbying campaign"

 

Methinks they dost protest too much

Wed, 01/26/2011 - 12:52 | Link to Comment pods
pods's picture

Just wait until mark to fantasy isn't enough to keep them looking solvent.

pods

Wed, 01/26/2011 - 12:52 | Link to Comment RheologyMan
RheologyMan's picture

The Final straw!!..........Exposure of this on CNBC and other Mainstream media will of course not happen......It works til it does'nt!!!.......I would not want to be a TBTF Bank when the truth comes out & this ponzi collapse creates the ENORMOUS DESTRUCTION that will come.

Wed, 01/26/2011 - 13:00 | Link to Comment Ragnarok
Ragnarok's picture

The truth is out, and nobody cares. 

Wed, 01/26/2011 - 14:01 | Link to Comment nowhereman
Wed, 01/26/2011 - 13:02 | Link to Comment scatterbrains
scatterbrains's picture

that's ridiculous they'll just extend *mark to prices paid* to their stock holdings and all will be  fine.

Wed, 01/26/2011 - 12:54 | Link to Comment the rookie cynic
the rookie cynic's picture

FASB cronies thought about looking up "transparency" in the dictionary, but then reversed course and decided there is no such word. Ignorance is strength. http://therookiecynic.wordpress.com/

Wed, 01/26/2011 - 12:56 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

The wicked witch (mark to market accounting) is dead. Time to power up the 3D projectors and dance on the grave of reality.

I've been saying here on ZH for well over a year that perception is reality when enough people decide to believe the perception. It is the actions of people that ultimately determines what "reality" is. If people wish to believe all is well, they will act like all is well. Until they change.

When enough people begin to doubt the present reality, they will no longer believe the illusion and that illusion will collapse, only to be replaced by another illusion. This is the basis behind cycles. Perception shifts one way, then another, thus shifting reality.

Wed, 01/26/2011 - 13:34 | Link to Comment cougar_w
cougar_w's picture

All that said, gravity is still really real 4 realz

Wed, 01/26/2011 - 13:36 | Link to Comment Dr. Porkchop
Dr. Porkchop's picture

It's not a lie, if you believe it.

 

  -George Costanza

Wed, 01/26/2011 - 13:52 | Link to Comment Scisco
Scisco's picture

CD, could you point to a good starting point where you argue this? I don't agree with you but would like to see how you present your cause.

Wed, 01/26/2011 - 14:39 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

The Fed, the TBTF banks, the Treasury etc are all creating an alternative reality that has extended well beyond what many here on ZH and else where thought possible. How have they done so? What is it that they are actually doing here? If the economy is unstable and the recovery a mirage, how come it hasn't collapsed yet? What is keeping it "supported"?

It is supported by the collective will, the consciousness of not only the Ponzi masters, but of the population that desperately wishes to believe what they are told. It doesn't matter so much, at least not initially, that the average Joe doubts they are being told the truth. They want to believe the lie, thus they begin to act as if the lie is true. To do otherwise would in their minds be suicide, a self fulfilling prophecy of collapse if you will. So we all (or most of us) believe in another self fulfilling prophecy, that of recovery.

Belief is the strongest force in the universe.

Reality is real because we all believe it is real. Cougar believes gravity is "real" and so does everyone else. Thus it is real in this reality because the collectively agreed upon "rules" in this realty say it is. Consciousness creates or forms reality, not the other way around. This isn't a subject the average classically trained person is willing to even entertain seriously. Interestingly the physicists are moving in this direction.

The Fed and other "author-ities" are simply providing "proof" to help us believe in the illusion. We all don't believe something until it is "proved". What exactly is proof?

Wed, 01/26/2011 - 14:51 | Link to Comment Winston Smith 2009
Winston Smith 2009's picture

"It is supported by the collective will"

.. and many trillions of dollars worth of borrowed money that will never be paid back, like a last fling on a credit card before it's cut in two.

Wed, 01/26/2011 - 15:18 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

The trillions of dollars is precisely the "proof" the Fed is providing to support the alternative reality. Eventually people will turn away from this proof as other "proofs" come into view, such as inflation or increased taxes or austerity measures. Each item is eventually seen as "proof" of another alternative reality.

Then it all collapses into a lower energy state and the people slowly begin to imagine a new alternative reality, one of hardship and slow rebuilding of a new paradigm.....which is just another word to describe "belief".

Wed, 01/26/2011 - 15:14 | Link to Comment Chicago bear
Chicago bear's picture

CD: Earlier this month I was asked to give a political consultant views on the US economy. I submitted several topics for him to consider forwarding on to his client, a newly elected official. One of the topics was titled "Belief". Here is what I put: 

 

Belief: Personal renewal, whether ours or others, requires belief. Understanding the nature of belief, practicing belief, and practicing the art of influencing the beliefs of others is a substantial part of all that we do each day.  It is important to notice these practices and master them. Belief plays a role in business; belief is bigger than just business. ?People believe in new positive information when it is consistent with what they already knew. People do not fully believe in new information that contrasts with their prior beliefs (Reference) .  ?How do people adopt anything until they believe it? How can they believe if the mechanism of belief is scrambled, jumbled and corrupted. Is it possible that schools are obfuscating the methodology of believing itself? ?Beliefs and belief systems differentiate people from other people. 

 

Belief, Believe, Believers [Verb] Pisteuo "to be persuaded of," and hence, "to place confidence in, to trust,”; peitho "to persuade,“ [Noun] pistis "faith," is translated "belief" in Rom_10:17; 2_Thess_2:13

 

 

 

Wed, 01/26/2011 - 15:37 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

Very nice.

What people fail to recognize is that our "belief" system is reflected back to us as "real" by everything and everyone around us. Our entire education system is designed to condition us to believe in the structures already in place while building upon them to create more "belief". Our business practices and political system self reinforces our business and political belief systems. 

Everyone and everything says I am, therefore I am.

I could write about this all day, but people would begin to stone me. :>)

Wed, 01/26/2011 - 22:59 | Link to Comment Scisco
Scisco's picture

I appreciate you hanging around to answer questions CD. To many threads become dead too quickly. I suspect our disagreements may come down to a different definition of reality. While I agree with your general concepts it is the idea that, how we perceive reality alters it, that bothers me because I see another process that is more Newtonian.

What is supporting the distortion, probably a whole host of biases and effects like band waggon effect, emotional bias (I hear hopeium is great for making you feel better), status quo bias, and the desire to avoid cognitive dissonance. It is so much easier to accept what MSM is spouting and feel good than to try to verify it and be forced to re-evaluate what one considers reality to be. Therefore yes, they want to believe the lie and do. However believing that the recovery is not enough to make it so, if you define a recovery as an improvement in efficient capital and resource allocation. This can continue as long as there isn't a catastrophic shortage in a critical area of the economy. Right now, money printing, mark to unicorn, ect. is able to cover up the deficiencies by diverting saved resources, however those resources will eventually dry up because they are not being replaced faster than they are being consumed.

In terms of belief, it can be the strongest distortion force in the universe.

I am not sure what scientific papers you are referring to that suggest consciousness creates or forms reality but I would be interested in reading them. I look at it as just because society is not aware of general relativity doesn't mean that their heads don't age faster than their hearts!

Once again thank you for your insightful writing.

Wed, 01/26/2011 - 22:53 | Link to Comment Trifecta Man
Trifecta Man's picture

CD - sock it to 'em.

Wed, 01/26/2011 - 14:08 | Link to Comment nowhereman
nowhereman's picture

Something like Global Warming I suspect.

Wed, 01/26/2011 - 12:55 | Link to Comment John McCloy
John McCloy's picture

It truly feels like a gangbang on the constitution that never seems to end.

Wed, 01/26/2011 - 14:13 | Link to Comment nowhereman
nowhereman's picture

AH, there might be hope.

http://www.youtube.com/watch?v=gHoOTXEfUNo

Got a Cohen thing going today, sorry.

Wed, 01/26/2011 - 14:54 | Link to Comment Winston Smith 2009
Winston Smith 2009's picture

"It truly feels like a gangbang on the constitution that never seems to end."

With very few exceptions, the contents of the Constitution/BoR became effectively irrelevant a long time ago.

Wed, 01/26/2011 - 12:55 | Link to Comment Cdad
Cdad's picture

Wow.  This is a banner day for fraud.  Not to take away from this accounting fraud victory [for criminal syndicate Wall Street bankers], but just check the fraud in today's oil market.  Again, despite news from the supply/demand front...presto...oil magically levitates and folk start talking about $100 per barrel.

Fire hose please...

Wed, 01/26/2011 - 13:10 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

There is no valid price of oil available to you.  China has tied up long term supply in non public contracts.

West Texas Intermediate is no longer desirable and there is less of it every day.  Brent oil is the most widely used in the world.  Malaysian Tapis oil is much in demand in Asia.

The antiquated pipeline / storage array in the US for WTI has lost its meaning as a measurement.  WTI is presently the only grade of crude under $90/barrel.  It's just not very valuable anymore because there is not much of it to ship anywhere.  You do not place orders for products that won't be delivered. 

Wed, 01/26/2011 - 13:34 | Link to Comment Cdad
Cdad's picture

Could NOT disagree with you more.  No part of your response resonates with me.

a.  The issue of the high price of Brent is now coming to light as a banker issue...in this case criminal syndicate Euro bankers who have moved in to attempt at cornering of that market.

b.  West Texas is oil in the largest oil market [as measured by users] in the world...so your point makes no sense.  As well, WTI oil is freakin' everywhere...because demand has so badly slackened.

c.  [repeat b] + criminal syndicate Wall Street bankers place orders for oil ALMOST CONSTANTLY that they have no interest in receiving.  That would be your futures market...which constantly distorts the real price of oil.

Let me guess...you are a peak oil guy?

Wed, 01/26/2011 - 13:45 | Link to Comment Rainman
Rainman's picture

+ $100 bbl. And a big cheer for Bubba, who signed the Commodity Futures Modernization Act 2000 on his way out of the White House back door. 

Wed, 01/26/2011 - 14:23 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

Well, people can always imagine conspiracies and demand someone prove them wrong.

Total US oil production is less than 6 mbpd and US consumption is about 20 mbpd so how you can imagine that WTI, which is only a portion of US production, is "everywhere".  In fact, further, not a drop is exported, so how can it possibly be "everywhere"?

This is just factual and has nothing to do with speculative conspiracies.  The entire state of Texas produced about 3.5 mbpd in 2010 (down about 50% from 1980) -- and the US consumes 20 mbpd.  I do not think you were careful with your word, "everywhere".

As for Peak Oil, you either believe the Earth is a sphere of specific measured size/volume, or you believe it is flat and extends infinitely in all directions.  I can't help you with your latter view.

 

 

Wed, 01/26/2011 - 14:51 | Link to Comment iDealMeat
iDealMeat's picture

+ (n-1)

Wed, 01/26/2011 - 14:54 | Link to Comment Cdad
Cdad's picture

Crash,

Regarding my use of the word "everywhere" I was referencing massive inventories of oil already in storage.  I was not trying to suggest that the oil was moving everywhere around the world.

As for Peak Oil, you either believe the Earth is a sphere of specific measured size/volume, or you believe it is flat and extends infinitely in all directions.  I can't help you with your latter view.

Speaking of Flat Earthers, you make two gigantic presumptions in your smart ass remark:  A.  That the process of creating oil has ended [is not self-perpetuating]  B.  If A, then the supply will be used up prior to our lifetimes ending, or technology increasing efficiency, or disruptive technologies making the entire issue a moot point.

I refer you back to the fact that we have freakin' oil coming out our storage ears...as you insist that oil is a rarity and needs to spike in price...TODAY!  I know that does not jive with today's price action...which...if you think about it...makes a guy starting wondering about how fucking broken the oil market is [as opposed to oil itself] which, in the case of Brent was discussed...

http://www.zerohedge.com/article/good-old-fashioned-market-cornering-scheme-responsible-brent-wti-divergence

Wed, 01/26/2011 - 16:29 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

I recall that thread, Cdad.  I think he had it wrong.  There is rather a lot of evidence that the other qualities of crude on the market are easier to access.  The WTI supply is in contorted and outdated pipeline networks.  Also, the effect is not limited to Brent, from that thread.  Tapis is pricey.  Even Alaska oil is pricey.  The spreads are widening vs WTI NOT just on Brent, but on Kuwait oil vs WTI, on Tapis vs WTI, on everything vs WTI.

They were designed to carry WTI elsewhere.  Now they get used to carry oil from Houston, where it is imported, to elsewhere.  This chokes off availability pipelines accessible in west Texas, simply because they are already full of other kinds of oil.  So the WTI winds up elsewhere, often in monitored Cushing tanks, because there is nowhere else it can go.

I'll take a step back from the flat earth stuff because you didn't deserve that.  Here's what it all comes down to: Saudi Arabia's refined strategy.  Not refinery strategy.  The refinement of their overall strategy that has take place as various patriarchs in the House of Saud died.  The present course of their strategy has been verbalized as: "We will not dip into our extra production ability in response to price."  Period.  They will only increase production (assuming they *can*) if demand . . . demands it.  This, btw, includes price rise due to tensions should a new militant government take control of Egypt.  The Saudis would ignore such a price rise.  Why shouldn't they?  They make more money if there is a price rise.

Note how powerful this is.  Russia now outproduces them.  By almost 2 million bpd.  Why do they allow Russia to have that extra $180 million each day?  If they could produce more, why would they not grab those customers?  Their claim is "we don't have any demand for additional oil so we don't produce any more", but Russia found customers for theirs.

It is very, very, very suspect that they allow Russia to have those customers at $90/barrel.

Wed, 01/26/2011 - 12:55 | Link to Comment erik
erik's picture

zombie banks are here to stay.  we should be making a list of all of these people so that we can re-visit their statements when the entire system crashes.

Wed, 01/26/2011 - 13:57 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

Or ....

http://www.zerohedge.com/article/surge-gld-december-145-call-volume

Surge In GLD December $145 Call Volume

Wed, 01/26/2011 - 13:58 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture


by Spitzer 
on Tue, 11/30/2010 - 13:15
#764909

As per TSX

AXR-7%

FVI-8%

SVM-5.5%

FV-4.5%

On the gold side

UXG-13%

XG-12%

ITH-10%

 

 

Wed, 01/26/2011 - 13:59 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture


by DoChenRollingBearing 
on Tue, 11/30/2010 - 12:37
#764779

Au, Ag, Pt and Pd are all moving out.

To the moon Alice.

Wed, 01/26/2011 - 14:00 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture


by SilverIsKing 
on Tue, 11/30/2010 - 12:17
#764711

Shorts are now running for cover.  Could easily see $145 GLD by Dec OPEX.

I just saw they were going for 0.31 so I picked up a few myself.

Thanks for the tip.  :-)

Wed, 01/26/2011 - 14:01 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture


by Turd Ferguson 
on Tue, 11/30/2010 - 12:23
#764733

Ole Turd's $1500 by 12/10/10 still has a chance!

Wed, 01/26/2011 - 14:02 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture


by spartan117 
on Tue, 11/30/2010 - 13:07
#764884

by TradingJoe 
on Tue, 11/30/2010 - 11:18
#764534


"God" and "the World" is expecting a Dec Rally, I beg to differ! After all this time "it's different"! Tops where ever you look, POMO not really meaning anything anymore, Huge Headline and Geo-Politcal Risk, also everywhere, not to mention Bushie Taxes "un"cut?! All this makes for a potentially VERY UGLY Dec, eh?

 

I can read just find.  But I don't need to be able to read to tell that you're a fucking idiot.  A top is not "going ballistic".  A top is a top.  Meaning it doesn't go any higher.  Change defintions to suit your idiocy if you want.

 

Just a week ago you were calling for Gold/Silver to crash.  Do you post for fun, or are you paid to be a nuisance?

Wed, 01/26/2011 - 14:02 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture


by Spalding_Smailes 
on Tue, 11/30/2010 - 13:40
#764959

I understand the dollar has moved from 85 - 81.50 in 5 years after 14 trillion in bailout/backstops, got it ....

Dollar is king. Everything else is in the rearview. All fiats under the heel/trance of Uncle Ben. Euro,RMB, everything.

 

Put that in your Austrian pipe and smoke it ...

Try buying gas,paying taxes,rent,cars with gold coins today .... Everyone needs/wants/must have dollars.

 

Dollar denominated debt bitch .... Dollar hegemony, global finance study it, read about it.

Wed, 01/26/2011 - 14:18 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

SS

Only a obsessive-compulsive narcissist on crystal meth keeps responding to his or her own comments in this manner. Take a cold shower and get some sleep.

Wed, 01/26/2011 - 14:24 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

I'm not responding. I tried posting all at once took up the entire page.

 

Focus on the point, please ....

Lots of pom~pom waving, bad advice, before crash by the vets....

CD, do you have any insight on China or dollar denominated debt or deflation ?

Wed, 01/26/2011 - 16:26 | Link to Comment Hephasteus
Hephasteus's picture

Nother 2 page thread shit.

 

Wed, 01/26/2011 - 12:57 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

This is an absolute outrage and the fact that it has taken place should be viewed as validation of the perspective that there are no organic economic underpinnings beneath this statistical recovery.

To reject valuation of assets on the basis of what someone is willing and able to pay for them -- in favor of valuation based on what they cost -- is insanity.  It is mind boggling that CPAs sworn to identify false accounting are accepting this.

It is as I have said.  In the end only oil matters.  Not real estate.  Not gold.  Not earnings.  Not anything else.  Only oil is necessary to feed 6.8 billion people and there is nothing any FASB ruling can do about it getting scarce.

Thu, 01/27/2011 - 11:37 | Link to Comment JohnF
JohnF's picture

As the Germans say, Quatsch mit Rosen.

Mark-to-market is procyclical: everyone loves it going up, and it destroys asset values going down.

The only reason to value an asset based on what someone is willing and able to pay for them is if you are evaluating an asset as if you were going to wind down the company, i.e. sell off productive assets at market value. Only an accountant would treat an ongoing company that way: it is sheer madness to do so when markets fluctuate.

 

Sure, you might have, at one given point in time, an idea of what a company is worth if you were to liquidate the company; at the same time, the values of companies will then fluctuate wildly, leading to the madness we see on the markets. "Worth" $1bn according to M2M today? Let me loan you $200mn; "worth" $800mn according to M2M 6 months later? Call in the loan because the equity isn't there.

Destroy a functioning company by no longer applying asset cash flow generation calculations, instead relying on markets that, more often than not, do not exist. If I own a 65 story building and these are sold at the rate of one every 10 years, where is my market? Base it on short-term fluctuations of new rental income per square foot or some other irrelevant indicator that has no bearing on a fair value?

To repeat: any valuation methodology that is pro-cyclical (and M2M is procyclical!) dooms the economy to boom-and-bust, with vastly more destroyed than gained.

Wed, 01/26/2011 - 12:57 | Link to Comment NOTW777
NOTW777's picture

wheat, corn, soybeans - screaming

the new gold is food

Wed, 01/26/2011 - 13:02 | Link to Comment Quintus
Quintus's picture

Yeah, but you can't eat it.   Oh wait....

Wed, 01/26/2011 - 13:20 | Link to Comment ToddGak
ToddGak's picture

Thus more food riots, coming to your TV soon from around the globe.

Wed, 01/26/2011 - 12:57 | Link to Comment gkm
gkm's picture

Uh, MTM works in both directions.  You may want to ask why they suspended MTM at the end of a move rather than in the middle.  This was just an opportunity to pull the covers back over.  Nothing more.

 

Wed, 01/26/2011 - 14:28 | Link to Comment Winston Smith 2009
Winston Smith 2009's picture

Yep, change the rules as needed to what suits you best, not to accurate accounting methods that would actually inform investors.  Keep the illusion alive...

Wed, 01/26/2011 - 12:58 | Link to Comment farmboy
farmboy's picture

Love it I guess this applies to my own trading account too so i can borrow a few trillion and make forever money in positive carry trades

Wed, 01/26/2011 - 13:22 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

No more margin calls?

Sorry, but some animals are more equal than others.

Wed, 01/26/2011 - 12:59 | Link to Comment The Axe
The Axe's picture

Perfect fucking timing.....so the former GMAC declares a IPO....why not...

Wed, 01/26/2011 - 12:59 | Link to Comment DavidC
DavidC's picture

"The MTM policy senselessly destroyed some $500 billion of capital in our financial system when the markets collapsed in 2008".

Errm, horse, cart?

What a dickhead. Or moron. Or both...

DavidC

Wed, 01/26/2011 - 14:31 | Link to Comment Winston Smith 2009
Winston Smith 2009's picture

Yeah!  Damn those outrageous, bubble-created valuations crashing back to something approaching reality!

Wed, 01/26/2011 - 13:00 | Link to Comment Xibalba
Xibalba's picture

Who trusts these markets?

Wed, 01/26/2011 - 14:31 | Link to Comment Winston Smith 2009
Winston Smith 2009's picture

HFT computers.

Wed, 01/26/2011 - 13:01 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Even after 3 years the need to hide the truth is vital. In fact, by my reckoning, it's even more important than it was in 2008. Back then, the astronomical numbers couldn't be compared to what the Fed could come up with as a 'rescue package'. Now that the limits are being reached with inflation creeping in and debt ceilings needing to be raised there's a better sense of the magnitude of losses, the hopelessness of covering them, and the pain it costs the economy to engineer a 'rescue' through more money printing. 

Wed, 01/26/2011 - 13:02 | Link to Comment InconvenientCou...
InconvenientCounterParty's picture

This is fascism -no?

Privatize profits for elites and distrubute losses to the public collective.

When the Chinese model starts looking good, we're truly fucked. People have less value than a skinny dog in that system.

Wed, 01/26/2011 - 13:05 | Link to Comment Sudden Debt
Sudden Debt's picture

No, it's called suckerpunching.

Wed, 01/26/2011 - 13:11 | Link to Comment Thunder Dome
Thunder Dome's picture

Lowe's firing 1700 managers, hiring part-time workers (slaves).

Wed, 01/26/2011 - 13:03 | Link to Comment Jerry Maguire
Jerry Maguire's picture

The government and their various agencies are completely impotent at this point.  The people have to take control of their own government and kill the beast themselves, using the peaceful means of amending the constitution.

Before it's too late.

http://strikelawyer.wordpress.com/2011/01/15/amending-the-constitution-t...

http://strikelawyer.wordpress.com/2011/01/15/us-constitution-28th-amendm...

http://strikelawyer.wordpress.com/2011/01/15/28th-amendment-first-and-se...

http://strikelawyer.wordpress.com/2011/01/16/28th-amendment-section-3/

http://strikelawyer.wordpress.com/2011/01/17/28th-amendment-the-rest-exp...

http://strikelawyer.wordpress.com/2011/01/19/28th-amendment-an-addition-...

http://strikelawyer.wordpress.com/2011/01/20/28th-amendment-some-final-t...

There are a few following related posts as well.

If nothing else, it would mean that gold holders would do very well.

Wed, 01/26/2011 - 13:12 | Link to Comment Jerry Maguire
Jerry Maguire's picture

I mean, not marking to market is just more lying, cheating and crude deception.  Of themselves and everybody else.  We have racked up completely unpayable debt, which is why we need a jubilee; and it is a function of phony money, which is why we need a gold standard.

Denial is a powerfully destructive force.  The energy that goes into it increases more and more as the denial becomes more and more untenable, until finally you're putting more into denial than you're putting into anything productive.  Reality asserts itself eventually.  The longer and deeper the denial, the more dramatic it is when reality is finally faced.

But in the meantime it's all wasted energy.  Fighting reality is pointless.

 

Wed, 01/26/2011 - 13:03 | Link to Comment Kina
Kina's picture
Bizarre. But it means everyone knows this ship is going down so it don't matter what anything on it is worth. Marked to failure.
Wed, 01/26/2011 - 13:04 | Link to Comment Sudden Debt
Sudden Debt's picture

I'M STARTING A BIG BIG COMPANY CALLED "JUST AIR"

THE ASSETS ALONE ARE WORTH 500 TRILLION!!!

NO NEED TO CHECK, JUST BUY MY SOON TO BE LAUNCHED IPO AT A 99,99999% DISCOUNT!!!

 

Wed, 01/26/2011 - 15:36 | Link to Comment DisparityFlux
DisparityFlux's picture

 

Mr. Sudden Debt,

Hi there.

I am a market maker from Goldmans and WE would like to act as your underwriter, for a small piece of the action.

Regards,

Mr. Squid

Wed, 01/26/2011 - 23:11 | Link to Comment Trifecta Man
Trifecta Man's picture

"Among the many companies to go public in 1720 is—famously—one that advertised itself as "a company for carrying out an undertaking of great advantage, but nobody to know what it is"."

http://en.wikipedia.org/wiki/South_Sea_Company

Wed, 01/26/2011 - 13:04 | Link to Comment thepigman
thepigman's picture

Next time you get a margin call,

tell your broker to screw off as your

holding til maturity. Whenever that

may be.

Wed, 01/26/2011 - 13:05 | Link to Comment Tic tock
Tic tock's picture
.."This is an important first step improving US accounting as it relates to financial institutions."..  surely this would entirely depend upon what role those institutions are supposed to play in the economy? - owner of assets v. allocator of resources. There's mileage in this.
Wed, 01/26/2011 - 13:06 | Link to Comment assumptionblindness
assumptionblindness's picture

RIP, MTM.  It was nice knowin' ya. 

Ponzi is now officially referred to as "Global Economy." 

Phantom 'cash flow' accruals on defaulted loans.  Inflated asset valuations.  Off balance sheet liabilities.  ZIRP forever monetary policy.  Taxpayer funded moral hazard.  Daily stock market ramps and PM beat-downs.  Out of control deficit spending. 

Who would believe that all of these things would be allowed to go on and on and on and on and on and on for months/years/decades without any significant market corrections?  This is quite a paradigm shock to me...I really didn't consider that things could go this far.  It is time to consider that this may be just the beginning of a full blown in-your-face style of emerging economic fraud that is destined to become "the new normal."    

In summary, this is some really depressing shit!

Wed, 01/26/2011 - 13:45 | Link to Comment ToddGak
ToddGak's picture

Seems like we're witnessing the fiat/irredeemable currency system in its death throes, thrashing about and gasping for air.  All these measures you list are attempts to resuscitate the beast.

Wed, 01/26/2011 - 13:06 | Link to Comment gerd
gerd's picture

what's next, outlawing rainy days?

Wed, 01/26/2011 - 13:08 | Link to Comment brusty4
brusty4's picture

And here is William Isaac's letter, which blames Mark To Market for the near end of capitalism. Conveniently his email is also provided.

 

As well as his home address and phone number.  Oops. 

Wed, 01/26/2011 - 13:36 | Link to Comment plongka10
plongka10's picture

Well, I mailed him.

Wed, 01/26/2011 - 14:53 | Link to Comment Thisson
Thisson's picture

Or you can just email him at ballsack@comcast.com

Wed, 01/26/2011 - 13:10 | Link to Comment Quinvarius
Quinvarius's picture

Banks can never make a bad loan now.  They also mark up their books to indicate all loans are being paid in full with interest.  How in the Heck gold is under $5000 today I have no idea.  We just turned every bank into a mini-Fed QEing itself into infinity.

Wed, 01/26/2011 - 13:10 | Link to Comment Misean
Misean's picture

YES!!!!!!!!!!!!!!!!!!! That pile of used toilet paper just went up $3B on my books!

Wed, 01/26/2011 - 13:11 | Link to Comment orangedrinkandchips
orangedrinkandchips's picture

Believable. Totally believable. What would we expect? Honesty? We are past the point of no return. SOL. Shit outta luck!

USA=SOL

However, the honest bankers(oxymoron anyone?) who trade amongst themselves KNOW FULL WELL they put the Ass in these Assets and therefore know the real value.

So, they won't just take em and say..ok...no problem...here is your 1 pound of equity vs. your 1 pound of MBS assets you gave me. 1 for 1. No way. Behind the scenes they are like 3 to 1 if not more.

Facade. Complete facade and the beauty of it is that the bankers know and have to put up more collateral.

Wed, 01/26/2011 - 13:11 | Link to Comment cougar_w
cougar_w's picture

Banking will continue to be a pit of pirates and criminals until the day banking ceases to exist as a viable enterprise.

That's fine because I give banking 6 months to live, a year tops.

Wed, 01/26/2011 - 15:54 | Link to Comment Future Jim
Future Jim's picture

Then what?

Wed, 01/26/2011 - 13:12 | Link to Comment Sir Crappy Credit
Sir Crappy Credit's picture

Bill Isaac is a vapid, self-obsessed, douchebag.  He is also Vice Chairman of a bank with a horrendously shitty balance sheet.  Of course he is against m2m.

Wed, 01/26/2011 - 13:12 | Link to Comment Deathtöngue
Deathtöngue's picture

Wow.

And I thought the TSX Venture exchange was crooked.

 

Wed, 01/26/2011 - 13:43 | Link to Comment Salinger
Salinger's picture

|

Wed, 01/26/2011 - 13:16 | Link to Comment Jo
Jo's picture

What does IASB say on this - anyone know?

Wed, 01/26/2011 - 13:18 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

Just calm down.  Truth is truth.  

Only oil matters.  At some point they will try to print it, but even J6P will then understand.

There is an end to all this insanity and its name is oil

Wed, 01/26/2011 - 13:41 | Link to Comment cougar_w
cougar_w's picture

There was a guy once, decided to live forever. Just like that, he decided he would never die. Told everyone he knew I've decided not to die. They believed him. He sounded that committed. Everyone agreed he was going to live forever, they were really happy for him. Lot's of other people started thinking maybe they would like to live forever too. So everyone said I've decided to live forever just like that other guy.

They all died, or course.

Wed, 01/26/2011 - 13:19 | Link to Comment LooseLee
LooseLee's picture

Only in the good 'ole USSA! Woe to he who is part of this fraud when TSHTF; Bill Isaac et al.

Wed, 01/26/2011 - 13:24 | Link to Comment benbushiii
benbushiii's picture

This is an interesting event.  By not returning to mark to market, and allowing financial institutions to mark to cost, the great Ponzi continues.  So by this logic one should be able to never take losses (Madoff) and write checks for living expenses based on acquired value not market value?  This game of smoke and mirrors is becoming more incredible by the day; companies and economies are not improving on basics but on manipulated results!

Wed, 01/26/2011 - 13:24 | Link to Comment Dr. Gonzo
Dr. Gonzo's picture

I use similar mark to market accounting rules in my investment strategies paying my dollars for PM's. That's why I have so few dollars and so many PM's. My mark to market succeeds when theirs fails.

Wed, 01/26/2011 - 13:24 | Link to Comment Common_Cents22
Common_Cents22's picture

The banksters just keep telling everyone that the world will end if they have to face reality, hence the ripoff continues.

Like the move, The Village.  They brainwash the kids into thinking if they wander outside the fence into the woods, the boogeymen will get them.

Yes, we would have a difficult time if we let TBTF banks collapse but there would be strong hands stepping in and we'd rebuild from a stronger base.  Until then we will keep rising higher defcon 8, 9, 10.  The longer we go, the worse the fall will be.

The titanic is taking on water, just because they turn off the flood warning guage doesn't mean the water isn't still coming in.   So here we are, the quartet is still playing on the deck while the banksters are stealing gold jewelry from the passengers while the ship is sinking, just waiting for their helicopters to arrive.

Wed, 01/26/2011 - 17:01 | Link to Comment viahj
viahj's picture

as in another M. Night Shyamalan movie, Signs, where in the scene the preacher's wife has been pinned to the tree by the SUV.  she is technically "alive" up until the point they remove the suv.  sounds like QE and the "economy" of the financials entities.  maybe something there about oil as well.

Wed, 01/26/2011 - 13:25 | Link to Comment Dr. Gonzo
Dr. Gonzo's picture

I use similar mark to market accounting rules in my investment strategies paying my dollars for PM's. That's why I have so few dollars and so many PM's. My mark to market succeeds when theirs fails.

Wed, 01/26/2011 - 13:26 | Link to Comment Common_Cents22
Common_Cents22's picture

The banksters just keep telling everyone that the world will end if they have to face reality, hence the ripoff continues.

Like the move, The Village.  They brainwash the kids into thinking if they wander outside the fence into the woods, the boogeymen will get them.

Yes, we would have a difficult time if we let TBTF banks collapse but there would be strong hands stepping in and we'd rebuild from a stronger base.  Until then we will keep rising higher defcon 8, 9, 10.  The longer we go, the worse the fall will be.

The titanic is taking on water, just because they turn off the flood warning guage doesn't mean the water isn't still coming in.   So here we are, the quartet is still playing on the deck while the banksters are stealing gold jewelry from the passengers while the ship is sinking, just waiting for their helicopters to arrive.

Wed, 01/26/2011 - 13:26 | Link to Comment Dr. Gonzo
Dr. Gonzo's picture

I use similar mark to market accounting rules in my investment strategies paying my dollars for PM's. That's why I have so few dollars and so many PM's. My mark to market succeeds when theirs fails.

Wed, 01/26/2011 - 13:37 | Link to Comment Apply Force
Apply Force's picture

Glitch in the matrix - Gonzo & 22 above...

Wed, 01/26/2011 - 13:28 | Link to Comment Bob
Bob's picture

What a smarmy prick!

At least we now know formally who and what FASB works for:

FASB changed direction on how to value loans because of "strong signals from the board's constituents." 

So much for even the illusion of professional integrity.

Wed, 01/26/2011 - 13:35 | Link to Comment AnarchoCapitalist
AnarchoCapitalist's picture

FASB is a private institution. Their due process involves public hearings before a standard is declared. Banks made more noise than the rest of us. Don't blame FASB, blame the disinterested average american.

Wed, 01/26/2011 - 13:44 | Link to Comment cougar_w
cougar_w's picture

I'm pretty sure it's okay to blame the FASB. They just derailed an entire industry, eventually nuking themselves and their bank clients. That was kinda stupid.

Wed, 01/26/2011 - 13:44 | Link to Comment Bob
Bob's picture

They're accountants, for chrissakes.  This ain't rocket science--for them.  They know what the right thing to do is: They learned it in ACC 101.

Do you really think that if an equal number of non-banksters had weighed in against, it would have made any difference?

They have professional responsibility that is not subject to polls . . . and condoning professional malpractice is not an ethical option. 

Wed, 01/26/2011 - 14:08 | Link to Comment AnarchoCapitalist
AnarchoCapitalist's picture

True. The SEC can override any decision by FASB. IAlthough  doubt they will in this instance.

Wed, 01/26/2011 - 13:32 | Link to Comment benbushiii
benbushiii's picture

This is an interesting event.  By not returning to mark to market, and allowing financial institutions to mark to cost, the great Ponzi continues.  So by this logic one should be able to never take losses (Madoff) and write checks for living expenses based on acquired value not market value?  This game of smoke and mirrors is becoming more incredible by the day; companies and economies are not improving on basics but on manipulated results!

 

Wed, 01/26/2011 - 14:04 | Link to Comment Bob
Bob's picture

The most important thing is that the banksters can continue to sack the insolvent public companies they work for--or, as they call it, pull out hundreds of billions in "bonuses" . . . year after year after year. That's what they all worked so hard putting this shit together for.

Wed, 01/26/2011 - 13:33 | Link to Comment chockl
chockl's picture

There's also the perception that O'bummer is legally our president.

Wed, 01/26/2011 - 13:37 | Link to Comment tahoebumsmith
tahoebumsmith's picture

Just pinch yourself and see if you are really here. Seems like everything today is nothing more then a mark to whatever.Why would we expect any kind of transparency at this point seeing that almost every piece of economic data released today is nothing more then a skewed number made up to satisfy the need. Whether it be unemployment numbers, manufacturing data, foreclosure information, shadow inventory, oil supplies, gold reserves, POMO interaction or anything else they publish in the MSM, you know none of the information is accurate. So why would anyone expect the CRONIES to have to show their true value since all this manipulation is set forth to benefit them. They are in control and they will do as they please and hide whatever they want because they are running the show now. I was surprised Lloyd Blankfein didn't give the State of the Union address last night? Seems like it would have been more fitting to have hime up there surrounded by Ben Bernanke, Tim Geithner and Jamie Dimon. Let's all just face the fact there will be nothing in the future other then propaganda to cover the TRILLIONS of dollars they have been stealing since the crisis began. Welcome to your new America, the game is now being played by those who caused the crisis to begin with and if the real truth was revealed, the US and all it's CRONY banks and corporations would become insolvent overnight...

 

"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered."  Thomas Jefferson 

Wed, 01/26/2011 - 17:28 | Link to Comment TJ_is_annoyed
TJ_is_annoyed's picture

"I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them. "

"The democracy will cease to exist when you take away from those who are willing to work and give to those who would not."

"When the people fear their government, there is tyranny; when the government fears the people, there is liberty."

"A government big enough to give you everything you want, is strong enough to take everything you have."

Thomas Jefferson

"When the people find they can vote themselves money, that will herald the end of the republic."

Benjamin Franklin

"I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle."

Winston Churchill

Wed, 01/26/2011 - 13:38 | Link to Comment Dr. Porkchop
Dr. Porkchop's picture

Shit, I wish I could use mark to fantasy for my assets!

 

Would you believe my car I'm selling has appreciated 50% in value in the last 3 years? Buy now or be priced out forever!

Wed, 01/26/2011 - 13:41 | Link to Comment Buttcathead
Buttcathead's picture

It's all good... If you is  a zombie bankkster.  The other 95% of us will just hang out in our cardboard boxes.  Oh the Humanity !!! 

Wed, 01/26/2011 - 13:48 | Link to Comment lieutenantjohnchard
lieutenantjohnchard's picture

i view the email as a gift. it is yet another example of the desperation of tptb to cover up usa insolvency. looks like i'm gonna need a bigger safe to hold the bullion i'll be adding to the collection.

btw: as the cover up continues apace (hidden) the derivative horde on the bank books will get larger, and larger over time.

Wed, 01/26/2011 - 13:51 | Link to Comment Jim in MN
Jim in MN's picture

"the MTM monster that is the sole reason for the near collapse of capitalism in 2008"

I prefer to think that the MTM salve almost saved capitalism in 2009-2010....

 

...but didn't through the deliberate intervention of (fill in the rap sheet).

 

Lost Generation, here we come.  Remember, assume zero real returns on all assets and save accordingly.  That includes any pension and church funds you are in any way able to influence.

These people have doomed the economy.

Wed, 01/26/2011 - 13:54 | Link to Comment buzzsaw99
buzzsaw99's picture

The price is wrong bitchez!:

 

http://www.youtube.com/watch?v=QnJQ9U9pW9Q&feature=related

 

 

Wed, 01/26/2011 - 14:00 | Link to Comment Dr. Porkchop
Dr. Porkchop's picture

Well, I suppose if the banks never sell any of these toxic waste assets, they can claim they are worth whatever they want. The only thing keeping the charade going is the money printing, so the question is whether this new congress has the stones to bite it's master's hand. I'm not holding my breath.

Wed, 01/26/2011 - 14:30 | Link to Comment whisperin
whisperin's picture

Personal opinion: Isaac is full of shit. Excessive debt and leverage is what caused the problem. MTM just told everyone about the fraud and that the smartest guys in the room ran out of smarts.

Wed, 01/26/2011 - 14:41 | Link to Comment Winston Smith 2009
Winston Smith 2009's picture

"the smartest guys in the room ran out of smarts"

Not really.  They knew they effectively owned both our government and their regulators and would be bailed out by the taxpayer as a result.  At the very worst, they'd bail out with their diamond encrusted platinum parachutes.

Wed, 01/26/2011 - 14:36 | Link to Comment Crime of the Century
Crime of the Century's picture

A couple of months ago Chris Whalen told Eric King that it was time to do away with FASB. I found it a disturbing suggestion at the time, but now fully endorse the sentiment. What good are they, now that they have taken the $20 off the nightstand and put it in their cleavage. If you want GAAP accounting, look to the Williams' and Middleton's of the world. Oh, and all the effluent sequestered away? It will back up and out the pipes yet again - bank on it... 

Wed, 01/26/2011 - 14:37 | Link to Comment MiddleMeThis
MiddleMeThis's picture

This morning little birdies zipped around my room and created a beautiful gown for me, while seven little dwarves walked my dog, made me coffee and cleaned my house.  Then, after that I rode to work on a unicorn and found a pot of gold at the end of a rainbow.

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