Banksters Increase Reserves by Changing Accounting

[jclay2]

Apparently, FASB is under complete control of the banksters. At their request FASB has eliminated mark to market for hard to value less liquid assets. The banks will now magically have more reserves to loan. The problem is that the old rules actually aloud financial institutions to use internal information to value illiquid assets. If banks just wave a wand and start lending reserves that should be used for bad assets, we might actually be prolonging/creating another banking crisis.

Here is a link from marketwatch: http://www.marketwatch.com/news/story/Accounting-standards-now-determined-mob/story.aspx?guid={43B3FDAE-FCFB-46FE-A0AC-6B232C945510}

 

[StilesBC]

This is going to backfire. Less transparency = Less confidence.

Their foolishness is so predictable that it makes me want to cry.

 

[TruthisTreason]

From my limited knowledge of the MTK problems, this doesn't resolve the issue completely. Although, it does help some banks on some assets, it doesn't resolve all the problems. Maybe, someone else can explain it better.

This guy gave a good talk about FASB at the Mises Inst. http://mises.org/multimedia/mp3/ASC2009/ASC09_Miller_2.mp3

 

[ChooseLiberty]

Banks can now move all their assets worth $.20 in the open market to "investors" (hedge funds) at $1 with the "investors" putting up $.10 and the taxpayers putting up the $.90 difference even if SHTF.

Banks - do great - can't lose
"Investors" - do great - virtually can't lose
Taxpayers - completely screwed by the above

I see a trend here.

Still don't believe there's a Central Bank/NWO conspiracy?

www.ronpaulforums.com/showthread.php?t=186685

 

[Met Income]

Don't like the rules? Make up new ones.

 

[MrNick]

This is going to backfire. Less transparency = Less confidence.

Their foolishness is so predictable that it makes me want to cry.

In the long run yes, but for now I think the morons will eat it up and C, JPM and BAC will go up a lot before they go back down.

 

[Ilhaguru]

Mark to market rules are new. Well, fairly new.

 

[tmosley]

Banks can now move all their assets worth $.20 in the open market to "investors" (hedge funds) at $1 with the "investors" putting up $.10 and the taxpayers putting up the $.90 difference even if SHTF.

Banks - do great - can't lose
"Investors" - do great - virtually can't lose
Taxpayers - completely screwed by the above

I see a trend here.

Still don't believe there's a Central Bank/NWO conspiracy?

www.ronpaulforums.com/showthread.php?t=186685

Yeah, except that those assets aren't even worth 10 cents. The investors who buy them will likely see the values decline rapidly, and they take the first hit (ie if the investment goes down 10% they are wiped out).

Even with this parlor trick, they are still going to go bankrupt. The only things backstopping them are the government's bailouts. Once those stop, even for a week, they will all fail catastrophically.

 

[ChooseLiberty]

They're worth something. Even a penney.

The funds/banks will put up .1 penney and the taxpayer covers the rest.

It's a no-lose situation for the same money people that caused the "crisis".

Yeah, except that those assets aren't even worth 10 cents. The investors who buy them will likely see the values decline rapidly, and they take the first hit (ie if the investment goes down 10% they are wiped out).

Even with this parlor trick, they are still going to go bankrupt. The only things backstopping them are the government's bailouts. Once those stop, even for a week, they will all fail catastrophically.

 

[Wulfslæd]

Will this change loosen up credit, which would drive mortgage rates down, which would entice more people to refinance, which would lead to more discretionary spending, which would give a boost to the economy? That's when the inflation should start.

 

[ArchPaul]

Will this change loosen up credit, which would drive mortgage rates down, which would entice more people to refinance, which would lead to more discretionary spending, which would give a boost to the economy? That's when the inflation should start.

Thing is most homes are under water or close to it. And if that doesn't do it the lending standards are strict now, and last, the bank may not even have the money to lend...
But in reality, if someone has to refinance just to get discretionary spending, the bank will probably consider them too high risk and not refinance...