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This video has been seen by about 500 thousand people. It should be seen by 500 million. The Economist's Democracy in America blog says "this is what winning an argument looks like". I couldn't agree more. I know not all of you agree with his message, and that's fine. We can agree to disagree. But you should still take the time to watch the video.
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Hey, congrats to the banks. You've officially cowed not only Congress but now FASB which has decided that you can continue to value assets however the hell you feel like. I mean, it's not like it's ever gotten us into trouble before, right?
It is ridiculous that banks can continue to value mortgage loans at 100% of their value on their books when it's clear to everybody and their mother that there is no way that the assets are worth nearly that much. Banks don't have to take a loss until they actually sell an asset, allowing them to manage earnings pretty much at will.
Ridiculous.
Via WSJ.com
The banks got what they wanted. Accounting rule makers on Tuesday dropped a plan to require banks to value loans using market prices.
That means investors will remain reliant on banks' own views of the worth of their assets. Those judgments proved seriously flawed during the financial crisis and left many with insufficient capital. Taxpayers, who as a result were called upon to bail out numerous institutions, also are left more vulnerable.
The Financial Accounting Standards Board's original proposal, put forward last spring, had called for banks to reflect market values in the total worth of their assets, which would affect their equity. Changes in market values, however, wouldn't have immediately affected profit, nor would it likely have been reflected in measures of regulatory capital.
Banks generally oppose the use of market prices because, they say, it makes their results more volatile. Their intense lobbying efforts against the proposal likely got a leg up after FASB Chairman Robert Herz, who had supported the plan, unexpectedly departed in August. FASB cited strong opposition it received in public comments in changing course.
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I'm going to miss him once he really ticks Kenny off and he's gone.
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I think that Professor Caron is thinking too narrowly with this one. Not only is the 1040 toilet paper a good Christmas gift for a tax person, but think of the sales to the Tea Party crowd!
http://taxprof.typepad.com/taxprof_blog/2010/12/christmas-gifts-2.html
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If someone asks you what is wrong with our tax code, here you go (from the WSJ). I'm not against the agreement (other than it exploding the deficit again) but I am against a system where I can't predict what I or my company pays in taxes in a given year until December. I'm a CPA that works in corporate tax, so it's not like I'm an idiot when it comes to this stuff.
In the late 1990s, there were typically fewer than a dozen tax provisions that had just a limited lease on life and needed to be renewed every year or so.
Today there are 141.
Now Congress, taking up a deal worked out between the Obama administration and Republican leaders, is poised to turn the whole personal income-tax system into something of a temporary structure. The plan embraces a broad range of provisions—an extension of Bush-era rates, a new estate-tax formula—but for only two years. A payroll-tax cut in the bill is for a single year.
This means that if the compromise passes largely intact, the U.S. will have no permanent regime governing levies on salaries, capital gains and dividends, the Social Security tax, as well as a slew of targeted breaks for families, students and other groups. This on top of dozens of corporate-tax provisions that already were subject to annual renewal.
via online.wsj.com
