TheBookkeeper

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    • Sun Oct 19th 05:25 AM | Rating: 0 0
      Commented on:
      Citigroup, Merrill Lynch, Citadel: Earnings Troubles All Around
      You said:
      "Tighten, don't loosen, accounting rules for financial institutions,"

      Surely you know, sir, that the rules that accounting must follow are the 650 year old double-entry book-keeping framework of rules, no? If banks had been accounting to those rules the nation would not be where it is today.

      "making them mark-to-market financial asset portfolios that specifically cannot be held on a long-term basis. Also clarify rules around consolidation of off-balance sheet vehicles,"

      There is no legal 'off balance sheet vehicle.' A book-keeper's job is to administer contracts with transparency to all entities that are parties to the contract, and that surely includes stockholders. If a vehicle is placed off the balance sheet then any obligations an entity has to that vehicle's contract belongs on the entity's balance sheet. This is book-keeping 101, which is to identify an entity's boundaries of contractual obligations. aka "rights to ownership."

      "forcing all but the most clearly dissociated entities to be recorded as on-balance sheet obligations."

      There is no "all but." There is either a contractual obligation or there is not an obligation. All else is fudged books. Banks are failing because they are not doing their bookkeeping. An accountant is not a bookkeeper. Accounting and bookkeeping interests are as different as the baseball pitcher and the umpire who is calling balls and strikes.
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    • Sun Oct 12th 11:43 AM | Rating: 0 0
      Commented on:
      We're in an Opacity Crisis
      Hi Cate,
      All that you hope to see in the way of transparency and control will return when business entities of every description return to a proper double-entry bookkeeping framework of rules. Such rules were customarily used by all business entities prior to computer software. The proper framework was never programmed into software. It will soon have to be because there is no other framework of rules that will get the present cultural collapse back on track and subject to the return to a constitutional government. The 650 year old double entry bookkeeping framework of rules supervised commercial trade since the middle ages. It is not only the de facto language of commercial trade. It is the only language of commercial trade.

      If you wish to put my words to a test, find the best accountant you know. Ask him or her to define a debit versus a credit. Send me their answer and I will send you the proper definition. You will be quite surprised to learn how little accountants know about the double-entry framework of rules.
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    • Mon Sep 29th 03:56 AM | Rating: 0 0
      Commented on:
      Can Capitalism Survive Its Latest Entanglement With Socialism?
      Does an economist know how double-entry bookkeeping works? It is today's problem, but I never hear it mentioned. Why? A credit default swap would never post in a proper double entry framework of rules.. It is an illegal entry because it commingles rights to ownership. Why is this never talked about?
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    • Thu Sep 25th 10:18 AM | Rating: 0 0
      Commented on:
      How to Spend $700B and Actually Solve the Problem
      This makes sense, and it approaches the solution used in the Great Depression, when commercial banks were formed. They could only lend county-wide. Banks became a service the citizenry that were restricted from gambling with the citizen's money that was on deposit..
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    • Thu Sep 11th 18:58 PM | Rating: 0 0
      Commented on:
      Ramifications of Fannie, Freddie On The U.S. Budget [Housing Tracker]
      With all this responsibility heaped upon We The People We The People need, most of all, to become literate in a proper double-entry bookkeeping framework of rules.The financial community, its accountants, and it auditors have not a clue as to how a proper double-entry framework of rules monitors proper accounting practices Fixing the bookkeeping is our first line of defense if our future is to lead into a recovery. We have yet to see all of the failures that are already in the pipeline.
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    • Sun Aug 17th 14:35 PM | Rating: 0 0
      Commented on:
      Is There a Margin of Safety in Financials?
      Wouldn't this be a good time to reevaluate how well double entry bookkeeping practices are being followed? The more closely the double entry bookkeeping rules are enforced the more transparent the financial facts. Why sit on the sidelines and watch for what is going to happen when a proper bookkeeping can be telling you the facts right in the here and now? That you don't know is proof that the rules are not being followed.
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    • Wed Aug 6th 07:52 AM | Rating: 0 0
      Commented on:
      Corporate Fraud + Government Intervention = Bailout Nation
      A good, unbiased commentary, for sure.
      However, the story misses one important point. The 650 year old double entry bookkeeping framework of rules has never made it into software code. Our present monetary system has no control language with which we can reconstruct its misuse. Without a proper framework of rules, that monetary system resembles the national museum in Baghdad in 2003. When no one is there to guard the treasure the attitude becomes, "If we don't steal it someone else will."
      Nobody will be convicted for these frauds because reconstruction the history of facts is impossible using today's financial data management systems. A proper bookkeeping is designed to record a reusable history. It's called "the audit trail." With an audit trail we could go back and reconstruct the facts in detail. Had we had that for the past 30 years, the problem, of course, would never have occurred because most of us only break the law when we are quite certain there is no accountable way to get caught.
      The problem is worse today than it was yesterday, and it will be worse tomorrow. The pattern of decay will continue until we decide as a citizenry that an accounting audit trail, that had served commercial trade for 620 years, would make a good idea to return to as soon as we possibly can.
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    • Sun Jul 20th 16:51 PM | Rating: 0 0
      Commented on:
      Short Sales: SEC Turns Back the Clock to 1931
      However you slice it a naked short bet that pays off is somehow collecting counterfeited money. And if the short bet loses money, who gets that profit? The broker? There is no way that such practices could be being posted to a proper double entry bookkeeping framework of rules.
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    • Wed Jul 9th 07:24 AM | Rating: 0 0
      Commented on:
      Clock is Ticking for Banks With Asset Quality Issues (Part II)
      Mindi did you ever consider that today's bank failures are brought on by bad bookkeeping. Are you aware that bookkeeping is a 650 year old language whose fundamental controls were abandoned when record keeping moved from paper and punch card systems to computer code? Do you know that accounting is a strategy run subject to that bookkeeping framework of rules? No accountant or economist that I know of, knows a proper bookkeeping's finely tuned rules. Bookkeeping is a piece of the banking story you would do well to consider.
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