sphillywilly

Goldman's Unexpected Earnings; Government's New Foreclosure Solution - Cause for Pause

GS's 1Q earnings include the FASB rule change removing mark to market accounting on mortgage toxic "assets". The new rule was allowed for the 1Q. It's a scam/farce.

You will see this trend for all banks reporting their 1Q results. Just wait. ALL of them will beat the estimates because of this BS rule change.

It's supposed to trick you into believing that the banks are now suddenly healthy with strong balance sheets. The mortgage backed assets have not changed in value. If anything, they are falling in value as foreclosures are rising. They are also ignoring their commercial real estate losses and not even recognizing them.

The banks actually pressured the FASB to allow them to retroactively use this scam rule to apply to PREVIOUS 2008 earnings as well. This would have allowed them to post even more fantastic "one-time" adjustments by marking up the values of these trash assets.

This announcement does include this rule as the pressured FASB agreed to the following...

"..FASB rejected requests from banks to let them apply the fair-value change to their year-end financial statements for 2008. While the new standard takes effect for earnings reports filed at the end of June, FASB said COMPANIES COULD APPLY IT TO THEIR FIRST-QUARTER FINANCIAL STATEMENTS. .."

www.bloomberg.com/apps......

This is an accounting scam people. Do not fall for it. You will see it for all of the banks who will report over the next several days. It assumes incorrectly that housing prices will go back to their bubble levels and everything will be fine. It's not realistic..

www.patrick.net

The current value of these assets is 30-40 cents on the dollar, not the 90 cents that they are now allowed to post with the rule change.

We are talking about the health of our banks and financial system here! Instead of our "leaders" getting tough with the banks and allowing the bad actors to fail while strengthening the good banks, they decide to cover it up and use accounting rule changes to give the false impression of strength in order to appease their banking buddies. I guarantee that the "stress tests " will show that everything is fine.

What Can Possibly Explain the Price of Oil?

"..Israeli strike is likely and it will be a good money making venture.."

Good money making venture huh? Hey Mark Twain, I hear there's an opening at the Natanz nuclear power plant , night shift. Good pay too! Maybe you should check it out.

A war with Iran would be disastrous for the US. BushCo already is strong arming Iraq for 80% of that nations reserves. Why do we need Iran? Their production has been in decline for years and is really only a relatively small producer today. Is it possible that Iran is actually running out of oil (peak oil) and may actually need nuclear power?

MAD would apply to them as it did to the USSR during the cold war. The one's in charge of Iran are not suicidal maniacs like AlQaida who will die for their cause. The Iranian "threat" being posed by BushCo is really just another resources grab by the US.