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Paulson's Plan Fails to Understand the Problem; Madoff Is a Perfect Example

I've lost confidence in Paulson and Bernanke. The solution is right in front of them, but they still don't do it.

Everybody knows that FASB 157 is dangerous and pro-cylical. Banks and other consumer finance companies do not want to sell their loans because the spread is wide. The spread is wide, because of credit uncertainties and forced liquidations or write-downs because of FASB 157. It's a vicious circle.

The FASB accountants can easily suspend FAS 157 and come up with new accounting rule to mark-to-market every single items on and off balance sheets for information purposes and liquidity purposes. That will provide transparency as investors demand it without destroying regulatory capital of all financial institutions.

Without FAS 157, securitization will return to normalcy, and banks will make loans again.

Bernanke and Paulson made a huge mistake allowing Lehman fail. That was why the global financial system imploded. Now, these people lack skills and foresight by supporting FAS 157. The results show!

JPMorgan Chase: Poisoned by Bear's 5,000 Counterparties

JP Morgan needs to disclose the cash flows on the level 3 assets plus all the statistics regarding delinquencies, foreclosures, net charge-offs, interest rates, insurance, maturities, geographic concentrations, single issuer concetrantion, and average lives, etc. These data will help to allay fears and uncertainties. Not all level three assets are toxic.