petyaczar

Mike Mayo's Seven Deadly Sins of Banking

mayo should learn the difference between AVERAGE mark don as a percent of all assets, AND MARGINAL mark down of nonperforming (impaired) assets.

If the top of my body is located at 129 degrees and the bootm half of my body is located at 68 degrees, then my AVERAGE temperature is perfect at 98 degrees. but the temperature at the margins really has nothing to do with the average. AND SO IT GOES with mayo's "average markdown of only 2%!!!! meaningless statistic. IMO

Time to Bury the Rotting Carcasses of Dead U.S. Banks

InnocentsAbroad, LOL

Nor do monkeys have opposing views.
Don't let Congress know, some of them, like Barney Frank and Pelosi may sense a corollation and earmark funds to study the relationship between lack of opposing thumbs AND lack of opposing views in monkeys.

$1,0000000000000000000...

or so should do for starters.

Time to Bury the Rotting Carcasses of Dead U.S. Banks

The politicians are the root cause of the banking crisis.
The change in accounting rules is the root cause of the banking crisis.

At its heart, this is an accounting crisis, that created a financial crisis.

Dump Mark to Market, eliminate FASB 157, reinstate Glass Steagall, and the uptick rule on short sales, and the "Crisis" will disappear, the banks and financial system and credit will recover and they will be just fine.

and it won't cost a dime! to get back to accounting sanity.

Mark to MArket = an idiotic accounting change that requires a willing owner (unwilling seller) to discount performing assets down to the point where an unwilling buyer might suddenly become interested.- and then pretend this is the true value of these assets. This is half xsss backwards.

THIS IS BEYOND STUPID. ITs the kind of 2+2= 1.3 logic that only a D/A politician could dream up.

IMO

How the U.S. Banking System Was Madoffed by the FASB

Henari,

Mark to Market is the Primary culprit and the root cause of our financial crisis. Unless one considers the idiotic, ignorant, arrogant, and totally out of touch politicians on both sides of the aisle in the U.S. Congress as the root cause.

They changed the accounting system. It became a 3 inning game scored by ever changing an irrelevant rules that had nothing to do with anything.

IMO

How the U.S. Banking System Was Madoffed by the FASB

Sarbanes Oaxley begat Mark to Market in response to Enron.
The U.S. Congress begat Enron when they deregulated essential gas and electricity and opened it up to speculators.
The politicians are the handmaidens of FASB 157
The Politicians are the root cause of this accounting crisis (FASB 157) that created a financial panic and the subsequent credit squeeze.

At its core, Mark to Market requires someone who has no interest in selling a performing asset (A willing owner and jence an unwilling seller) to discount said asset to the point at which an unwilling disinterested party (buyer) MIGHT become interested.

THIS IS BEYOND STUPID.

Kill Mark to Market and FASB 157, drive a stake thru its heart, cut off its head,burn the corpus delecti.
The politicians have used Mark to Market to pull off a Coup de Tat and destroy the capitalist free market system.

The politicians are using this "crisis" to expand government power as they bring America into a socialist state.

Never allow politicians to mess with the accounting system, else before you know it 2+2 is redefined as equaling 1.3 - or some such.

Never confuse accounting with reality.

Solve the root cause of this problem and the economy will be restored as the financial system is restored and markets will soar as credit begins to flow when confidence in balance sheets is restored

1)Get rid of Sarbanes Oaxley = Mark to Market
2)Get rid of FASB 157
3)Reinstate Glass Steagall Act
4)Reinstate the uptick rule on short sales
5)Increase margin on commodity futures trading to 50%
6)Make it illegsal for politicians to mess with the accounting system.

IMO

Trading the Mark-to-Market Modification (Updated)

MARK TO MARKET is the root cause of this financial catastrophe.
FASB 157 caused an accounting panic, that turned into a financial panic and is now the precipitating cause of the Greater Depression of 2008-200?
thereby enabling the politicians - who caused the G/D problem - to pull off a Coup deTat on the Free Enterprize System turning America inexorably on the road to Socialism and perhaps fascism. - See Germany 1936.

Kill Mark to Market, drive a stake thru its heart, cut off the head of Fair Value Accounting, burn the corpus delecti, so fasb 157 can NEVER EVER arise again and sucj the life blood out of our economic veins.

NEVER confuse Accounting with reality, NEVER allow the politicians -most of whom have never run a single G/D thing of any consequence, to meddle in the operations of companies.

Tell Nancy Pelosi and all those D/A politicians to
1)Turn on your Govt jets, fly commercial - center seat - in coach
2)No more junkets to ANYWHERE internationally or deomstically
3)Stop messing with the free enterprise system.
4)Make abscounding with Social Security Trust funds a hanging offense.

Wall Street Breakfast: Must-Know News

doubleguns

You are of course right, I refered to this in my comment

"Its a big G/D "Do-loop" in computer speak. a self reinforcing death spiral."

In the computers when you have a Do-Loop = a badly written bit of code that creates a constant useless circular logic of calculation, you DO NOT redesign the computer hardware around the DO Loop you REWRITE the code so it functions properly within the system

You do not want an accuonting system that makes things look better than they are in good times, and worse than they are in bad times. In electronics, such circuits are known as positive amplifiers, they amplify in the same direction as the original incoming signal. You want something that will smooth out the discontinuities providing essential ballast to the balance sheet

IMO some of these folks are making the classic mistake of thinking the accounting system IS REALITY, No, the accounting system is supposed to characterize and represent a working version of reality. just as statistics are meant to represent a distribution of outcomes in a manageable and workable and understandable fashion. Statistics are never meant to represent any individual outcome at any individual point in time.

This will be a disaster for our economy and Obama has no experience and has shown no real understanding of the root cause of the financial panic and resulting credit crunch that has arisen out of the slime of this accounting problem. Kill mark to market, eliminate fair value accounting, go back to the accounting rules that haved served us so well since the first GReat Depression and see how quick;ly these financial problems dissipate.

In the "old days" companies got to decide when to write down or otherwise write off nonperforming assets. NOW regulators get to decide when to write off or otherwise write down performing assets. How the hll does a company manage that?

IMO

Wall Street Breakfast: Must-Know News

John,

Your comment re mark to marke "being good" is a theoretical assertion.
Look around you at the realpolitik of what this D/A mark to market has created. The village is burning !! There is no stability in balance sheets from quarter to quarter, there is no trust in the financial system and so there is a credit contraction.

Its a big G/D "Do-loop" in computer speak. a self reinforcing death spiral.

Process wise it has gone like this

1)The Government encourages leverage and "creative financing"
2)The Government changes the accounting rules now requiring mark to market
3)Credit contracts - market prices drop as forced sales occur.
4)MtoM forces further erosion and raises required reserves.
5)Putting more money into reserves - has a deleterious effect on profit- eliminating it.
6)The "Balance sheet" poor institutions have to petition the very government that caused the problem to "bail them out"
7)The govt transfers green paper printed at taxpayers expense to shore up the eroded balance sheets the government mtom created.
8)The government takes over operational control of the companies it has "saved"

Seems to me this is the 21 st Centiury version of the old Vietnam expression "We had to burn the village in order to save it"

The above statement of process IS NOT hypothetical It is ALL DOCUMENTED FACT.

Your prescription of a "public CDS exchange" is in my view euivalent to putting a band aid on a carcinoma. - hides the root cuase, doesn't solve the problem -merely allows it to fester.

Kill MTOM, fair value accting, reinstate Glass Steagall, reinstate the uptick rule, go back to the accounting rules that have served us so well since the first Great Depression. and watch what happens as stability returns, markets recover, and credit is once again freed up.

Don't do it, and we will be facing the Greatest Global Depression in history AND in the words of Martha and the Vandellas there will be "No where to run to baby, no where to hide" This to be followed by socialism, elimination of the free market system, and the emergence of a truly Big Beother" government.

IMO

IMO

Wall Street Breakfast: Must-Know News

The politicians caused this accounting meltdown, which caused the financial metldown, which caused the credit crunch, and will result in the Great Depression of the 21st Century.

The politicians caused this fiasco with their D/A Sarbanes Oaxley and the credit "reform" (sic) of 2004. with the institution of Mark to Market so called Fair Value accounting (sic).

So called fair value accounting destabilized the balance sheets of both borrowers and lenders. No one can trust anyoune's balance sheet anymore from one quarter to the next.

Go back to the accounting system that served us so well since the Great Depression, reinstate the Glass Steagall Act and the uptick rule on short sales. Drive a stke thru the heart of Mark to market accounting, cut off its head, and burn the corpus delicti and the financail markets will recover. IMO

Te politticians have pulled off a Coup DeTat overthrowing free market capitilism replacing themselves as rulers by fiat. And they managed to convince most of you torch bearing villagers to storm the wrong castle in an attempt to blame the financiers,bankers,tra... who are merely following the compulsory edicts of the G/D politicians.

You torch carrying villagers deserve the serfdom you will so surely achieve over the next few years. IMO

Four Banks to Bank on - Barron's

A sage piece of macroeconomic advice I got from my Harvard Finance Professor, oh so long ago before the U.S. government was running the economy and telling corporations whether hey could own jets, or how their people should be paid, who they must hire, or how they should travel.

"when moving into good times = buy equities, become a partner in good bsinesses, and when moving into bad times, buy hi quality investment grade BONDS,, be a creditor to good businesses, but not their partner"

My old Northwestern Finance Professor also had sage financial advice.
He said, "When it comes to finance and investing there are only 8 considerations- everything else is mousenuts"

1)Ilegal/ethical Is it ok? -what would mom & dad say if they found out ?
2)How much will my profit be how much?
3)When will I get my return (capital + profit) how soon?
4)How safe my return and my money? how certain?
5)In what form will I get it (cash,equity,goods,ser... how?
6)Tax considerations what's the govt's take?
7) Does it sound too good to be true? how credible?
does it pass the "smell test?"
8)Do you really understand the deal? can you explain it to mom & dad?

He also said, "Never entrust your funds to an individual, better to rely on organizations, as individuals may come and go - Madoff - but the organization remains in place and responsible - Vanguard,Fidelity etc.

How true these words were. They ring more true today than ever. AND we didn't need computers to understand or figure out these financial and economic axioms.

IMO, on this basis I wouldn't touch the banks with a 10 foot poll or a 5% depreciated dollar,

Mortgage Brokers, RIP

YOur comments are superficial and specious.

In an age when anbyone can get a real time stock price quote on TV or over the internet or phone. Then using your false logic, why should stock brokers and market makers exist! You answer must be they should no longer exist.

Banks and investment houses talk donw and dis brokers because brokers ARE THEIR COMPETITION and the banks do not like competition.

I would suggest that the BANKS are the dinosaurs in the 21 century financial equation. A bloated bunch of miscreants with outdated policies and fee structures situated in concrete slabs cheating people out of their money on a regular basis by paying zero percent on depositied available funds and overcharging on the loans made with those very same funds.

I minimize my exposure and business dealings with banks down to an absolute minimum. Give me a competent independent broker EVERY TIME. Whether that be mortgages, real estate,insurance, or stocks.

Whio cares what those dinosaurs- the banks and investment houses- have to say dissing their competitors? All such entrenched 19th and 20th century financial infrastuructre should go away and be replaced by the free flow and availablility of information and capital utilizing independent agents (brokers) and the internet. etc.

You are an "apparchilk" of the past.