Friday, July 24, 2009

Congress Is A Joke...But FASB not laughing.

Some brilliant journalistic work from Bloomberg and surprisingly WSJ.

Bloomberg's Jonathan Weill stating that FASB had enough with accounting fraud so they are taking a tougher stance with mark to market practices.

WSJ finally gets it right after a year of having their head in the sand.

To summarize, after the mortgage meltdown, most financial firms knew that the losses they were carrying were catastrophic, so instead of trying to rationally solve the problem, they needed to protect their bonus's so they went after attacking a key accounting rule. That rule was mark to market accounting.

These firms then started a huge lobbying campaign that persuaded key members of Congress to whack FASB.

FASB subsequently caved in.

Please see earlier posts on FASB

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