Make Sure the Bunker is Well Stocked | WHAT REALLY HAPPENED


Make Sure the Bunker is Well Stocked

By Mike Whitney ( Information Clearing House)

– Robert Herz was forced to resign from his job as chairman of the Financial Accounting Standards Board (FASB) because he insisted that the banks assign a fair value to their assets. That’s not what you’ll read in the papers, but it’s true just the same. Herz was a major proponent of mark-to-market accounting, a simple means of determining the value of a bond or security by comparing the price of similar assets sold at market. In other words, Herz is a defender of universally-accepted accounting principles, which is why he was terminated, er, I mean, resigned. According to the Wall Street Journal:

“A new front has opened up in the war over mark-to-market accounting. Suddenly banks find themselves with an unexpected advantage in the fight over how they should value their vast holdings of financial instruments…

Mr. Herz had backed a recent proposal to expand the use of market-value accounting to banks’ loan books….Now, with Mr. Herz out of the picture, the future of the rule change may be in doubt.”

Pretty nifty, eh? As soon as Herz became a nuisance for the banks, he got his pink slip. Surprise, surprise. It’s just more evidence that the country is ruled by a Financial Mafia. Think of it like this: If you or I went to the bank to secure a loan using a dilapidated old bicycle and couple bags of empty cat food cans as collateral, we’d be ushered to the door by two beefy security guards who’d toss our sorry ass onto the street pronto. But when the banks use their putrid mortgage-backed sludge to borrow in the repo markets (or to conceal their true condition from investors), they get high-fives from bondholders and regulators alike. Herz threatened to blow the lid off the whole charade by exposing the extent to which the banks are doctoring their balance sheets and hiding the red ink on their books. Only he was sent packing (resigned?) before he got a chance to clean up the system. This is from the Huffington Post:

READ THE FULL ARTICLE & MORE HERE:

http://mycatbirdseat.com/2010/08/make-sure-the-bunker-is-well-stocked/

Comments

SHARE THIS ARTICLE WITH YOUR SOCIAL MEDIA