Wednesday, October 01, 2008
Lipstick on a Pig?One of the screwball ideas floated by Republicans over the past few days is the notion that we can fix the current crisis by a "stroke of the pen" as one Congressman from Texas explained on last night's Rachel Maddow show. All that's needed is for SEC Chairman Christopher Cox to kill "mark to market" accounting. If this happens, the crap sandwich we were offered last Monday will have grown into a full poo poo platter.
"Mark to market" accounting requires banks to show their investments at fair value when they present financial statements to the investing public. By killing mark-to-market rules, Cox would enable banks to show so-called "toxic" mortgage-backed securities at whatever value the banks paid for them, rather than their fair value. In other words, they could publish financial statements that vastly overstated the real value of their assets. It is like a Viagra-induced four-hour-long call-your-doctor orgy for the financial statements.
Talk about lipstick on a pig! This is bacon-boy's full salon treatment.
Here's a letter from the Center for Audit Quality laying out the common-sense arguments against this ridiculous Republican proposal. At the bottom of this crisis, one of the key issues is trust -- over the past few weeks we have seen a credit squeeze that is driven as much by a lack of trust and transparency as it is a lack of liquidity. Now is not the time for the SEC or Congress to encourage even less transparency and honesty in financial reporting.
Cooking the books is not a strategy for building trust and confidence in our financial markets.
Technorati Tags: Bailout Bill, Crap Sandwich, Lipstick on a Pig
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No subject for immortal verse
That we who lived by honest dreams
Defend the bad against the worse."
-- Cecil Day-Lewis from Where Are The War Poets?
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