What if I told you that terrorists were ruining the economy and our own government is letting them? No, this is no wacky ‘Loose Change’ type conspiracy theory, but exactly what is going on with FAS 157.
What is FAS 157, you ask? It’s a bunch of accounting rules that say that banks and other financial institutions have to account for their assets according to what they’re actually worth. That’s ridiculous. If I have a piece of dreck company worth only $4 billion why should I have to put it on my books as $4 billion? I know that at some point I’ll be able to sell it to Leon Black or some other sucker for $12 billion.
The FAS stands for the Financial Accounting Standards Board. They are among the most useless people on the planet and they are standing in the way of patriotic American commerce. Imagine the lamest Star Trek-watching nerds hellbent on punishing the successful and cool kids with their nitpicky rules.
I propose another rule standard for valuing a company’s assets that reflects my abilities to sell companies like hot cakes. I call it the SAS 69 rule. That means that an asset should be valued at whatever I think the highest price I could sell it for within the next 69 days. That’s much fairer and a more accurate reflection of the current possibilities when you trust in the genius of The Steve and our army of helpful souls at the Blackstone Group.
joda:
Beautiful...
7/3/2008 11:39 PMAvi:
Your an idiot. Accounting rules may be tedious but they are certainly neccesary for a liquid and efficient capital market. Allowing companies to value assets at 'what they think they can sell it at' is of course absurd and begging for fraud and outright deceipt not to mention the regular fallacies of people (60 days before Bears Stern was sold how many people would have correctly guessed the most they could get for that asset?).
But you know all this so why would write such an abusrdly inflamatory title and such a substanceless and useless blog?
7/11/2008 10:24 AMBen Bernanke:
Bitch please. Mark to imagination is the way of the future. Me and Paulson are working on the new standard, which is Mark to Schwatrzman, mark to imagination is too limited, we need to think bigger, no one thinks bigger than Schwartzman.
If you'd think bigger, you wouldn't still be poor.
7/14/2008 12:03 PMtom:
I dont know if this is a tounge-in-cheek article or not, because it has elements of truth and hypocrisy. What it really does is skirt the issue. Its not the issue of whether or not assets shoud be properly valued. The real issue is the methodology used to arrive at those prices. The "toilet bowl gravitational" method that FAS 157 (also known by it's proper name of exit pricing) and the various clarifications and interpretations, or a more rational form. The 'exit pricing' scheme is the culprit. It says that in an illiquid market, where quasi-loan types of assets ( I like to call them "Polish Stamp Collections") are being forced-sold, aka margin calls, then you must use that price. Even if it's 2c on the dollar in a fire-sale, absolute auction. Even loans that have but a few interest payments left, but are going to pay out in total, the bids are lower than the cash's present value because the guy who would buy it will be unable to unload it at any higher price. He will be subjected to the price of the next round of asset sales, and the application of FAS 157 to make him take a loss. The fear that this engendered in the market place has led to the morass we are in now.
11/20/2008 10:56 AMSteven Spielberg:
Hehehe!
Even I can understand that this accounting rule is the scariest of all. I cannot even imagine how to create a monster that has a n equal destructive power of this rule.
I think the useless bean counters of FASB want to seize power, therefore they have to destroy the world first to show off their power.
12/1/2008 6:10 PMJeff Skilling:
What about my mark-to-market accounting?? Don't you guys remember how fucking smart I am!?
12/31/2008 6:09 PM