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Norm's Financial and Business Thoughts
This blog contains comments about a broad array of financial and business topics affecting the U.S. economy, both from national and international sources. They include events in the U.S. and other countries as well. Norman has had a long business career as a financial and insurance executive and business consultant. He is a both an actuary and CPA.
Norman E. Hill is the author of:
Winner and Final Chairman
An Expose of an American Corporate Power Struggle and $138 Million Golden Parachute
If you read Barbarians at the Gates or followed Enron, you'll enjoy this fictionalized version of a corporate power struggle. It shows how a visionary business plan, not followed through, and never-ending corporate politics, undid a promising turnaround. read more
by Norman E. Hill ~ 0-7414-4773-8 ©2008
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Disclosure, Not Destruction--Mark to Market Accoun...
Sunday, July 05, 2009 |
Note to State Legislators
Thursday, July 02, 2009 |
Will the Real Market Value Stand Up
Sunday, June 28, 2009 |
Market Values and Accounting/Economic Crisis - The...
Thursday, June 25, 2009 |
Economic/Accounting Crisis Update
Wednesday, June 24, 2009 |
Economic Crisis is Really an Accounting Crisis
Monday, June 22, 2009 |
Trial Balloon re Gov't Confiscation of Private Ret...
Saturday, June 20, 2009 |
Developments in Mark to Market Accounting
Sunday, April 26, 2009 |
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Economic/Accounting Crisis Update
Recently, I wrote about the current economic crisis, stating that it was primarily caused by bad accounting, that is, from SEC imposition of fire sale accounting to temporarily illiquid balance sheet assets not permanently impaired.
The newly passed Senate Bailout Bill includes a provision calling on the SEC to investigate mark to market accounting. However, the recent SEC release 2008-234 resolves the issue. It states that "...when an active market... does not exist... estimates that incorporate ...expectations of future cash flows... is acceptable." Although couched somewhat in bureaucratic cover-up, this can be construed as an admission of the bad accounting to date that caused incredible market havoc and the regulatory OK to scrap it immediately.
I must add one more word on Paulson. The New York Times recently uncovered how an AIG bailout conference included only regulators except one--a representative from Paulson's old firm, Goldman Sachs, and, not coincidentally, a major AIG trading partner. This sounds like an incredible conflict of interest, which should disqualify Paulson from receiving any amount of blank check to buy up financial assets. The man is an incredible albatross.
In short, I urge you again to contact your Congressmen to urge them to vote against a bailout bill and propose, instead, some form of federal insurance of assets-together with an end to fire sale accounting of non-impaired assets.
This crisis can be solved without a bailout on the backs of taxpayers.
You can see the first part of the article on EZine Articles.
Norman E. Hill, FSA, MAAA, CPA
Books By Hills
"Winner and Final Chairman" Labels: accounting crisis, bailout, economic crisis, firesale, Mark to Market, noralyn, norman e hill, SEC
posted by Norm Wednesday, June 24, 2009
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