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1. 4 chenier says:
   October 16th, 2008 at 10:00 pm

   I wonder what Thomas Jefferson would make of lobbyists, and the lunacy at present working its way inexorably down the drain of voodoo accountancy.

   You may recall that the Mother of All Bailouts was initially directed at buying up ‘Troubled Assets’ from the Troubled Banks which had acquired them; that plan foundered rather rapidly on the fact that no-one had a clue what the damn things are worth. The money markets ground to a juddering halt, and only began to inch forward very slowly when the British plan, which focused instead on putting capital into the Troubled Banks was adopted here, in the EU and subsequently in the US.

   Markets depend, above all, on confidence.

   Sadly, the ingrained belief that the world is full of suckers who will believe anything you tell them has a grip so tight on the souls of US politicians that they are easy prey for the usual raft of lobbyists. You remember the lobbyists, don’t you? They were the people who persuaded the Senate that the Mother of All BailOuts was completely useless unless it included provisions to assist the manufacturers of wooden arrows in their time of need.

   Apparently oblivious to the derision heaped on the US as a result of that one the lobbyists are peddling their snake oil, and this time it’s about voodoo accountancy.

   Again.

   Actually, that should be yet again, because they’ve had a number of bites at this cherry and it’s still hanging there. Their theory is that if you take a cheerier view of the Troubled Assets then everybody will be happy, the suckers, sorry, people will start giving them lots of money again, and the lobbyists will get paid.

   So, the lobbyists are pushing the pols, both in the US and in Europe, and the pols are pushing the accountancy bodies, and it’s reached the stage where, as Floyd Norris in the New York Times puts it:

   ‘the International Accounting Standards Board gave banks a partial victory, by telling them that they can stop recording changes in fair value of some assets, and make that retroactive to July 1.

   That move, on Monday, was done outside of normal procedures, reflecting political pressures. But it was not good enough for the banks. The European Union has now told the I.A.S.B. to make further changes by the end of the month.’

   And if they don’t make the changes the pols want, it seems likely that the pols will simply tell banks they can do what they want anyway.

   I sometimes wonder whether there is a special form of insanity which takes over when people who have lived deeply priviliged lives suddenly find themselves face to face with the possibility that they are no longer Top Dog, or even Top Cat.

   Both the US and Europe depend on borrowing vast sums of money from the people who have it, and the people who have it do not live in Europe or the US. They were the people laughing in derision at that vital wooden arrows provision, and they are the people laughing in derision at the idea that taking a cheerier view of Troubled Assets is going to make those assets more marketable.

   Sarah Deans and Dane Mott, the accounting analysts at JPMorgan Chase put it slightly more politely:

   ‘“In our view, investors should be very concerned. We believe that the E.U. proposals for further changes to IAS 39 would be unworkable, would reduce the quality of companies’ financial reports, and therefore would be very damaging for investor confidence.”

   You may recall all those people lining up to tell us about the crisis in confidence in the financial markets, and warning us of the dire consequences of banks and other financial concerns refusing to loan money to each other.

   It gets even direr if the investors with the money refuse to loan not only to the banks but also to the governments. Which is why Switzerland is having nothing to do with the snake oil and is bailing out their banks the hard way. Admittedly, it’s bailing out UBS with the Feds money, but that’s because UBS was sitting on vast amounts of US toxic debts. And that in turn was why Credit Suisse was able to raise $8.8 billion from “a small group of major global investors”.

   Switzerland is not, of course, a member of the European Union…

2. 3 Jack McJiggins says:
   October 16th, 2008 at 9:42 pm

   Cheese & chives for chenier?

3. 2 Jack McJiggins says:
   October 16th, 2008 at 9:35 pm

   ‘homeless on the continent their fathers conquered’

   Serves them bloody right for making so many tedious Westerns full of wailing Injuns on horses chucking spears.

4. 1 coco says:
   October 16th, 2008 at 6:43 pm

   Can’t argue with him at that point!

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