Tommy -
I should hire you as my agent or at least forward your very kind
posting to some of my editors!
Glad to help.
Listen, you know Wall St. worked very hard for years at making the
processes there as opaque as possible - through escoteric jargon and
a lot fierce gatekeepers. When you got someone to speak on the record
they'd talk a mile a minute. I'll never forget the Merrill Lynch
spokeswoman who had a fit, after one of these conference calls, when
I said don't worry about my being accurate I just taped it all. She
was furious!! Now why wouldn't they want you to be accurate? So they
can dismiss the whole story when you get something wrong?
Part of the reason why they went to these hugely complex instruments
was because market reforms had removed so many veils that the markets
were becoming transparent - perish the thought.
Maureen
--- In AsburyPark@yahoogroups.com, "justifiedright"
<[EMAIL PROTECTED]> wrote:
>
> Mo,
>
> I did read the post that Frank made for you.
>
> I wasn't even aware of the issue until you posted it. Thanks for
> doing so - it's an interesting insight.
>
> For those of you who don't know, this business stuff is Marueen
> Nevin's area of journalistic expertise.
>
> That's why I asked her the questions.
>
> We're futunate to have folks like her on this board with expertise
> in such an important current event (wish she was back on the
radio).
>
>
>
>
> --- In AsburyPark@yahoogroups.com, "radio881gal" <restore881FM@>
> wrote:
> >
> > To my knowledge these are actual trades that are reported in
these
> > indices, not assigned values based on aspects of the assets or
> what
> > an insurer would give you in an accident.
> > These indices are a recent benefit to the market, since OTC
> products
> > have typically lacked transparency for this as well as other
> reasons.
> > Did you read the open letter from the auditors that Frank posted
> for
> > me yesterday?
> > Maureen
> >
> > --- In AsburyPark@yahoogroups.com, "justifiedright"
> > <justifiedright@> wrote:
> > >
> > > Are creditex and markit reliable? Do people routinely take
> issue
> > > with their amounts (like I do with blue book on cars?)
> > >
> > >
> > >
> > > --- In AsburyPark@yahoogroups.com, "radio881gal"
<restore881FM@>
> > > wrote:
> > > >
> > > > Tommy -
> > > > Not sure if here you're referring to my post about the Wall
> St.
> > > > bailout.
> > > > If you are, I'd want to say that there are indexes by
Creditex
> > and
> > > > Markit, which contain traded prices on Credit Default Swaps
> > (CDS)
> > > > and Collaterolized Debt Obligations (CDOs). Paulson doesn't
> want
> > > > taxpayers paying the low prices the professional traders are
> > > > currently paying for these. He's already said he wants
> taxpayers
> > > to
> > > > buy these assets at future maturity rates. Wasn't that what
> > Asbury
> > > > Park residents wanted and didn't get in the redevelopment and
> > > rehab
> > > > zones?
> > > > Maureen
> > > >
> > > > --- In AsburyPark@yahoogroups.com, "justifiedright"
> > > > <justifiedright@> wrote:
> > > > >
> > > > > How do you use Mark to Market accounting when dealing with
> an
> > > asset
> > > > > that is not widely traded? You have no data upon which to
> set
> > a
> > > > > value.
> > > > >
> > > > > Also, when a firm goes under and is selling off their
assets
> at
> > > a
> > > > > fire sale, is it fair to use those sale numbers when
someone
> > > else
> > > > is
> > > > > valuing an asset under Mark to Market?
> > > > >
> > > > > Maybe the realty experts on the board can opine.
> > > > >
> > > > > If only we had someone on the board who regularly dealt
with
> > > burden
> > > > > of valuing unique property? :-)
> > > > >
> > > > >
> > > > >
> > > > >
> > > > >
> > > > >
> > > > >
> > > > > --- In AsburyPark@yahoogroups.com, "asburycheech"
> > > <asburycheech@>
> > > > > wrote:
> > > > > >
> > > > > > Hi Folks,
> > > > > > Maureen Nevin who is a member of this group is having
> an
> > > issue
> > > > > with
> > > > > > her internet connection, so she asked me to pass along
the
> > > > > following.
> > > > > > She has a lot of good information on her asburyradio.com
> > > > website,
> > > > > but
> > > > > > hoped those interested might like to read the following
as
> > > well:
> > > > > >
> > > > > > ---------- Forwarded message ----------
> > > > > > From: Jay Hyde <jhyde@>
> > > > > > Date: Tue, Sep 30, 2008 at 3:12 PM
> > > > > > Subject: CAQ Urges Congress to Reject Proposals to Suspend
> > > > > > Mark-to-Market (Fair Value) Accounting
> > > > > > To: maureen@
> > > > > >
> > > > > >
> > > > > > September 30, 2008
> > > > > >
> > > > > > Dear Member of Congress:
> > > > > >
> > > > > > The Center for Audit Quality (CAQ) believes that
> proposals
> > > > > advocating
> > > > > > suspension of mark-to-market (or fair value) accounting
> are
> > > not
> > > > in
> > > > > the
> > > > > > best interest of investors or the capital markets and
> should
> > > be
> > > > > rejected.
> > > > > >
> > > > > > The principles of mark-to-market accounting are rooted
in
> the
> > > > > > fundamental virtue of transparency and are central to
> > informed
> > > > > market
> > > > > > decisions and efficient allocation of capital. In our
> view,
> > > > > investor
> > > > > > confidence would be undermined by efforts designed to
mask
> > the
> > > > > actual
> > > > > > value of financial assets at a given point in time.
> > > > > >
> > > > > > It is important to underscore that mark-to-market
> accounting
> > > has
> > > > > > contributed positively to revelations about the severity
> of
> > the
> > > > > > economic crisis facing our country's credit markets and
> > certain
> > > > > > institutions, but it did not create the economic crisis.
> > > > > >
> > > > > > Recently, some have suggested that the Securities and
> > Exchange
> > > > > > Commission (Commission or SEC) or the Financial
Accounting
> > > > > Standards
> > > > > > Board (FASB) should suspend the application of mark-to-
> market
> > > or
> > > > > fair
> > > > > > value accounting or somehow impose a moratorium on mark-
to-
> > > market
> > > > > > requirements for certain financial institutions when
> preparing
> > > > > > financial statements to be used by investors.
> > > > > >
> > > > > > Although determining fair values for financial
> instruments
> > in
> > > an
> > > > > > illiquid market can be challenging, the best estimate of
> the
> > > > prices
> > > > > > that would be received for such instruments in orderly
> > > > transactions
> > > > > > occurring at the measurement date remains the most
relevant
> > > > > > information for investors and policymakers. To lessen the
> > > > > > uncertainties about the value of these securities, it is
> > > critical
> > > > > that
> > > > > > investors continue to have the insight provided by the
> > > > application
> > > > > of
> > > > > > mark-to-market accounting principles.
> > > > > >
> > > > > > Many of the current requirements stem from the Savings &
> > Loan
> > > > > crisis
> > > > > > in the 1980s, when we learned that not knowing the real,
> > > current
> > > > > > values of financial instruments held by financial
> > institutions
> > > > can
> > > > > be
> > > > > > devastating when the bubble finally bursts and
> institutions
> > > are
> > > > > forced
> > > > > > to close their doors. The current requirements provide a
> > > uniform
> > > > > and
> > > > > > consistent method to measure market values and provide
> > > investors
> > > > > > increased disclosures about those measurements. Suspending
> > > > > > mark-to-market accounting would throw financial reporting
> > back
> > > to
> > > > a
> > > > > > time of less comparability, less consistency and less
> > > > transparency.
> > > > > >
> > > > > > If there are concerns with the impact of asset
valuations
> on
> > > > > capital
> > > > > > requirements of financial institutions, regulators have
> > > > > alternatives
> > > > > > other than obscuring information relevant to investors.
> > > > Regulators
> > > > > may
> > > > > > modify those requirements based on criteria other than
> fair
> > > value
> > > > > > accounting measurements to the extent they deem
> appropriate.
> > > > > >
> > > > > > Other capital markets participants also have expressed
> > > concern
> > > > > about
> > > > > > the lack of transparency that would be created by a
> > suspension
> > > of
> > > > > > mark-to-market accounting. The Council of Institutional
> > > Investors,
> > > > > > which represents 130 public, corporate and union pension
> > funds
> > > > with
> > > > > > combined assets of more than $3 trillion, stated in a
> recent
> > > > > letter to
> > > > > > the SEC that "[a]ny termination or suspension of fair
> value
> > > > > accounting
> > > > > > will lessen transparency and investor confidence in the
> > capital
> > > > > > markets at a time when such confidence is critical to the
> > > > > stability of
> > > > > > our markets and the overall economy."
> > > > > >
> > > > > > Likewise, the CFA Institute, a global, professional
> > > association
> > > > of
> > > > > > more than 97,000 investment professionals with offices
> around
> > > the
> > > > > > world, recently wrote to both members of Congress and the
> SEC
> > > and
> > > > > > noted that "[c]easing fair value reporting will only
serve
> to
> > > > > > undermine the confidence of investors in our financial
> > > > institutions
> > > > > > and lead to a further crisis of confidence in our
> government
> > > and
> > > > > the
> > > > > > regulatory bodies overseeing those institutions."
> > > > > >
> > > > > > The proposed Emergency Economic Stabilization Act of
2008
> > > > restates
> > > > > > the authority of the Commission to suspend the
application
> of
> > > > > > Statement of Financial Accounting Standards No. 157, Fair
> > Value
> > > > > > Measurements (FAS 157), and requires that the Commission
> > > conduct a
> > > > > > study on the effects of FAS 157 on financial
institutions'
> > > balance
> > > > > > sheets, the impact of such accounting on bank failures in
> > > 2008,
> > > > the
> > > > > > quality of financial information available to investors,
> and
> > > other
> > > > > > matters, and report its findings to Congress within 90
> days.
> > > > While
> > > > > a
> > > > > > restatement of existing SEC authority and a study of mark-
> to-
> > > > market
> > > > > > accounting and its effects are not necessarily harmful in
> > > their
> > > > own
> > > > > > right, efforts to weaken the transparency provided by the
> > > current
> > > > > > standard should be avoided, especially in this time of
> > > financial
> > > > > > instability.
> > > > > >
> > > > > >
> > > > > > The CAQ would be pleased to discuss with you any of the
> > points
> > > in
> > > > > this
> > > > > > letter at your convenience.
> > > > > >
> > > > > >
> > > > > >
> > > > > > Sincerely,
> > > > > > Cynthia M. Fornelli
> > > > > > Executive Director
> > > > > > Center for Audit Quality
> > > > > >
> > > > > >
> > > > > >
> > > > > >
> > > > > >
> > > > > > Cc: Henry M. Paulson, Jr., Secretary, Department of
> > > Treasury
> > > > > > Ben S. Bernanke, Chairman, Federal Reserve
> > > > > > Christopher Cox, Chairman, SEC
> > > > > > Mark W. Olson, Chairman, PCAOB
> > > > > > Robert H. Herz, Chairman, FASB
> > > > > > All Members of Congress
> > > > > >
> > > > > > The CAQ is an autonomous public policy organization
> serving
> > > > > > investors, public company auditors and the capital
markets
> > and
> > > is
> > > > > > affiliated with the American Institute of CPAs. The CAQ's
> > > mission
> > > > > is
> > > > > > to foster confidence in the audit process and to aid
> > investors
> > > > and
> > > > > the
> > > > > > markets by advancing constructive suggestions for change
> > > rooted
> > > > in
> > > > > the
> > > > > > profession's core values of integrity, objectivity,
> honesty
> > > and
> > > > > trust.
> > > > > > Based in Washington, D.C., the CAQ consists of
> approximately
> > > 800
> > > > > > member firms that audit or are interested in auditing
> public
> > > > > companies.
> > > > > >
> > > > >
> > > >
> > >
> >
>
------------------------------------
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