[Rhodes22-list] Economics/Politics - Significant Post about economic and political mess

[Tootle]

Brad,

You are the accountant on this forum.  If there are others, they do not have
courage so speak up.

This is also an ethical question, a legal ethical question.  And lawyers
should be speaking up.  But alas, they claim Marxism is good.  Or they say
their practice is limited to real estate transactions or business matters. 
What the hell caused this mess?

In South Carolina when the state legislature is not in session, lawyer
represenatives represent clients before judges they elect.  Right and Wrong,
good and evil, when working in a gray areas, it is important that actions
withstand the scrutiny of sunlight.

Brad said, "Here's something you don't hear much about - I've read exactly
two articles that discussed "mark to market" including one from Steve
Forbes.  He didn't name it but he's referring to FASB 157 (Financial
Accounting Standards Board) which went into effect November 15, 2008 that
requires all assets including level 3 assets which include collateralized
debt obligations (what Warren Buffet described as "weapons of mass financial
destruction" in 2002) to be shown on the books at market value.  There lies
the problem, no one knows what these obligations are "worth" and when faith
in these instruments failed, the system started grinding to a halt.

If the people had been honest and ethical from the get go they would have
held the actions and the paper they were written on to sunlight and a simple
test of right and wrong.  These events remind me of the lady who spilled the
beans in the Enron situation.  And the media said Enron was big?

As you find time tell us where to find Steve's article and Warrens
admonition.  And post any relevant sources.  

Yes, Marxism is at issue because of the Federal requirement of banks to loan
in questionable situations instead of holding federally backed loans to a
high standard.  The government compelled bankers to disregard risks. 
Dictatorship, Marxism, Socialism, Progressivism, call it what you want, it
is wrong and leads to garbage.

Ed K
Greenville, SC, USA
attachment:
http://www.nabble.com/file/p19593492/401k.jpg 401k.jpg 


Ed,
The subject line should probably be edited to include 'Politics' since
that is always an aspect of economics, but let's stick primarily to
economics for now.

First, a quick personal note.  My union called me this week - the wife
of one of our members is dying from cancer and he has burned through
his sick leave to be by her side.  They asked me to cover one of his
trips last night, which I did.  I contacted my superior in the
training department and asked that he get the word out to fellow
instructors to consider flying "back-side-of-the-clock" trips for
landing currency instead of the usual afternoon "gentlemen" trips, and
they have stepped-up to the plate.  This is a great country, and I am
fortunate to work for a wonderful company and with a very professional
union.

Now about this little "financial problem" we face, it is bad. Just as
in every major airline crash that leaves a smoking hole in the ground,
the press immediately jumps to conclusions, focuses on the horror, and
is usually wrong in their analysis. What we are witnessing here is not
a crash (despite the MSM comparisons to 1929) but more like a GPWS
(ground proximity warning system) encounter - if immediate action
isn't taken, disaster will be the result. Like every aircraft
accident, the usual suspects start their spin, "It was the pilots
fault", "It was Boeings fault", "It was the company's fault", "It was
the weather".  The reality takes years to discover and the root causes
are often something completely different than the original pundits
analysis. And most importantly, there is usually plenty of blame and
responsibility to go around.

Here's the quick and dirty on what we know.  The financial markets
were about to shut down because the trust and faith in the underlying
assets that props-up the entire system were suspect.

I'll go into a more thorough analysis tomorrow after a good nights
sleep.  Here's something you don't hear much about - I've read exactly
two articles that discussed "mark to market" including one from Steve
Forbes.  He didn't name it but he's referring to FASB 157 (Financial
Accounting Standards Board) which went into effect November 15, 2008
that requires all assets including level 3 assets which include
collateralized debt obligations (what Warren Buffet described as
"weapons of mass financial destruction" in 2002) to be shown on the
books at market value.  There lies the problem, no one knows what
these obligations are "worth" and when faith in these instruments
failed, the system started grinding to a halt.

I'm not very happy about the federal government nationalizing roughly
7% of the economy but let's hope this only a temporary jolt of
medicine and the government will divest themselves of their new
"ownership" position as quickly as they acquired it.

We'll discuss the culprits tomorrow.

Brad

On Fri, Sep 19, 2008 at 6:26 PM, Tootle <ekroposki at charter.net> wrote:
>
> Brad just posted a significant post to the list, but its significance gets
> lost in subject line.  All shoud read his last post:
>
> http://www.rhodes22.org/pipermail/rhodes22-list/2008-September/054616.html
>
> I am referring to the briefing to Congress.
>
> Ed K
> Greenville, SC, USA
> --
> View this message in context:
> http://www.nabble.com/Significant-Post-to-List-with-wrong-subject-line%21%21%21-tp19580917p19580917.html

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