The Democratic Activist
When you or I apply for a refi loan, do we get to assess the value of our home ourselves because we think the market for that asset is "distressed," and in so doing hide our poor financial health and low aggregate net worth?
Certainly not. Don't be silly.
We have to pay $400 for a 15-minute independent property appraisal that determines the current market value of our home.
Well ... bankers have just been given the right to assess the value of their own assets, to just make self-serving guesses as to what they'd be worth in a "normally functioning market," in order to make themselves appear financial viable and hide their true insolvency!
One easy going rule for a small cadre of wealthy, powerful, corrupt Wall Street pirates, and another entirely different, difficult, harsh, and unforgiving rule for all the rest of us mere average Americans.
Excerpts from an article appearing in today's Huffington Post:
Rep. Alan Grayson (D-Fl.), who quizzed Herz on the accounting rule, said that the demand to change the rules is "representative of exactly the kind of thing that's put us in this position in general...We have people who break every rule in the book and then they think that the answer to their problem ss is to break more rules. It's given us some real insight into the human nature and the pathology of the people who have created these problems for America."
If banks are allowed to determine the value of their assets without regard to current prices, investors have less trust and confidence in the integrity of their books and their assets, which could further freeze markets and further drive down prices.
Treasury Secretary Timothy, testifying before Congress on Tuesday, expressed some support for the rule change, calling it a "constructive set of changes" that struck a balance "between preserving confidence in the quality of public disclosure, which is very important to getting through this, [and addressing] some of the complications of applying those standards in a market like we're experiencing today."
This is beyond outrageous, exasperating, ridiculous, and utterly unacceptable.
If you agree, here's how you can ...
Public comments are being collected by the The Financial Accounting Standards Board (FASB) until 4/1/09:
401 Merritt 7, PO Box 5116
Norwalk, CT 06856-5116
IMPORTANT: In your comment, be sure to include the following text (do so in the subject line for email messages, or in the first line of your letter):
File Reference: Proposed FSP FAS 157-e.
Here's a sample message (feel free to copy all or part of it):
Mark-to-market rules must NOT be changed for a small subset of Americans, i.e. rich bankers, while the rest of us, ordinary Americans, get no such favor. If I go to refinance my home mortgage, will I be allowed to value my home at some fictional future price, because the current market for this asset, my home, is currently "distressed?"
OF COURSE NOT! Because I'm not a wealthy Wall Street billionaire banker!
Why should special rules be created that make life easy for a small subset of the American population? Doing so flies directly in the face of both the letter and the spirit of the U.S. Constitution (violating equal protection). It is literally un-American to allow one small class of people cushy privileges that the rest of the population doesn't have.
Again ... do NOT change mark-to-market rules to allow banks to hide their insolvency. I'm not allowed to assess the current value of my own assets, neither are you ... why should they be allowed to do so?
Please inform me as to the final decision made by the FASB on this matter.
Pass it on.
The Democratic Activist