jds6958
November 15th, 2007, 05:02 PM
The markets had a head fake rally hoping that all of the sub prime financial junk coming down the pipe as a result of the FASB 157 was going to be delayed. Well, that ended up being 95% untrue. It "mostly" passed. However, it seems that "nonfinancial assets and nonfinancial liabilities" have a year to defer. I am not sure exactly what fits that label, but the fact they even felt a need to delay some of it reflects the anticpated negative impact that the outflow of data will create. There is not really any way out now. All of the hidden accounting practices will surface and we all know how this is going to turn out. Prepare for some mouths to start hitting the floor. I wonder if the PPT will support the panicing markets by printing/creating more cash? That is my bet. Let the markets fall some but let the USD take most of the punishment. We will see...
Sources:
Summary of Statement No. 157
Fair Value Measurements
http://www.fasb.org/st/summary/stsum157.shtml
FASB Rejects Deferral of Statement 157 for Financial Assets and Liabilities
Business Wire, 2007-11-15 00:05:07 -
http://www.pr-inside.com/fasb-rejects-deferral-of-statement-r301808.htm
here is a nice summary of the FASB 157 -
http://www.rgemonitor.com/blog/roubini/
While FASB decided yesterday to to pospone the implementation of some parts of FASB 157, only non-financial assets (business combinations, etc.) have been excluded from this implementation; thus financial assets including asset backed securities and other illiquid financial assets will now have to be valued - whenever possible - using market prices or proxies of them rather than using voodoo-finance models and credit ratings (or better misratings) that don't make sense.
And here is the link to the Monday interview.(where I discuss both FASB 157 and why a US recession is by now practically inevitable).......
Sources:
Summary of Statement No. 157
Fair Value Measurements
http://www.fasb.org/st/summary/stsum157.shtml
FASB Rejects Deferral of Statement 157 for Financial Assets and Liabilities
Business Wire, 2007-11-15 00:05:07 -
http://www.pr-inside.com/fasb-rejects-deferral-of-statement-r301808.htm
here is a nice summary of the FASB 157 -
http://www.rgemonitor.com/blog/roubini/
While FASB decided yesterday to to pospone the implementation of some parts of FASB 157, only non-financial assets (business combinations, etc.) have been excluded from this implementation; thus financial assets including asset backed securities and other illiquid financial assets will now have to be valued - whenever possible - using market prices or proxies of them rather than using voodoo-finance models and credit ratings (or better misratings) that don't make sense.
And here is the link to the Monday interview.(where I discuss both FASB 157 and why a US recession is by now practically inevitable).......