This is big news and it could mean very bad things for us “little people.” Credit cards rates will skyrocket, along with other bank interest rates such as your mortgage. What’s next? With all the shootings and cries of “terrorism” it could be martial law. This bears watching and following in the news…
From Huffington Post
Ryan Grim
First Posted: 11- 5-09 05:59 PM | Updated: 11- 6-09 05:38 PM
Amid the ongoing financial regulation overhaul, the banking industry is hoping to pull off a quiet power grab that has eluded its grasp since the Great Depression, by stripping the independence of the board that sets financial accounting standards.
The move could effectively let banks set their own accounting standards in rough economic times.
Astonishingly, at a time when the public is crying out for greater regulation to limit excessive risk-taking by financial institutions, the banks are trying to get Congress to agree that the next time there’s a big downturn, they should have the ability to alter their accounting standards — essentially, fudge the numbers — so that the public and investors won’t be able to tell how insolvent they really are. By ignoring their declining asset values, they can avoid the standard requirement of raising more capital.
The mechanism is contained in an amendment set to be introduced in mid-November by Rep. Ed Perlmutter (D-Colo.) that would move final authority over the Financial Accounting Standards Board (FASB) from the Securities and Exchange Commission to a new body, a so-called “oversight” board, that would include the officials charged with managing systemic risks to the financial markets.
These regulators would have the authority to override FASB’s accounting guidelines by taking into account economic conditions.
The move is so radical that it has split corporate America. The bankers and members of Congress who support it have earned themselves an unlikely enemy: the U.S. Chamber of Commerce.
A typical business or investor, after all, prefers honest, independent accounting, because they buy and sell real things based on real value.

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“Washington isn’t thinking straight,” said Josh Rosner, managing director of Graham, Fischer & Co, a New York-based financial analyst who advises regulators and institutional investors. “Financial statements are for the benefit of investors.”
Indeed, allowing banks to alter accounting standards when they run into trouble is incentive to take more risk and, in essence, institutionalizes fraud. The regulators would now be under enormous political pressure — and sometimes under direct orders — to allow banks to remain in business long after they’ve become insolvent, in the hopes that things will turn around and they’ll grow again.
And rather than stabilize the system, removing accounting independence destabilizes it in the long run, as investors and other banks have little confidence in the veracity of financial statements.
Perlmutter told the Huffington Post that under his proposal, the FASB “would stay with the SEC, but in instances where an accounting procedure or a way it’s being implemented poses a threat to the financial system by exaggerating what’s going on — is pro-cyclical to a point that it, too, threatens the system — then the financial regulator, the systemic regulator, could look in to it.
“For virtually every situation you can think of, there’s no change, but [there would be a change] in the event that there’s a threat to the system, like the dysfunctional market we had from October through March, and that the accounting procedures just didn’t fit for a system where there was no market,” Perlmutter said.
Leslie Oliver, a spokeswoman for Perlmutter, said backers of the amendment haven’t been surprised at the opposition from certain sectors of corporate America.
“That’s understandable for a company that has tangible assets,” she said. Perlmutter said he has yet to hear directly from the Chamber.
That the banking industry finds itself in opposition to large sectors of the business community is evidence that a historic power struggle for control of the economy is underway.
The issue is stirring up the House Financial Services Committee. “It’s caused a great deal of controversy,” said committee chairman Barney Frank (D-Mass.). Frank has yet to take a position, he said, waiting until Perlmutter finishes meeting with members of the committee. “I told him I would wait until he finishes his conversations,” Frank told HuffPost.
FASB is fighting to keep its independence. “The amendment that’s being considered represents a shift that threatens to fundamentally challenge the objectives of financial accounting and politicize the process and harm financial system,” said FASB spokesman Neal McGarity. “The mission of bank regulators is to ensure the safety and soundness of the banking system. We have a different mandate. That’s why this is of considerable concern.”
A powerful subcommittee chairman already opposes it. “I’m for keeping the independent FASB and I see no reason to change it,” Rep. Paul Kanjorski told HuffPost.
The Chamber joined with investors and auditors in opposing the Perlmutter amendment.
From a letter sent to top committee members by representatives of the Center For Audit Quality; the Chamber of Commerce; and the Council of Institutional Investors:
“By placing the FASB under the jurisdiction of a structure charged with managing systemic risks to the financial markets, accounting rules will be viewed though the narrow lens of a few large companies from specific industries, rather than considerate of the applicability of financial reporting policies to over 15,000 public companies. Such a narrow focus can skew standards such that it makes understanding of transactions that businesses engage in on a daily basis more difficult and undermine the confidence of investors. We believe that the SEC has been and continues to be best suited to provide the oversight of the FASB for such a broad and diverse economy.”
The American Bankers Association stands on the other side. “A Systemic Risk Oversight Council could not possibly do its job if does not have oversight authority over accounting rulemaking,” top bank lobbyist Ed Yingling testified before the committee on October 29. “This is a major deficiency in the draft legislation. Accounting policies are increasingly and profoundly influencing financial policy and the basic structure of our financial system. Thus, accounting standards must now be part of any systemic risk calculation. To do anything less creates the potential to undermine any action taken to address a systemic risk. The Financial Accounting Standards Board should continue to function as it does today, but it should no longer report only to the Securities and Exchange Commission (SEC). The SEC’s view is simply too narrow. Accounting policies contributed to the crisis, as has now been well documented, and yet the SEC is not charged with considering systemic and structural effects.”
Yingling said the ABA “strongly supported” the approach taken by Perlmutter. “We thank Representatives Perlmutter and [Frank] Lucas [R-Okla.] for their foresight and leadership on this critical issue.”
While the big banks would be pleased by the change, Frank said, the major push has come from community banks. Perlmutter said that his amendment was one of the community bankers’ highest priorities.
Community banks are a popular and powerful political force in Congress. They didn’t heavily trade the exotic products that nearly brought down the global economy; they received little in the way of bailout money; they don’t give multi-billion-dollar bonuses; they tend to take more responsibility for loans that they issue; and they’re generally respected members of the local community.
“Many members of the committee are supportive of community banks,” said Rep. Maxine Waters (D-Calif.), one of the most progressive members of the committee and a subcommittee chair. “The big banks have been such an outrageous, scandalous story about how they operate and what they have done that we tend to want to support the community banks in whatever they ask us to do.”
Waters told HuffPost she supports Perlmutter’s amendment.
And winning the support of community bankers is in essence a necessary condition for Democrats who want to pass reform legislation through the Financial Services Committee. The Perlmutter amendment could be a way to win community banks over to the idea of a systemic regulator, a priority of the administration.
But working to loosen accounting rules could come back to hurt the Democratic Party: When the system goes down again, voters will want to know why.
When HuffPost asked Frank if Wall Street was pushing Perlmutter’s measure, he responded emphatically.
“You have this caricature in your heads. You literally don’t understand the way the world works,” he said. “It’s the community banks, the credit unions, who are driving this…Seriously, the community banks have the political clout here. Not the Wall Street banks.”
Frank said the ABA was likely pushing for the amendment to win favor with community banks in its rivalry with the Independent Community Bankers of America.
Perlmutter agreed. “It’s the community banks I’ve been working with. I’m not hearing it from the Wall Street guys,” he said.
While the ABA has traditionally been associated with large Wall Street banks, it also represents small banks and is attempting to expand its membership by signing up more community bankers.
It works well for the big banks when their interests are aligned with the little ones, as is the case here. When their interests are not aligned, the little banks often win. Community banks, for instance, won an exemption from examinations — though not the rules — related to the Consumer Financial Protection Agency.
The ICBA wants to use its clout and the distrust of the big banks to move Perlmutter’s amendment even further in their direction. “We’re not buying and selling all the time. We hold a lot of things for the long term…. So we’d like to build in some additional sensitivity to community banks so would like to make that more explicit,” Steve Verdier, an ICBA senior vice president, told HuffPost. “We’re going to get in touch with [Perlmutter] to see if there are more things that can be done to tweak it in our direction.”
Much of the debate around the amendment comes down to what is called the mark-to-market accounting requirement. Banks — both big and small — have long sought to avoid marking their assets down to market prices when those market prices are too low. Marking down the assets requires the bank to take a loss on its books, which then requires it to raise more capital by selling off assets at low prices. Banks claimed that in the fall, the market had frozen and that they couldn’t sell assets. Another way of putting it is that the market price was lower than they wanted to accept.
Regardless, forced selling at low prices creates a downward spiral that banks and the GOP blame for the financial crisis last fall. The GOP called for a study of the effect of mark-to-market accounting on the economic collapse as part of the bailout. That report found the accounting practice did not cause the collapse. Either way, the banks hope to avoid that cycle when the commercial real estate market collapses and they find themselves with bad loans again.
“It’s about easing the pressure to reduce the value of their assets in community banks, so they don’t have to raise more capital,” Frank said.
Asking accountants to change standards based on economic conditions could very well make their heads explode, however. It’s not their job, they say, to keep the system from collapsing. It’s their job to give honest numbers. If a company is bankrupt, it’s bankrupt.
“Accounting standards are not policy,” remarked one person involved in the fight.
But they have become policy. In the spring, Kanjorski’s subcommittee hauled the head of FASB in for a hearing and demanded the number-crunchers change their mark-to-market standards within three weeks or Congress would do it for them. FASB’s head pushed back during the hearing, saying that banks who called him asking for such a change were usually bankrupt fairly quickly.
“They practically dragged him into the hallway and beat him to death,” said Rep. Brad Miller (D-N.C.), a committee member skeptical of the Perlmutter amendment.
Three weeks later, they eased their accounting rules. But it wasn’t simple for the banks. Even with the intense congressional pressure, the change only sneaked by by a single vote and created tension on a board accustomed to a freedom from politics. The Perlmutter amendment would make such a battle unnecessary for the banks.
“There are a lot of banks that are in a lot of trouble and have a lot of exposure to commercial real estate,” Miller said. “You can’t fix that with accounting.”
Rep. Alan Grayson (D-Fla.) fought a lonely battle last spring to stave off the loosening of the accounting rules and opposes this more dramatic shift, as well. Banks may have good reason to want to overstate the value of their assets, he said, and it may work for a time. But an economy can’t be run indefinitely on imaginary numbers. “I enjoy reading fiction, but not in financial statements,” he said.
UPDATE: HuffPost obtained a copy of the amendment language that is circulating among lobbyists. Perlmutter’s spokeswoman confirmed its authenticity.
The amendment would empower the council overseeing FASB to “recommend to the SEC, either publicly or privately to take such action as is necessary, including but not limited to suspension, modification or elimination of such accounting principles, standards or procedures as they may apply to the stability of the financial system or the safety and soundness of financial companies, as a whole, for such duration as is reasonable and appropriate.”
If the SEC doesn’t follow the “recommendation,” according to section (c) of the amendment, the council can order it to do so.
In other words, for the sake of financial stability, bank regulators could secretly order the “elimination” of accounting standards.
SEC. 1103. PRUDENTIAL OVERSIGHT OF ACCOUNTING PRINCIPLES AND STANDARDS THAT POSE SYSTEMIC RISKS.(a) IN GENERAL.–In the event that any member of the Council believes that an accounting principle, standard or procedure threatens the stability of the United States financial system or companies, as a whole, then the Council shall investigate and by a majority vote, determine whether any corrective action, emergency or otherwise, is necessary to prevent or mitigate any adverse effects from such principle, standard or procedure. In the event that the Council determines that corrective action is necessary then, the Council shall recommend to the SEC, either publicly or privately to take such action as is necessary, including but not limited to suspension, modification or elimination of such accounting principles, standards or procedures as they may apply to the stability of the financial system or the safety and soundness of financial companies, as a whole, for such duration as is reasonable and appropriate.
(b) ADOPTION OF COUNCIL RECOMMENDATIONS BY SECURITIES AND EXCHANGE COMMISSION.–the Securities and Exchange Commission shall ensure that the prudential standards recommended by the Council are implemented within 60 days of the Council’s recommendation or within such other time period specified by the Council.
(c) FAILURE TO ADOPT STANDARDS.–If the Securities and Exchange Commission fails to ensure that the prudential standards recommended by the Council are implemented within the time period specified in paragraph (b), the Council is authorized to direct that any recommendations issued pursuant to paragraph (a) be implemented for the purposes of generally accepted accounting principles.”
UPDATE II: The SEC and the American Institute of Certified Public Accountants both oppose the amendment, as well. “Accounting should be about accounting, and not about anything else,” writes SEC chair Mary Schapiro in a letter to Frank sent Thursday.
From a letter from the AICPA:
It is our understanding that Congressman Ed Perlmutter (D-CO) is considering language to amend the Financial Stability Improvement Act of 2009, which would undermine the independent accounting standard process as currently carried out by the Financial Accounting Standards Board (FASB). The American Institute of Certified Public Accountants (AICPA) strongly opposes this amendment and any attempt that would serve to undermine the independence of accounting standard setting. The purpose of public company financial reporting is to provide investors with clear, objective, and transparent financial information. This helps investors make informed investment decisions. Any attempt to divert financial reporting from its primary investor-focused objectives to other policy objectives with regard to financial institutions damages investor protections.
From
I cannot believe that pictures taken by parents of their childen during and after bathtime can be considered pornography! 
Another soldier recovering from war injuries died this week in his barracks at Fort Sam Houston, the Army said today.



Grabbing the spotlight: Rude and self-centered people
Sunday, September 20, 2009 by A Face in the Crowd
Absolutely right on! Meet these people every day.. Frankly, I am amazed at how rude and nasty many people are and you can tell that they think they are someone “special.”
Would be nice if people actually did some soul searching after reading this and incorp’d some changes. Might make the world a better place to live..
From CNN
Commentary: Joe, Kanye, Serena — aren’t they special?
Story Highlights
Special to CNN
SAN DIEGO, California (CNN) — Thanks to Joe, Kanye, Serena, and other misfits, a lot of people are talking about how society is undergoing a rash of rudeness.
That’s not completely accurate. It’s more like a rise in self-centeredness.
Among the self-centered: Congressman Joe Wilson, rapper Kanye West and tennis star Serena Williams. But this phenomenon isn’t limited to celebrities and previously anonymous backbenchers in Congress basking in their 15 minutes.
There are many people out there, in all walks of life, who think they’re more significant than they really are. Plagued with an exaggerated sense of self-importance, they feel entitled to do whatever they want, whenever they want to do it no matter whom it hurts.
The self-centered rarely think about the consequences because they’re too busy claiming what they see as their rightful place in the spotlight. And when they’re criticized for letting their narcissism get the best of them and face the wrath of their colleagues or the disapproval of their fans, they might apologize. But, even then, they often don’t do a very good job of it because their heart’s not in it.
They don’t feel genuine remorse but they’ve been told by their press secretaries and publicists to fake it as best they can as part of the damage control. They mouth the words because they consider it to be in their own best interests. It’s always about them.
South Carolina Gov. Mark Sanford made matters worse at home by apologizing for an affair with someone he called his “soul mate.”
Singer Chris Brown — who began performing community service in Virginia this week in connection with his sentence for assaulting his then-girlfriend, singer Rihanna — publicly apologized for the abuse and then played the victim when Oprah Winfrey criticized him.
So how did this virus of self-centeredness get in our national bloodstream?
Some in the media blame the coarseness of talk radio and the Internet where the most extreme voices are the loudest and where people tune in not to hear different points of view but to have their own views validated. That’s no picnic for those of us who won’t be boxed in. I’ve had liberals comment on this site that, as someone who sometimes voices conservative opinions, my column belongs somewhere else. But, when I recently hosted a radio show, and expressed liberal views, an angry caller protectively informed me that “AM talk radio is for conservatives.”
Others blame the look-at-me-I’m-so-special culture bred by egocentric social networking sites such as Facebook, My Space, and Twitter. With thousands of “followers” caring enough to take time from their own day to shadow you through yours, is it any wonder that the followed are getting big heads as they “tweet” what they had for breakfast?
But I’m old-school. I believe that what matters most is not what happens at your computer but around your dinner table. When we consider the reasons for this rash of self-centeredness, I think most of it comes down to just one thing: bad parenting.
Americans have reared at least one generation of kids, or maybe two, to think of themselves as the last bottle of soda pop in the desert. We said we were building children’s self-esteem so they could be successful, but it never occurred to us that giving kids what psychologists call “cheap self-esteem” could do more harm than good by making our kids think they’re 10-feet tall and bulletproof when they’re neither.
Besides, what many of these parents were really doing was feeding their own egos; by telling your kids they’re special, it confirms that you’re special for having such special kids. Isn’t that special?
Experts who study the generations say that, thanks to reliable birth control and legalized abortion, the last couple of generations have been the “most wanted” in American history. When they arrived, we drove them around in minivans with signs that broadcast: “Caution: Baby on Board.” And when they went to school or summer camp, we made sure everyone got a trophy so no one got their feelings hurt.
One person who has zeroed in on this is Jean Twenge, an associate professor of psychology at San Diego State University. Twenge has spent more than a dozen years examining generational differences. Her research includes comparing studies on the self-esteem of more than 60,000 college students across the country from 1968 to 1994.
As a result of this, and the feedback of hundreds of her own students, Twenge has written two highly informed books on our self-centered culture. This year, she put out, “The Narcissism Epidemic: Living in the Age of Entitlement,” with co-author and fellow psychologist W. Keith Campbell.
Twenge recalled the student who asked her to postpone a final exam because it interfered with his plans for a birthday outing to Las Vegas. She also heard from a person who runs a company in Minnesota who said it was not uncommon for employees to call into the office and say they were too tired to come to work.
In their book, Twenge and Campbell list the factors fueling the entitlement mentality. They include celebrity culture and the media, which teach Americans that they’re entitled to be famous.
“Narcissism is absolutely toxic to society,” Twenge told me when I interviewed her about her book a few months ago. “When faced with common resources, narcissists take more for themselves and they leave less for others.”
And, as usual, diagnosing the ailment is easier than curing it. But cure it we must. Before we learn all the wrong lessons and come to think that the abnormal is normal, and the intolerable is acceptable.
A friend who used to work in the Bush White House tells me that some Republican voters are already flooding the Congressional switchboard and pushing the idea of Joe Wilson running for president in 2012. No lie!
We had better work fast.
The opinions expressed in this commentary are solely those of Ruben Navarrette Jr.
Posted in Culture, Family, Life, Opinion, People | Tagged celebrity, CNN, commentary, everyday, jr, People, ruben navarrette, rudeness, self-centerness, Selfishness, society | Leave a Comment »