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HomeFreddie Mac, Fannie Mae Deja Vu?: Part II
Posted by Larry Doyle on April 8th, 2010 11:51 AM |
On Christmas Eve 2009, the Obama administration provided a blank check to the wards of the state known as Freddie Mac and Fannie Mae. (“Fannie and Freddie’s Huge Christmas Bonus”)
What other quasi-government institutions have a very similar business profile as Freddie and Fannie? The Federal Home Loan Bank system, acronym FHLBs, commonly referred to within the financial industry as FLUBs. I will reserve comment on that moniker. Ten months ago, I questioned whether the dynamics at work within the FHLB system would be the equivalent of what has transpired at Freddie and Fannie. I wrote “Freddie Mac, Fannie Mae Deja Vu?” and highlighted:
Can our economy absorb another financial hit of the magnitude of Freddie Mac and Fannie Mae? (more…)
IASB at Odds with FASB on ‘Extend and Pretend’
Posted by Larry Doyle on November 5th, 2009 3:15 PM |
Extend and pretend!!
What is that? In large measure, accounting practices for financial institutions in the United States promote practices which ‘extend’ the terms of the loan or asset while ‘pretending’ as to the real value of that loan or asset.
Regardless of what one thinks about the integrity of these business and accounting practices, the fact of the matter is they are prevalent in our financial industry today.
As I referenced in writing about the Financial Accounting Standards Board (FASB) yesterday, I believe this board felt emasculated in having the relaxation of the fair value mark-to-market rammed down its throat by Wall Street and Congress.
There is another accounting board which has a decidedly different take on the accounting of financial assets. Who might that be? Let me introduce you to the International Accounting Standards Board, otherwise known as the IASB. (more…)
