Global economic situation for liveaboard cruising yachties

[masalai]

This could prove interesting.... Accountants fear that their credibility and reason for being is under threat and may see the light soon - - - From Bloomberg...

Accountants Gain Courage to Stand Up to Bankers: Jonathan Weil.... Commentary by Jonathan Weil.... July 23 (Bloomberg) -- Turns out America’s accounting poobahs have some fight in them after all.

Call them crazy, or maybe just brave. The Financial Accounting Standards Board is girding for another brawl with the banking industry over mark-to-market accounting. And this time, it’s the FASB that has come out swinging.

It was only last April that the FASB caved to congressional pressure by passing emergency rule changes so that banks and insurance companies could keep long-term losses from crummy debt securities off their income statements.

Now the FASB says it may expand the use of fair-market values on corporate income statements and balance sheets in ways it never has before. Even loans would have to be carried on the balance sheet at fair value, under a preliminary decision reached July 15. The board might decide whether to issue a formal proposal on the matter as soon as next month.

“They know they screwed up, and they took action to correct for it,” says Adam Hurwich, a partner at New York investment manager Jupiter Advisors LLC and a member of the FASB’s Investors Technical Advisory Committee. “The more pushback there’s going to be, the more their credibility is going to be established.”

Broad Consequences

The scope of the FASB’s initiative, which has received almost no attention in the press, is massive. All financial assets would have to be recorded at fair value on the balance sheet each quarter, under the board’s tentative plan.

This would mean an end to asset classifications such as held for investment, held to maturity and held for sale, along with their differing balance-sheet treatments. Most loans, for example, probably would be presented on the balance sheet at cost, with a line item below showing accumulated change in fair value, and then a net fair-value figure below that. For lenders, rule changes could mean faster recognition of loan losses, resulting in lower earnings and book values.

The board said financial instruments on the liabilities side of the balance sheet also would have to be recorded at fair-market values, though there could be exceptions for a company’s own debt or a bank’s customer deposits.

The FASB’s approach is tougher on banks than the path taken by the London-based International Accounting Standards Board, which last week issued a proposal that would let companies continue carrying many financial assets at historical cost, including loans and debt securities. The two boards are scheduled to meet tomorrow in London to discuss their contrasting plans.

Differing Treatment

While balance sheets might be simplified, income statements would acquire new complexities. Some gains and losses would count in net income. These would include changes in the values of all equity securities and almost all derivatives. Interest payments, dividends and credit losses would go in net, too, as would realized gains and losses. So would fluctuations in all debt instruments with derivatives embedded in their structures.

Other items, including fair-value fluctuations on certain loans and debt securities, would get steered to a section called comprehensive income, which would appear for the first time on the face of the income statement, below net income. Comprehensive income now appears on a company’s equity statement.

Another quirk is that the FASB doesn’t intend to require per-share figures for comprehensive income. Only net income would appear on a per-share basis. My guess is that means Wall Street securities analysts would be less likely to publish quarterly earnings estimates using comprehensive income.

Imagining the Impact

Think how the saga at CIT Group Inc. might have unfolded if loans already were being marked at market values. The commercial lender, which is struggling to stay out of bankruptcy, said in a footnote to its last annual report that its loans as of Dec. 31 were worth $8.3 billion less than its balance sheet showed. The difference was greater than CIT’s reported shareholder equity. That tells you the company probably was insolvent months ago, only its book value didn’t show it.

The debate over mark-to-market accounting is an ancient one. Many banks and insurers say market-value estimates often aren’t reliable and create misleading volatility in their numbers. Investors who prefer fair values for financial instruments say they are more useful, especially at providing early warnings of trouble in a company’s business.

‘Religious War’

“It’s been a religious war,” FASB member Marc Siegel said at last week’s board meeting. “And it’s been very, very clear to me that neither side is going to give, in any way.”

So, the board devised a way to let readers of a company’s balance sheet see alternative values for loans and various other financial instruments -- at cost, or fair value -- without having to search through footnotes. At last week’s meeting, FASB member Tom Linsmeier called this a “very useful approach that addresses both sets of those constituents’ concerns.”

This will not satisfy the banking lobby, which doesn’t want any significant expansion of fair-value accounting. “I guess the nicest thing I can say is it’s difficult to find the good in this,” Donna Fisher, the American Bankers Association’s tax and accounting director in Washington, told me.

If the bankers don’t like it, that’s probably a good sign the FASB is doing something right. - - - (Jonathan Weil is a Bloomberg News columnist. The opinions expressed are his own.) - - - To contact the writer of this column: Jonathan Weil in New York at jweil6@bloomberg.net - - - Last Updated: July 22, 2009 21:00 EDT

Well at last someone with a bit of backbone is trying to stand up for what is right and correct - - So you lot (readers), How about some support and encouragement.... and Casey research had this comment...

"...Fact vs. Fiction - There is a battle being fought behind the scenes, a fight that could set the stage for a very, very big correction in stocks of banks and other financial services companies. During the first phase of economic crisis, the government leaned on the Financial Accounting Standards Board, or FASB as it is usually referred to, to suspend its mark-to-market valuation standards.
Instead of having to value the assets on their books based on something at least modestly resembling reality – reality being defined as what people might actually be willing to pay you for it – once mark-to-market was done away with, financial institutions were able to assign values to assets by the time-honored technique of licking a finger and poking it into the wind. If the wind, blowing from the mouths of management, determined that a certain value should be assessed, assessed it was.
The consequence of this change was that, presto, much of the capital challenges the financial institutions were struggling with just disappeared, and banks could trot out their freshly smudged balance sheets with a satisfied smirk.
That smirk could soon be slapped away if new proposals by the FASB to return to mark-to-market, and even extend it, are again accepted as required practice. If this were to occur, all the unloved and unwanted toxic garbage now masquerading as good capital would overnight go “poof,” leaving ashes in its place.
Quoting our own Olivier Garret, “If this happens, all of a sudden all the financial stocks that did so well in Q1 and Q2 will collapse again, and this time I do not think the Fed will be able to prevent it.”
Why would the FASB reverse itself on this issue? Simply, if accountants are to have any credibility at all – or serve any real purpose – they need to be true to their profession. Otherwise, why would anyone believe in the work they do? Continuing to look the other way while corporations cook the books would be akin to a society of professional home builders adopting a policy to leave out certain crucial support beams. After awhile, the ensuing carnage would discredit the profession entirely.
The FASB has a very powerful incentive to do an about-face on the mark-to-market rule change – a change that was entirely due to heavy political pressure at the time. And that incentive is the survival of their profession...."

[masalai]

One for Boston and fellow traders http://financialsense.com/fsu/editor...2009/0730.html

a *.pdf file from the Northern Trust Global Economic Research "I come neither to praise nor to bury Brenanke" ???? http://www.financialsense.com/econom...9/ec073009.pdf

a GUILD GLOBAL MARKET COMMENTARY ... http://financialsense.com/editorials...2009/0730.html

Other stuff tries to keep my happy hat on, but with sooooo much corruption, cheating and fraud in the major bourses I will not hold my breath in anticipation of any "fairplay" or actual market forces... Legitimate business cannot function for long in such an environment. - - - - 10% turnover tax (GST) is the maximum any "government" should get and a similar amount, a "tithe" for charitable works.... and until reasonable and just laws can be implemented to ensure fair, honest and a safe environment I see no value in paying - if I can get away with it....

[masrapido]

One for the "religious war" remark. Vatican is the 8th biggest money laundering machine in the world. It controls so much money from the biggest ompanies in the world, individuals hiding from the tax responsibilities and criminals around the world that it is effectively one of the biggest factors in the creation of the current crisis. If you think Lichtenstein is a tax haven, read here what the "good' nazi Ratzinger and his mafia are up to and see how they are screwing the world:

www.beppegrillo.it/en/2009/06/vaticano_spa.html
http://en.wikipedia.org/wiki/Istitut...e_di_Religione
http://en.wikipedia.org/wiki/Roberto_Calvi
http://en.wikipedia.org/wiki/Piergiorgio_Odifreddi

Tens of billions of money flow through the Vatican every year and only a minute part, around 2% of all the money is channeled into carefully selected propagandistic and by default useless "poverty eradication" or "medical" projects. Of these 95% end up being re-invested in the church's own infrastructure and religious schools, while poor and sick see nothing of it. Theresa, the old wrinkled hypocrite is one typical example of that criminal money laundering and capitalist colusion to empoverish the poor and enrich the rich.

Read for yourselves. The writers, in particular Beppe Grillo, are well known journalists and columnists in Europe. Pope and his cronnies are busy helping this world getting screwed even more, instead of helping those in need and eradicating the poverty.

[Boston]

Dam Masrapido you sure nailed that one
although I always kinda liked Mother Teresa, specially after she chewed out the pope or when she refused the nobel prize dinner, instead insisting that everyone just sit there and be hungry for a minute

Ratzinger however is going to sprout horns and a tail some day
his former position in the Vatican was titled
"Defender of the Doctrine of the Faith"
previously called the "office of the Inquisitor"
same one that burned so many innocents and authorized the slaughter of the native peoples for gold
Ratzinger's job was to destroy both members of the church and non members who wrote contrary to the vagaries of church doctrine and he was according to many the most feared man in the Vatican
just one small example of his malicious handling of information
when the dead sea scrolls were in danger of going public
He worked overtime to suppress and discredit members of the team in Jerusalem that were translating the scrolls as well as set up front libraries and learning institutions in order to seem legitimate in purchasing various fragments of the scrolls
and then destroying them
it is widely thought that the adds offering to purchase any scroll fragments by the sq mm originated with him
those adds resulted in the scrolls not yet sold being torn up into smaller fragments as it was advertised each fragment would be earning a base amount plus a bonus for each sq mm
there is a great book concerning his handling of the dead sea scrolls
"The Dead Sea Scroll Conspiracy"
another one is
"The dead Sea and the Christian Myth"
both go into the events surrounding the release of the scrolls translations

I couldnt agree with you more about Ratzinger having minored in history and specialized in religious history at that
the Rat is aptly named and your preaching to the quire about the money
the Vatican is the richest entity on the planet
yet Jesus preached poverty
hmmmmmm
sound fishy to anyone else

Teresa on the other hand I have always thought of as a good person in a bad organization and I particularly like her writings, many of which are stunningly beautiful

Im not sure if she wrote the following
but its widely attributed to her
and I just dont see how someone
even someone dogmatically following the diatribe of the Pauline Christians could be all bad having written from the heart so well

at the end of a long drawn out ( basic boring Pauline Christian mythos ) speech she hit upon this jewel
( why Ive always suspected she didn't right it )

"people are often unreasonable, illogical,and self centered
forgive them anyway

if you are kind, people may accuse you of selfish, ulterior motives;
be kind anyway

if you are successful, you will win some false friends and some true enemies
succeed anyway

if you are honest and frank people may cheat you;
be honest and frank anyway

what you spend years building someone could destroy overnight
build anyway

if you find serenity and happiness
they may be jealous
be happy anyway

the good you do today
people will often forget tomorrow
do good anyway

give the world the best you have
and it may never be enough
give the world the best you've got anyway

you see in the final analysis
its between you and your God
it was never between you and them anyway"

Mother Teresa
Oslo
1979

[masalai]

Boston & masrapido, (in alphabetical order), a nice bit of research, Herewith a bit along different lines (dam, someone keeps moving the keys around and lots of typo's to fix)

“The lies the government and media tell are amplifications of the lies we tell ourselves. To stop being conned, stop conning yourself.”
James Wolcott

"Interventionism cannot be considered as an economic system destined to stay. It is a method for the transformation of capitalism into socialism by a series of successive steps. Credit expansion is not a nostrum to make people happy. The boom it engenders must inevitably lead to a debacle and unhappiness."
Ludwig von Mises

http://www.theaureport.com/pub/na/28...he%20Upside%22 That is one long website and the message is bound to "KICK ASS" as he tells is as it is....
This excerpt just illustrates a small portion of the **** the USA is in - - - - -
"TGR: Shifting from social unrest to financial unrest, when we last interviewed you, you were talking about the $600 trillion of outstanding derivatives and the potential—if it begins to unravel—of putting heavy selling pressure on the financial markets. Do you see that beginning to happen?

BM: Absolutely. The big crash that took place from last July through November was unusual because it had far more to do with unwinding or deleveraging of derivatives. For the first time in about 10 years, derivatives actually went down. I’ve been making the comment since 2001 that derivatives were a financial time bomb and the bigger they grew, the bigger the explosion was going to be.

Here are the numbers you need to focus on. According to the latest figures put out by the BIS (Bureau of Industry and Security, U.S. Department of Commerce), derivatives decreased by about $100 trillion from July through December 2008. But for derivatives to deleverage $100 trillion, it wiped out $50 trillion worth of net asset value. For us to knock that $600 trillion to something more manageable—like $50 trillion—could wipe out $250-$275-$300 trillion worth of assets. There isn’t $300 trillion worth of assets in the whole world.

So the simple explanation is that there is far more debt in the world than assets to cover it. We have not come to grips with that. We’ve not seen the bottom of the stock market and I believe there will be a massive deleveraging starting shortly. The bankruptcy of CIT or the situation in California could well be what starts it."


A case of history repeating? We humans seem sooooo stupid, in that we do not learn from past errors and persist in denying portents of doom... http://theburningplatform.com/econom...merican-empire - - DO NOT IGNORE THIS ESSAY, It is very important to your future well-being and understanding your current situation, in USA and those countries like Australia & Europe, supplicant to the USA economic situation.... "..NOT FUNNY JAN..".. and watch the quotes appearing on top right of the page, I posted some on Quotable-quotes thread...

Gross manipulation and fraud and theft and all those shenanigans persist in the NY bourse/casino - I think the chances of a fair deal in Las Vegas may be better - or at least outside when confronted by a gunman after your winnings....

[Frosty]

Ha Mass your wrong,-- Mr Black Obama has said that America is showing signs of coming out of the recession,---

I think he means that the new printing machines that cost billions are finally managing to print enough money fast enough to keep up with Gov spending.

Have you noticed that Americans dont bite back any more, at one time you could not say anything about the USA,--- you would get shouted down and declared war on.

Now they just hang there head, shame ,--well what else can they do.

It is truly irksome that you people exist. Actually, I am a little slower than most - I'm sure that all are quite sick of you but I keep sliding food under the door while others are smart enough to let this thread atrophy.

[masalai]

Oh dear, do I detect a rabid bigot somewhere?The truth is out there, seems someone is blinded by an anti-christ?

[Frosty]

Its not Marks fault Mas, he still reads the thread so he must be interested I guess.

Never mind buddy you can come live under a palm tree here I got an old cardboard box you can have from a ole 56 inch Plasma TV that a Vietnamese family threw out.

I would get a tree booked early to avoid disappointment if I were you.

So the real estate buisness is saying here that now is the time, and that good bargains are to be had.

I saw one last week,-- maybe I could post it!! it said "American owner wants out must sell as most American owned properties, owner must sell.

You know those big foam number one fingers that the Americans wave about. They dont sell them anymore.

It appears that Americans way of investing without any consideration for any other is to but stock or shares, then amazingly walk away and go and live in another country.

I know a few that are absalutely ferked and have to sell owing Marina fees etc etc

[masalai]

Who was talking to Mark? - but if the cap fits then he can wear it

On a different topic, another example of abject and total corruption in two major banking organisations in USA - and they still operate and no prosecutions and no rabid looser gone beserk over his losses by those cheating frauds and their ponzi schemes? as the news boy may say "...Read all about here..." - - http://financialsense.com/fsu/editor...2009/0731.html

Consider the Current Economic Realities as reflected in the Headlines of Shadowstats.com July 31, 2009
“Flash Update:
- GDP Shows Most Severe Recession Since Great Depression
- Second-Quarter GDP Annual Contraction Was Worst Ever
- Recession Is Not Ending
- Annual Durable Goods Plunge Continued In Great Depression Territory
- Broad Money Growth Still Slowing
- Unemployment Skew Next Week?”



Now, don't forget to download the podcasts and about 4 hours of quiet Saturday listening over a beer or two with some friends who might be surprised - find it here - http://www.financialsense.com/fsn/main.html

[masalai]

"...I think terrorism is the most recent reason, I might have missed a few or lost track. There have been so many reasons that I can't keep up. Regardless of the perception de jour, the reality is that 5,000 of our soldiers have died and many more are still in harms way. Of course, I must be geographically challenged because I thought that the kin to the people who they let fly on 9.12.2001 (when everyone else was grounded) was in Pakistan or Afghanistan, not Iraq...."

So, how many lives were saved from terrorist attacks or whatever? and how many terrorist attacks were "successful" in murdering innocent lives? - - was it worth it?, If you were President, and talking to the berieved, could you justify it? - - - Oh well read the rest here http://financialsense.com/fsu/editor...2009/0731.html

Continue listening to the podcasts and reading whilst I download some images of my build project - link is in my "signature area" aveagoodweekendanddon'tforgettheaerogard....

[Frosty]

A group of Americans have been found guilty of conspiring to cause terrorism in other countries , they were white!!!!

[masalai]

Frosty, you did not finish the sentence "...Mr Black Obama has said that America is showing signs of coming out of the recession,--- INTO DEPRESSION...." I am advised that he also tells the truth - but fails to finish sentences sometimes

Our Mr Ruddy, has a propensity to voclaise indiscrimiantenonsensical sendoverthetop andevenusesome Mandarinchinese affirmations - - I could do better but after several too many beers my mindtofinger coordination is somewhat recalcitrant...

Um in white sheets with pointy tops?

I am OK, just thought someone may be interested in snapping up a bargain (will be so in a year or so) and the Opera House and Sydney Harbour & the bridge are sold.... Uluru is still available but I doubt the custodians will sell yet...

The AU$ fetches .8360 US cents, - Gold US$954.50 in closed time, - - - and, I am going to see what a US banker looks like - actually I am not going to look, just flush it

THIS IS ALL ABOUT THE US HEALTH CARE - - HR 3200 under consideration in the House - - - READ IT... http://lc.org/media/9980/attachments...ama_072909.pdf

[masalai]

Casey Research, "free" daily dispatch, weekend edition has a discussion on the recent performance of the markets (in USA) which is quite interesting, and worrisome - do subscribe and keep yourself informed with daily emails...

Brian Ireland has an interesting post here http://www.boatdesign.net/forums/ope...tml#post290358

Frosty = "Oh ****".... http://www.bangkokpost.com/news/inve...ve-and-ticking and http://www.bangkokpost.com/news/loca...4-nukes-target Now another potential rogue state with "N Korean technology Nukes"

[Frosty]

Health care ??? No need for this guy.

http://news.bbc.co.uk/2/hi/americas/8180116.stm

Do you remember when we laughed at the Taliban for hanging TV's in trees as a punishment.

This man lives in America and ----looks normal.