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To: okie01
Before Sarbanes-Oxley -- an ill-considered over-reaction to the Enron scandal -

Amen to that!

16 posted on 04/02/2009 10:17:49 AM PDT by TeleStraightShooter (His Excellency Barack Hussein Obama, Head of Government, Duce of Fascism,and Destroyer of Capitalism)
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To: TeleStraightShooter; MeneMeneTekelUpharsin; CutePuppy; okie01; texmexis best
Uh... what no one is mentioning is the effect this has on the confidence of international investors and the people who loan us the money.

It would be one thing if we had reason to suppose that the valuations produced by available mark-to-model methodologies was meaningful for many of these financial instruments, or if there was some sort of effective mechanism - or even the near-term prospect of same - in place to ensure that an attempt was at least being made to make them as meaningful as possible.

Instead what we've got is regulatory churn for short-term political gain absent any such controls on its abuseand little public discussion of the cost in terms of inventor and central-bank confidence in already highly suspect valuations.

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Mark-to-market is not required by Sarbanes-Oxley, and there are existent mechanisms to deal with problem of "temporarily impaired" assets. FASB 157 allows non-level 1 classified of assets in a disorderly market and allows regulated capital valuations to be molded. If someone tries to tell you differently refer them to the 9/30/08 SEC/FASB statement on this question:

http://www.sec.gov/news/press/2008/2008-234.htm

Where Sarbanes-Oxley coms into this that banks - often on the advice of their auditors - elected to use market valuations because they felt if gave executives protection against accusations of having made material misstatements on valuation issues.

30 posted on 04/02/2009 9:20:15 PM PDT by M. Dodge Thomas
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