Information about finance, the economy and business. Entertaining and informative. Seeking Alpha Certified Mark Sunshine Chairman & CEO

Category Archive: Accounting

  1. Securitization Accounting Rules Are Changing

    Accoun­tants are chang­ing the rules gov­ern­ing most of the shadow bank­ing sys­tem and almost no one is notic­ing. About 10 days ago the Finan­cial Account­ing Stan­dards Board con­firmed that by year end “secu­ri­ti­za­tion account­ing” will be dif­fer­ent and the changes are likely to have a big­ger effect on finan­cial insti­tu­tions than mark to mar­ket account­ing. […] [read full story]

    Posted in: Accounting, economy, FAS 140, FIN 46, Finance, Public Policy, Securitization
  2. A Letter To President Elect Obama – How to restore confidence

    Dear Pres­i­dent Elect Obama: As you get closer to inau­gu­ra­tion I would like to make a few sug­ges­tions for your admin­is­tra­tion and its future eco­nomic pol­icy. Every­one knows that the econ­omy is in trou­ble and con­fi­dence in the future is low. Con­fi­dence in the United States eco­nomic sys­tem and gov­ern­ment is our nation’s most impor­tant asset. Unfor­tu­nately, […] [read full story]

    Posted in: Accounting, BANKS, Confidence, Credit Crisis, Credit Default Swaps, Deflation, economy, Fannie Mae, FAS 140, FASB, Finance, Fiscal Policy, Freddie Mac, Mark to market accounting, Obama, Politics, Public Policy, Regulatory Reform, SEC, Securitization
  3. Sorry, big Federal spending doesn’t restore confidence. Five common sense confidence builders.

    Last Fri­day evening I was a guest on FOX Busi­ness and was asked if I thought whether the Paul­son Plan (which had just been approved by the House of Rep­re­sen­ta­tives) would improve con­fi­dence. The answer is an uncon­di­tional NO. Con­fi­dence is an expres­sion of trust in the integrity and wis­dom of our sys­tem and its […] [read full story]

    Posted in: Accounting, Confidence, Criminal Law, Finance, FOX BUSINESS NETWORK, Paulson
  4. Mark to Market Accounting – It’s Like The Blob; We Need to Kill It Before It Eats Us Alive!

    We need to kill mark to mar­ket account­ing before it eats us alive. These account­ing rules are like The Blob, an alien life form that con­sumes every­thing in its path as it grows and grows. Both the Blob and mark to mar­ket account­ing crawl, creep and eat every­thing dead or alive in their path. We […] [read full story]

    Posted in: Accounting, FAS 157, FAS 159, FASB, Finance, Mark to market accounting, The Blob
  5. McCain: “Fire Cox”; Sunshine: “McCain’s wrong. Fire Cox and then exile him. His family can stay…they aren’t guilty.”

    Almost all paths of incom­pe­tence in the cur­rent cri­sis run through the office of the Chair­man of the SEC, Chris Cox. McCain’s solu­tion to fire Cox isn’t tough enough. Exile is bet­ter. For­tu­nately for Cox this isn’t the Stal­in­ist Soviet Union or his fate could be a lot worse. Cox’s fail­ures are too numer­ous to count. […] [read full story]

    Posted in: Accounting, Chris Cox, Disclosure, economy, FAS 157, FAS 159, FASB, McCain, SEC, Short Selling
  6. LUNCHTIME TALK: “IF I LIVE 1,000 YEARS I WILL NEVER UNDERSTAND THAT ACCOUNTING RULE! IT’S DISHONEST!”" rel="bookmark">LUNCHTIME TALK: “IF I LIVE 1,000 YEARS I WILL NEVER UNDERSTAND THAT ACCOUNTING RULE! IT’S DISHONEST!”

    Last week I had lunch with Marty Schiff­man who told me that “If I live 1,000 years, I will never under­stand that account­ing rule! It’s dis­hon­est!” Marty was, of course, talk­ing about the appli­ca­tion of mark to mar­ket account­ing rules by major finan­cial insti­tu­tions. Marty Schiff­man is not the “aver­age” man on the street; he […] [read full story]

    Posted in: Accounting, BANKS, Confidence, Credit Crisis, FAS 157, FAS 159, FASB, Regulatory Reform
  7. SUNSHINE’S FIXES” – FIVE REGULATORY FIXES THAT CAN BE ENACTED IMMEDIATELY" rel="bookmark">SUNSHINE’S FIXES” – FIVE REGULATORY FIXES THAT CAN BE ENACTED IMMEDIATELY

    Yes­ter­day on FOX Busi­ness Net­work I was inter­viewed by Con­nell McShane and dis­cussed the Fed­eral Reserve’s “reg­u­la­tory fixes” for the sub-prime mort­gage mar­ket. Dur­ing the inter­view, I sug­gested that the new Fed­eral Reserve reg­u­la­tions are a joke and make us a global laugh­ing stock. I stated that the “US doesn’t have a short­age of laws” […] [read full story]

    Posted in: Accounting, BANKS, Brokerage, Credit Crisis, Federal Reserve, FOX BUSINESS NETWORK, Regulatory Reform
  8. THE EARNINGS ILLUSIONFAS STATEMENT 157 AND FAS STATEMENT 159" rel="bookmark">THE EARNINGS ILLUSIONFAS STATEMENT 157 AND FAS STATEMENT 159

    Appar­ently, I am not the only per­son to notice that banks and bro­kers have been book­ing “phan­tom” earn­ings. On June 2nd Bloomberg’s Bradley Keoun wrote a great story on the topic, reprinted below, includ­ing pro­vid­ing a his­tory les­son on who lob­bied FASB to include lia­bil­i­ties in mark to mar­ket account­ing. I keep on blog­ging about […] [read full story]

    Posted in: Accounting
  9. FAS STATEMENT 157 AND FAS STATEMENT 159 – “SOMEWHERE OVER THE RAINBOWTHERE’S A WORLD WE CAN TRUST" rel="bookmark">FAS STATEMENT 157 AND FAS STATEMENT 159 – “SOMEWHERE OVER THE RAINBOWTHERE’S A WORLD WE CAN TRUST

    Just like Dorothy in the Wiz­ard of Oz, I yearn for a bet­ter place, a place where com­mon sense and decency trumps greed and avarice, a world where FAS State­ment 157 and FAS State­ment 159 won’t exist and man­age­ment teams won’t be able to make up pre­tend finan­cial state­ments with impunity. I believe in a […] [read full story]

    Posted in: Accounting
  10. FAS STATEMENT 157 AND FAS STATEMENT 159 – CORPORATE EARNINGS MEET THE WIZARD OF OZ" rel="bookmark">FAS STATEMENT 157 AND FAS STATEMENT 159 – CORPORATE EARNINGS MEET THE WIZARD OF OZ

    Some­times real­ity is stranger than fic­tion and mark to mar­ket account­ing is one of the strangest real­i­ties in gen­er­a­tions. By adopt­ing FAS State­ment 157 (Fair Value Account­ing)  and the related FAS State­ment 159 (the Fair Value Option for Finan­cial Assets and Lia­bil­i­tites), the Finan­cial Account­ing Stan­dards Board (“FASB”) has made cor­po­rate earn­ings a trip down […] [read full story]

    Posted in: Accounting