“The ignorance is willful.” I think you can say the same thing about the ongoing banking crisis. Last Thursday, credit rating giant Moody’s downgraded the long-term credit ratings of 15 of the biggest North American and European banks. All but four were cut at least two notches, and these are some of the biggest banks in the world.... The MSM greeted this enormously negative bank news with a yawn. USA Today, which touts itself as “The Nations Newspaper,” covered the story, last Friday, in the newspaper with less than 75 words! What kind of reporting is this?
This is the same treatment the financial press gives to what I call “government sanctioned accounting fraud” that the banks use to value underwater assets on their books such as real estate and mortgage-backed securities. The Financial Accounting Standards Board (FASB) changed the rules in 2009, and the banks can value these assets at whatever they think they will be worth at some fictional date in the future. Instead of“mark to market” accounting where assets are valued at what they will sell for today (this is how the IRS does it), you have “mark to fantasy” accounting where you value the assets at what you hope to get for them in the future. This is an insolvency problem so big that FASB had to change the accounting rules to make people think some banks are still solvent.
................. By Greg Hunter’s USAWatchdog.com
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