Last month, the blog supported former US Treasury Secretary Brady’s argument that ‘mark to market’ accounting rules were helping to worsen the current financial crisis. It therefore welcomes the decision by the US Financial Accounting Standards Board to revise its rules with effect from April 2. It applauds Paul Kanjorski, chair of the relevant House sub-committee, for forcing this change through so quickly.
It is less optimistic that current Treasury Secretary Geithner’s new plans for dealing with ‘toxic assets’ will work. These seem to be based on the belief that people want to buy these ‘toxic assets’, but can’t find the cash. The blog fears they are ‘toxic’, simply because they will never be repaid.