It's About Time

Well it looks like the straw that broke the camel's back was my previous post on "Valuations."

OK, OK, I understand politicians don't read my blog, but what has transpired with the FASB (Federal Accounting Standards Board) relaxing the disastrous Mark To Market accounting regulations, give me reason to hope there is some sanity left amongst some of our congressman and government regulators.

Bloomberg Business, has a fine article detailing these revisions and how they will help our banking system and in turn spur the economic activity needed for every individual and business to prosper.

For those of you not so familiar with accounting practices, I've included a short little video explaining what Mark To Market really does here and how it's misapplication creates havoc with balance sheets.

Next we can only hope that congress also sees the error in the repeal of the Glass-Stegall Act. Commercial banks have no business in the rough and tumble volatile markets that investment banks work in as it jeopardizes the certainty needed in the credit markets to keep our economy liquid.

Commercial banks can maintain stability and generate more than enough income from the spread between what interest is paid to their depositors and the interest charged on the loans they make. With a return to sound underwriting fundamentals, which basically means verifying income and the debt to asset ratio of it's loan applicants, banks will once again become the sound financial institutions every citizen has the right to expect.