Thursday, July 31, 2008

2 of 5


"What we expected and deserve:"



"What we are getting:"


Adolescent fantasies aside I am referring to the FASB ruling on off balance sheet accounting. From Bloomberg Jul 30:
FASB Postpones Off-Balance-Sheet Rule for a Year (Update1)
By Jody Shenn and Ian Katz

July 30 (Bloomberg) -- The Financial Accounting Standards Board postponed a measure, opposed by Citigroup Inc. and the securities industry, forcing banks to bring off-balance-sheet assets such as mortgages and credit-card receivables back onto their books.
....
The Securities Industry and Financial Markets Association and the American Securitization Forum complained that the changes, which could affect as much as $11 trillion of off-balance-sheet entities, may make companies appear short of capital to regulators and lenders.
...
The ``abrupt consolidation'' of off-balance-sheet structures ``is likely to swell the balance sheets of the affected entities.''
...
Many lenders made profits in the run-up to the subprime- mortgage crisis by selling pools of loans to off-balance-sheet trusts known as qualified special purpose entities, or QSPEs, which repackaged the pools into mortgage-backed securities. Some banks then sold those securities to other off-balance-sheet vehicles they sponsored, such as so-called asset-backed commercial paper conduits.
...
The off-balance-sheet entities are ``orphan trusts'' that represent ``securitization gone wild,'' he said.

Securitization gone wild? We can do that:

Unlike the FASB this time the mud being thrown isn't obscuring what is going on.

21 comments:

soem dood said...

Murst?

Rob Dawg said...

You are up oily dood. ;-)

H Simpson said...

I have been expecting this for some 5+ months.

FASB get told: You best ditch that hairbrain scheme. Nobody needs any of your smart ass accountants when all our firms go tits up.

Now go fetch me another scotch son.

w said...

Funny coincidence, I was thinking of holding some of my income off book this year!

Northern Renter said...

Blame it on my Y chromosome, but I've always been a big fan of Jeri Ryan. Wasn't she (in a way) responsible for Obama's election as a senator?

NR

Casey Serin said...

Answer: "Seven of Nine."

Question: What is, "The rate at which lenders didn't do their due diligence when deciding to give money to a shiftless fraudster like myself?" ;-)


OK, actually it was "8 out of 9", but you get the idea. heh. Thank heavens for that 9th lender, otherwise I'd have ended up with around 50 houses or so!

H Simpson said...

Casey

we know you didn't go to all your floorclosures on the courthouse steps.

Can you expect you to try and dodge out of the arraingements when they come after you on multiple frauds?

h.

Casey Serin said...

Can you expect you to try and dodge out of the arraingements when they come after you on multiple frauds?

I'm not scared of the FBI... this is California after all, where half of the citizenry committed mortgage fraud in one form or another. ;-)

Even Robbo knows that due to statute of limitations considerations, the clock is ticking. I praise the Lord every day that I live in California -- because if I pulled these schemes in a tougher state like Texas, Texas, they would've had me dancing at the end of a rope by now. :-p

Akubi said...

Fat Cat Is Victim Of Foreclosure

Edgar Alpo said...

I want to sell my house to my off balance sheet self for one bazillion dollars. After I collect my sweet bazillion dollars my deadbeat off balance sheet alter ego can get drunk and tear out the plumbing, electrical, etc., for some booze and cig. money. Awesome idea dude!

bohica said...

A bit OT, but :

http://www.break.com/index/putting-the-fore-in-foreclosure.html

Project SCOBY Doo™ said...

Fat Pomeranians shall rule the world ;)!

Tach said...

I have a question for the economists who peruse this blog.

Where did the money go? This is something that I have to admit has always mystified me.

Is the assumption that all or virtually all went into consumer spending? And does that mean that the growth of the US economy over the last 5-10 years (correct timespan?) was completely artificial?

Is there any analysis out there of GDP growth where someone has attempted to separate out the money from the housing bubble to see what the real growth of the US economy was?

And a final question: Are these stupid questions? :) I honestly don't know.

Casey Serin said...

Has the blog been abandoned yet again, Robbo? ;-)

Son of Brock Landers said...

@Tach - As a suggestion, you could search Calculated Risk, as he might have run some charts of graphs with residential investment normalized or mortgage equity withdrawals removed. I think he has done this a couple of times. If not, a broad internet search might yield some graphs showing the impact of the bubble and MEW if it can be quantified in a reliable manner. Spending on higher education is considered consumption, which I bet many MEWs were used to cover in the last 6 years, but I would consider that investment or at least good consumption.

Rob Dawg said...

Busy. Some actual work (tiring) and picking up the pieces of dropped blue balls. You know how it is Casey.

Blogger has acting up and I've been improving the home network.

Also trying to explain to UCLA why paying so much right now is a bit difficult.

soem dood said...

C'mon, Casey, you have been around long enough to know how things work here.

Had you properly interpreted the pictures on the latest entry, you would have obviously and immediately seen that the use of Seven of Nine, who was assimilated by a Borg at a young age, was a plain reference to her early issues of dissociation with the hive mind, which, juxtapositioned against the Blogosphere context, can only lead one to the conclusion that a temporary blog hiatus was upcoming.

Sheesh. So simple.


"This is the shameless Tip Jar wherein money to move EN to a permanent home may be deposited."

w said...

Come on Rob, just travel to Mexico and tell the hospital there that you are an indigent illegal alien and I'm sure they will handle all of your health care needs.

w said...

Wow, the nice family that just overpaid for the bank's house a few doors down is in trouble now that the husband with a great secure job just lost it. I hope they pull through this. I think the house is cursed. The third owner ago jumped into another home with a dangerous loan, the second owner ago lasted like 9 months and walked from his $0 down loan.

Now that the whole state is stretched tight financially it will be an interesting recession.

Pleather Murse said...

"Gov. Arnold Schwarzenegger proposed during private negotiations over the weekend to close the state's $15.2-billion budget gap with a temporary (sic) but immediate one-cent hike in the state sales tax, according to legislative sources. ... Los Angeles County residents could face a separate half-cent-on-the-dollar sales-tax increase. The Metropolitan Transportation Authority board has proposed such a measure for the November ballot, with the money to fund transportation projects. If both the MTA and the Schwarzenegger proposals were to be implemented, the sales tax in Los Angeles County would jump to 9.75%." LA Times 5 Aug 08

w said...

Can I have my 3% per year worked at 55 please?