{"id":5217,"date":"2009-01-28T21:22:14","date_gmt":"2009-01-29T01:22:14","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=5217"},"modified":"2009-01-28T21:22:14","modified_gmt":"2009-01-29T01:22:14","slug":"january-28-2009","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=5217","title":{"rendered":"January 28, 2009"},"content":{"rendered":"

Pussycat, in a desperate attempt to sound tough, is putting What-Debt? on “probation”<\/a>:<\/p>\n

[Pussycat] said his party is prepared to \u201cswallow hard\u201d and support the Conservative government, provided they agree to table regular updates outlining how they are living up to their commitments outlined in the federal budget.<\/p><\/blockquote>\n

We have now officially forgotten the lesson of hitting the wall in 1994 – I confidently predict twenty years of deficits until we hit the wall again.<\/p>\n

Rubin has spoken out against fair-value accounting<\/a>:<\/p>\n

\u201cI spent my whole life at Goldman Sachs believing in mark- to-market accounting, and having said that, if you look at the experience from the last two years, I think mark-to-market accounting has led to terrible vicious cycles in asset prices,\u201d Rubin, the former U.S. Treasury secretary, said during a discussion at the 92nd St. YMCA late yesterday.<\/p>\n

Companies including Citigroup and American International Group Inc. say mark-to-market, also known as fair-value accounting, doesn\u2019t work when few buyers are willing to trade assets like subprime mortgages. Proponents such as the U.S. Financial Accounting Standards Board say the rule adds to transparency and gives investors information about companies.
…<\/b>
Under reserve accounting, assets like loans are carried at cost, offset by reserves for potential losses.<\/p><\/blockquote>\n

I have stated many times that the regulatory regime should differentiate between banks and investment firms. Fair value accounting is appropriate for investment firms, at which the default assumption is that they hold assets for a short period, then sell them. Reserve accounting is often (though not always) more appropriate for banks, at which the default assumption is that they hold assets until maturity.<\/p>\n

The FOMC released its monetary policy statement<\/a> today – no real surprises.<\/p>\n

The BoC has released an analysis of bond auction formats<\/a> by Olivier Armantier and Nourredine Lafhel, examining the methods by which bonds can be auctioned. Three systems are considered:<\/p>\n