The much maligned accounting principle of “mark to market” accounting has received an important clarification today from regulators at the SEC.

“When an active market for a security does not exist, the use of management estimates that incorporate current market participant expectations of future cash flows, and include appropriate risk premiums, is acceptable.” source

FASB 157 came about as a result of the Enron scandal and subsequent regulations contained in the onerous Sarbanes Oxley Act.

Hopefully this is a first step toward its full repeal.

It is important to note that the SEC is NOT saying that cooking the books is now an acceptable accounting practice. That would be the last thing that corporate America needs in order to restore public confidence. Transparency is necessary, and the SEC’s clarification will help investors to see a much truer picture of the financial health of the corporate balance sheet. Perhaps, after the debacles of Bear Stearns, Lehman, Merrill, Wachovia, Wamu, and AIG, the SEC sees this as a way of acknowledging that many of the weaker players and their related toxic assets have been identified and dealt with, and it’s time to protect the healthier players that remain.

It becomes crucial as the Treasury anticipates buying some $700 billion in mortgage-backed securities, and in effect, establishing a market price for illiquid assets. A direct consequence would be that the remaining banks would have to take a write down on their assets to reflect the new market price.

This is an important clarification from the SEC. It will have an important and immediate impact.

from Chicago Sun-Times

A $100,000 state grant for a botanic garden in Englewood that then-state Sen. Barack Obama awarded in 2001 to a group headed by a onetime campaign volunteer is now under investigation by the Illinois attorney general amid new questions, prompted by Chicago Sun-Times reports, about whether the money might have been misspent.

The garden was never built. And now state records obtained by the Sun-Times show $65,000 of the grant money went to the wife of Kenny B. Smith, the Obama 2000 congressional campaign volunteer who heads the Chicago Better Housing Association, which was in charge of the project for the blighted South Side neighborhood.

Smith wrote another $20,000 in grant-related checks to K.D. Contractors, a construction company that his wife, Karen D. Smith, created five months after work on the garden was supposed to have begun, records show. K.D. is no longer in business.

Although decried by Chicago mayor Bill Daley, McCain’s recent ad about Chicago machine-politics seems to be right on the mark.

All together now, look real surprised.

“Shame on all of yuns”
Today at a McCain townhall meeting, a McCain supporter expressed the outrage of millions of Americans who have had it with the MSM effort to destroy Sarah Palin and coronate the Obamessiah.

“Where are your 30 investigators in Chicago looking at (Rezko) and Ayers?”

Where, indeed.

Here is the text of the massive new RTC-bailout propgram proposed by Sec. Hank Paulson:
LEGISLATIVE PROPOSAL FOR TREASURY AUTHORITY

TO PURCHASE MORTGAGE-RELATED ASSETS

Section 1. Short Title.

This Act may be cited as ____________________.

Sec. 2. Purchases of Mortgage-Related Assets.

(a) Authority to Purchase.–The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States.

(b) Necessary Actions.–The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation:

(1) appointing such employees as may be required to carry out the authorities in this Act and defining their duties;

(2) entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code, without regard to any other provision of law regarding public contracts;

(3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;

(4) establishing vehicles that are authorized, subject to supervision by the Secretary, to purchase mortgage-related assets and issue obligations; and

(5) issuing such regulations and other guidance as may be necessary or appropriate to define terms or carry out the authorities of this Act.

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From Time Magazine:

A remarkable collection of photographs by award-winning photojournalist James Nachtwey.

Never Forget.