If Barack Obama ends M2M accounting, credit will flow once more, and the U.S. economy will recover in some fashion this year.
Nevertheless, there is a feeling that antitrust policy may have become too lax in fast-consolidating industries such as accounting, consumer credit and computing.
Will change to the M2M accounting rules get credit flowing again?
Other government policies that have distorted financial markets, thereby undermining the EMH, include shielding credit-rating agencies from lawsuits, government-sanctioned fair-value accounting rules, enforcing credit-default swaps where there is no insurable interest, mispriced deposit insurance, government-sponsored enterprises, and the over-promotion of home ownership.
Last month came revelations of suspect accounting practices at Nippon Credit Bank, which hid massive losses in dummy companies.
Consequently, it passed a law prohibiting auditors from prescribing any particular accounting treatment of the credit--thereby allowing companies to flow the credit through to earnings all at once or amortize it as they pleased.
FORBES: Why Everybody's Jumping On The Accountants These Days
And mark-to-market accounting meant that banks were valuing illiquid assets at prices which reflected a lack of buyers as much as underlying credit quality (accounting-standards bodies have since been bullied into allowing bankers to exercise more judgment in how they classify and value such assets).
Through its cooperative data model, Sageworks collects financial statements for private companies from accounting firms, banks and credit unions, and aggregates the data at an approximate rate of 1, 000 statements a day.
Construction Sector DataThrough its cooperative data model, Sageworks collects financial statements for private companies from accounting firms, banks and credit unions, and aggregates the data at an approximate rate of 1, 000 statements a day.
FORBES: Private Builders' Sales Are Rising and So Are Their Costs
Sageworks collects financial statements for private companies from accounting firms, banks and credit unions through its cooperative data model, aggregating the data at an approximate rate of 1, 000 statements a day, and analyzing the performance.
FORBES: Private-company credit risk shows signs of improving
Sales trends for privately held companiesThrough its cooperative data model, Sageworks collects financial statements for private companies from accounting firms, banks and credit unions, and aggregates the data at an approximate rate of 1, 000 statements a day.
Profitability of privately held gas stationsThrough its cooperative data model, Sageworks collects financial statements for private companies from accounting firms, banks and credit unions, and aggregates the data at an approximate rate of 1, 000 statements a day.
FORBES: You think you hate high gas prices? Try selling the stuff.
In the past 20 to 30 years, banks have gone from the major suppliers of credit at the heart of the financial system to just another supplier of credit, maybe accounting for a quarter to 20% instead of 60% or 70%.
Type in a ticker symbol at riskgrades.com and you'll soon see grades for a firm's market, credit, governance and accounting risk.
Accounting fiddles, such as replacing Family Credit (spending) with the Working Families Tax Credit (not spending) have helped too.
Corporations became heavy sellers of auction rate securities last year even before the credit crisis, because of accounting rule changes that made them less advantageous.
Last week rivals including Morgan Stanley also managed to squeeze out profits thanks to accounting maneuvers resulting from changes in debt-related credit value.
FORBES: UBS Ekes Out Profit Despite $2 Billion Rogue Trading Loss
Although the group's shares are listed in New York, Credit Suisse reports neither under American nor under international accounting standards, preferring the less burdensome Swiss variety.
So it's a safe bet that the era of American dominance will not be brought to a close by credit default swaps, mark-to-market accounting or (even) Barney Frank.
As well as being highly geared, with its latest issue of debt rated by credit agencies as low as junk, Warner Music has accounting problems inherited from its former management.
The list of culprits for the woes afflicting banks includes bankers' pay, credit ratings, ill-prepared boards, sleepy supervisors, accounting regimes, flawed risk models and Alan Greenspan.
ECONOMIST: Are league tables to blame for the industry's ills?
But there is no doubt that the summit's action plan includes a long list of financial sector dimensions to be addressed, including: accounting standards, hedge funds, risk disclosures, financial sector assessments, credit rating agencies, risk-management and stress-testing models, international standard setters, sanctions for misconduct, reporting to supervisors in different countries, and more.
Some of the topics include: credit and collections, hiring, financing, marketing, invoicing, accounting and so on.
Bank credit extension in the first quarter of this year has slowed, accounting for just under 5% of GDP in the first for loans in Chinese yuan, down from 6.5% of GDP in the first quarter 2010.
The bank as a whole would be turning a handsome profit were it not weighed down by an ailing investment bank and by nonsensical accounting rules that force banks to take losses on their own debt when their credit ratings improve.
Abandoning an automatic credit for biogenic carbon is the only way to define a consistent GHG accounting framework without resorting to unverifiable assumptions about the extent of net carbon uptake that complicate other approaches, DeCicco argues.
In 1971, for example, the now-defunct Accounting Principles Board, in the interest of conservative financial reporting, stated that the investment tax credit should be amortized over the life of the asset for which it applies.
FORBES: Why Everybody's Jumping On The Accountants These Days
Given the tighter credit hurdles potential homebuyers must jump through to acquire mortgages these days, hard cash is accounting for more and more home purchases.
FORBES: Existing-Home Sales Fall Again, According To National Association Of Realtors
To their credit, for some time now the biggest Russian companies have been releasing profit reports that meet American accounting standards (yes, they're that good).
Although exposures to Dubai World were relatively diffuse and containable, despite some concentrations in British and UAE banks, they are a reminder of the remaining losses stemming from the credit boom, some of which have been obscured by the removal of mark-to-market accounting.
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