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Huge Accounting Changes…How Will It Impact the Market?

By admin on Apr 3, 2009 in Financial Serentity

doofus1The good folks who make the accounting rules changed them in a big way yesterday – and that’s what rocked the market.

The Financial Accounting Standards Board (FASB) decided to allow companies to use “significant”judgment in valuing some of their assets. Can you guess which assets they are referring to?  Sure….the mortgages they hold.  Allowing banks to place their own valuations on these assets is like allowing me to recalibrate the scale every time I step on it.  Unfortunately for me, my wife is much tougher than the accounting standards board.

What does this change mean to you? I can’t say exactly.  Some analysts hope that this could unfreeze credit markets.  Others view this as simply a band-aid and another delay in facing the music.  It may be something in between.   I plan on writing a report on this over the weekend and I’ll be sending it to all my subscribers…..so if you want the report consider subscribing dag nab it!

On to Your Homework Assignments:

I know you think that Wealth Pilgrim has cornered the market on genius money ideas but its actually not true.  There are many other fantastic resources as well.  Here are a few wonderful articles I found this week:

Mike over at The Oblivious Investor wrote a piece about personal virtues that good investing requires. Darn!  I wish I’d written that one!

Speaking of virtues, Patrick at Cash Money Life brought up an interesting dilemma.  If you are pregnant, when should you tell your boss?  This brings up some interesting questions.

Are you interested to know the best cities to retire too?  This report will tell you.

Frugal Dad kept the theme going when he asked if parents should pay off their kids’ credit card debt.  My answer, after thinking about it for 2 seconds was….. NO WAY!  You may think differently after reading the article.

Finally, David at Money Ning wrote a very important article about confrontation and how important it is.  We’ve been taught to avoid it but David has other ideas.  I found this article inspiring.

Enjoy a great weekend.  It’s going to be a good one!

Like this article? You will love getting my free brilliant financial updates! No spam, and I won't give your email address to any other person or company.That's a personal promise. Neal Frankle, Certified Financial Planner, Los Angeles, California

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  1. 3 Comment(s)

  2. By Baker @ ManVsDebt on Apr 3, 2009 | Reply

    Interesting indeed. I don’t really know enough about how this could effect the markets, but it just doesn’t feel right deep down.

    [Reply]

  3. By Patrick on Apr 4, 2009 | Reply

    Hmm… I thought it was funny accounting practices that cause this mess in the first place?

    this tells me the problem is probably worse than the government and markets want to let on. I wonder how the markets would react if they insisted on accurate accounting (which they should do).

    Interesting times indeed.

    [Reply]

    Neal Reply:
    April 6th, 2009 at 3:53 am

    Great comment. Funny accounting made these problems much worse…granted. But I believe the root cause was government.

    [Reply]

  4. By SeoBackLinks2u on Apr 6, 2009 | Reply

    Great comment. Bad accounting had made a huge impact on the world economy. These are challenging times ahead.

    [Reply]

    Neal Reply:
    April 6th, 2009 at 5:35 pm

    I couldn’t agree more.

    [Reply]

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