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John

I like the theory, but it doesn't provide me much peace of mind. If we are truly at a bottom because FASB is reassessing its requirements for reporting the value of assets, we haven't learned anything.

Fair value reporting has existed since the early 90s and FASB 133 (1998) addressed the reporting of derivatives. There were several amendments to 133 in the following years for various reasons (new instruments to address, fine tuning).

While 157 went into effect on Nov 15, 2007, it was announced over a year earlier and I can guarantee banks didn't wait for the last day to get their accounting in line. The markets rose for a year after the announcement of 157 and actually started their decline a month before it went into effect.

Personally, I think the major destabilization came from these banks putting crap on their books. Just because they can now go back to making up values for assets doesn't solve anything.

If you are correct and this rally is based on the neutering of 157, we'll be back here some day.

Nate
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