Pssst buddy ‘How much you want for that toxic asset? UPDATE below

At a recent White House meeting the CEOs of the most powerful financial institutions in the world offered several explanations for paying high salaries to their employees — and, by extension, to themselves.” These are complicated companies,” one CEO said. Offered another: “We’re competing for talent on an international market.”
But President Barack Obama wasn’t in a mood to hear them out. He stopped the conversation and offered a blunt reminder of the public’s reaction to such explanations. “Be careful how you make those statements, gentlemen. The public isn’t buying that.”
“My administration,” the president added, “is the only thing between you and the pitchforks.”

Why does this wonderful exchange with Obama get leaked on a day when a curious new rule change is announced by the The Financial Accounting Standards Board? Banks are required to value their assets in a certain manner .The Board now will allow companies more leeway in valuing assets and reporting losses. They can estimate the value based on cash flows on their balance sheets rather than using the value the asset would receive if sold immediately. One analyst said the decision "allows financial institutions to use fictional valuations on many of their toxic assets" and further obscures their true position
I make no claim here to any great insight into the banking business but this flexibility in valuing toxic assets on paper rather than on the value an asset would receive if sold , sounds like more of the same bad banking craziness that got us where we are today. Who knows?

The changes should help boost battered banks' balance sheets and financial stocks rallied on Wall Street, but the rules may undercut a new financial rescue program.
In the short run, banks would benefit by raising the value of the assets. But higher values could drive away prospective private investors - who don't like to overpay, even though the government will absorb most of the risk. They can estimate the value based on cash flows on their balance sheets rather than using the value the asset would receive if sold immediately.
The Financial Accounting Standards Board issued new guidelines under the mark-to-market accounting rules, which require companies to value assets at prices reflecting current market conditions. The changes, which apply to the second quarter that began this month, will allow the assets to be valued at what the banks project they might sell for in the future, rather than in the current, distressed environment.

UK.rueters
www.efgate.com
UPDATE :Bailed-out banks eye toxic asset buys
FT.com

US banks that have received government aid, including Citigroup, Goldman Sachs, Morgan Stanley and JPMorgan Chase, are considering buying toxic assets to be sold by rivals under the Treasury’s $1,000bn (£680bn) plan to revive the financial system.
The plans proved controversial, with critics charging that the government’s public-private partnership - which provide generous loans to investors - are intended to help banks sell, rather than acquire, troubled securities and loans.
But public opinion may not tolerate the idea of banks selling each other their bad assets. Critics say that would leave the same amount of toxic assets in the system as before, but with the government now liable for most of the losses through its provision of non-recourse loans.

That’s it I am not reading anything more about the banking industry. It’s almost as if the same people that caused the banking world to crater are still in charge …well I guess they are .