As Transparent as a Cesspool

This Huffington Post piece, "Accountants, Washington Helping Banks Fluff Profits," illustrates why it's so frustrating to watch this financial crisis play out, day after day.

We need greater transparency in the financial system. Nobody -- right, left, center, right of center, left of center, center of right of left of center -- contests that. Nobody has said, "What we need in America are more off-balance-sheet vehicles, derivatives traded in back alleys, murky accounting rules, hard-to-understand securitizations."

If we need more light, we do we keep embracing the darkness? I don't get it.

And if you don't like "mark-to-market rules" (accounting standards that value an asset on a company's books according to what it's worth at that moment, freely traded), then what do you like? Mark-to-whatever-you-feel-like-it rules (these by the way, in their more reputable guise, are known as "mark to model")?

If you're an accountant, the nice thing about a financial asset should be that it's not a friggin' puppy. It doesn't have sentimental value. That CMBS in the back room isn't worth $5 million to me but $10 million to you because you like its big brown eyes and curly cashmere-soft coat.

At day's end (so to speak), it pays out X dollars, and that's what matters. That's how the market prices it. If you claim it's worth $10 million, but Joe Investor will give you only $5 million, but it IS really worth $10 million (assuming reasonable rates of return), guess what? Fred Investor will step in and give you $9.7 million say, recognizing a good deal when he can get one.

But if you can't get anything near $10 million, for God's sake, don't turn purple and start throwing your paperweights around the office, swearing about those "damn accounting rules." I know in America it's always in fashion to blame someone else, not yourself. But in this case, you really need to man up. If you're holding a stinkbomb, deal with it honestly, instead of trying to bend every accounting rule in sight.