"Yet at a conference Thursday morning, FASB chairman Robert Hertz reminded both investors and preparers that his staff issued an unusual six-page 'reminder' back in December 2005 that warned investors that investments in subprime mortgages were risky. ... The financial vehicles into which these features were packaged become 'ticking time-bombs,' Hertz said earlier this month at a joint meeting of the FASB and the International Accounting Standards Board in London. ... At that meeting, Hertz added that the securitization of those loans had made improper use of an accounting mechanism known as a qualified special purpose entity of QSPE. Both U.S. and international accounting standards setters are now looking to eliminate QSPEs", http://www.cfo.com/, 1 May 2008.
I agree with Hertz. The accounting for QSPEs was improper when they were created. See my 6 February 2008 post. I bet Hank Paulson, Chris Cox, Conrad Hewitt and Mark Olson are furious with Hertz over his position. Tough.
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