You scratch my back; I’ll scratch yours. The Securities & Exchange Commission has announced it is changing the rules for the banks’ reporting of bad/questionable debt instruments. As Bloomberg reports, this amounts to letting banks out of certain arcane accounting rules with the result that they do not have to reflect the full extent of the damaged credit on their balance sheets: http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_weil&sid=aPSScH5rRBLM
This is known as putting lipstick on a pig. Query why then did the FBI announce a criminal investigation relating to the subprime mess: just to make it look as if the government is going after the source of the problem, while behind the scenes doing what it can to make sure the banks will be a-okay?