One final comment about the financial world: It's populated with rich, hypocritical whiners. Wall Street, the hedge-fund community and their lap dogs in the news media continually brag about how much they love capitalism and free markets.
Yet when the creative-destruction component of capitalism rears its ugly head, they want the central planners to bail them out immediately, before they take any pain. And the ones clamoring the loudest are the very same folks who behaved the most irresponsibly.
Fleckenstein goes on to note that the Financial Standards Accounting Board has allowed much of this bubble to happen right along with the Fed, through it’s officially signing off on counting Level 3 values, based on fair value being measured using “unobservable inputs,” as part of a company’s assets.
See this Bloomberg article for how far Wells Fargo is running with this ball.
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