The FASB buckles

Narrowly winning the award for most depressing news of the week (the runner up being Gillian Tett getting an award - and not one for most ignorant commentator on credit derivatives in a mainstream newspaper), Bloomberg announces:

The Financial Accounting Standards Board, pressured by U.S. lawmakers and financial companies, voted to relax fair-value rules... The changes to so-called mark-to-market accounting allow companies to use “significant” judgment when gauging the price of some investments on their books, including mortgage-backed securities.

This is just terrible news for readers of financial statements, investors, and financial stability.

Update. You have to love Willem Buiter sometimes. His latest is entitled How the FASB aids and abets obfuscation by wonky zombie banks. Zombies are scary enough. But wonky zombies? Are they going to explain the dynamics of the money supply to you before they eat you? Or would that be wonkish zombies? Seriously, though, it is a good post: I recommend it. My only remark is that Willem is not sanguine about the IASB, whereas I am slightly more hopeful that they will not fall further into sin.