Let’s see if you, boys and girls, can see any connection between these two stories:
Chastened after seeing what havoc telling the truth played on the economy, the Financial Accounting Standards Board has decided that smoke and mirrors is better after all:
The Financial Accounting Standards Board agreed to allow companies to use their own judgment to a greater extent in determining the "fair value" of their assets. The board also made it easier for companies to avoid having to take impairment charges when they suffer losses on their investments.
After more than a year of crippling losses and three bailouts from Washington, Citigroup, a troubled giant of American banking, said Friday that it had done something extraordinary: it made money.
That’s easy, Spotty; the answer is in the next few paragraphs of the NYT article you linked:
Like several other banks that reported surprisingly strong results this week, Citigroup used some creative accounting, all of it legal, to bolster its bottom line at a pivotal moment.
While wisps of recovery are appearing in the nation's banking industry — mortgage lending and trading income are up industrywide — many banks are doing all they can to make themselves look good.
The timing is crucial. Federal regulators are preparing to disclose the results of stress tests that could determine which banks are strong enough to return the taxpayer dollars that they have accepted, and which might need more. Many banks are eager to extricate themselves from the strings attached to the government bailout money, including restrictions on pay.
Meredith A. Whitney, a prominent research analyst, said in a recent report that what banks were doing amounted to a "great whitewash." The industry's goal — and one that some policy makers share — is to create the impression that banks are stabilizing so private investors will invest in them, minimizing the need for additional taxpayer money, she said.
Right-O, grasshopper. Tracy said “We wuz robbed; the banks are doing fine.” Well, the truth is almost more sinister; the new fix is in. Citigroup is in no better shape than it was a few weeks ago, but the accounting rules have changed, see?