Subject: File No. 4-573
From: Gilbert F. Viets

December 15, 2008

RE: File No. 4-573
December15, 2008

Probably nothing will derail market, or fair value accounting. But, I would like to make a last pitch for something else. If we were to view and judge a company and its operations based on what it paid for things (cost), as we once did, we would be far better off. So far, I see nothing proving market value accounting is superior, other than for funds that must cash investors in and out.
Transparency is a noble goal, but market transparency is better in the rear view mirror than the windshield. It will always be so, and that is not all bad. Sound accounting should be independent of liquid and illiquid market speculation, up or down. What we need is best factual view.
Many smart people are using transparency as the reason for marking to market. The argument seems to be that financial statements showing assets and liabilities at the market or fair value provide a transparent view of the company. Recent history should cause concern about how transparent market or fair value really is. Investors who bought AIG, Lehman, Merrill Lynch, WaMu, Wachovia and many others at their market, likely see nothing fair about what they paid in the rear view mirror. Once the media, the only regulator with objective hind sight, finishes with Madoff Securities, others will once again suffer the ripple effect of bad market values supplied, with clean audit reports, by trusted third parties.
None of the arguable shortcomings of accounting based on cost hold a candle to disasters created in the last few years by fair value.
Lets return to Will Rogers desire for the return OF my money. If we were to abandon the so called progress of the last thirty years that led to disasters of the last fifteen, then CFOs, auditors, financial advisors, lawyers, regulators and investors could focus on whether assets really exist, liabilities and reserves that may not be recorded at all, and real cash flow, rather than on composite wishful thinking about the future and political affectation. Watchdogs may not need the safe harbors they seek.
What is now most transparent is that market values blending fact, rumor, misinformation and outright lies, is not be the best basis to communicate management effectiveness at running the company.
Give it some thought, please.