Subject: File No. 4-573
From: Jeffery B. Cross

October 6, 2008


As a retired securities analyst I have always had a low opinion of so called “fair value” accounting because it allows far too much leeway for interpretative judgment. The accounting which I was taught many years ago in college required a minimum of judgment as an underlying principal, mark to market (together with other than temporary impairment) simply violates this principle. Any cogent investor would rather see things carried at amortized costs and make their own judgment as to the degree to which underlying long term value might be more or less than amortized cost (more detailed disclosures in quarterly reports would be a very important help in this and an excellent improvement in market efficiency long term). Mark to market, while conceived with the best intentions in mind, causes both too much noise in the system and produces a degree of balance sheet variation wholly inconsistent with orderly markets, as must now be all too obvious. It must be eliminated immediately and it must cover the 3rd quarter because of the pass to which we have already come. The Sept 30 Clarification, while it would have been perhaps a modest step in the right direction in normal times, is at present akin to putting a finger in a dyke which has already partly collapsed.

There are more than a few investors, myself included, who view the specific authority for your agency to do this as by far the most important part of the Congressional action last Friday. Since it has no effect until you have used it, our investment sentiment was unchanged by the passage, this probably accounts for the markets continued decline after passage was announced.


Jeffery B. Cross