April fools? New accounting rule to end the financial crisis

Many people are wondering when this recession (or depression) will end. Well, the waiting is over. Tomorrow a group of accountants will vote on a new accounting rule that will end the financial crisis. This rule, called FAS 157-e, permits banks to make up the value of assets they carry on their books but which nobody wants to buy. By letting banks put whatever value they choose on these assets, they will no longer need to tell investors just how badly those assets have deteriorated.

This is obviously fantastic news for the global economy. We can now get back the $12.8 trillion we've spent bailing out the banks and insurance companies. That's because the toxic waste that has so far caused them to take $3 trillion in write-offs will no longer be toxic. In fact, the banks can mark those assets just as high as they want -- even taking a profit by valuing them at, say, $1.20 instead of the 60 cents at which they're currently priced. This increase in value will instantaneously give the banks as much capital they want.

And now all those 5.6 million unemployed people have a sure-fire way of becoming billionaires -- so their financial worries are over. All they have to do is start a company; put together some paperwork for a complex asset-backed security, which they can find on the SEC's web site (here's an example); value the securities at $1 billion; and sell stock to the public.

Voila! You've just created a billion dollar company and you never need to work again.

There's just one thing -- today is April 1. And if FAS 157-e is not an April Fool's joke, then our financial system is doomed.

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College. His eighth book is You Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing.