At this Wednesday's meeting, the Financial Accounting Standards Board will discuss its phantom Staff Position - missing from the FIN 46-related FSPs finalized in late July.

The missing FSP - call it No. 6, though they weren't numbered - addresses fees paid to decision makers and guarantee providers in a variable interest entity, for the purpose of calculating the expected loss and expected residual returns. This is relevant to structures that have non-substantial equity holding service providers, such as certain CDOs.

The board will cover other related topics, such as whether it should expand the FIN 46 list of events that subject an enterprise to the primary beneficiary analysis.

The stack of letters grow

At this point, it's clear as day how strongly the U.S. securitization industry opposes FASB's proposed amendments to FAS 140.

A lone letter of praise arrived June 30 from Sen. Carl Levin (D, Mich.). The subsequent 50 submissions posted on the FASB Web site over the past week urge caution at the very least, warn of "unintended consequences," and beg the Board to seriously reconsider the value and costs involved in further changing the way structures are documented and accounted for by the several parties to common securitizations. Of course, the industry argues that vanilla securitizations do not even remotely resemble the Enron-related shady dealings the Board is intent on preventing (other than sharing with Enron a few catch phrases).

Government sponsored enterprise Fannie Mae states it plainly enough.

"If consolidation were required on March 31, 2003 for Fannie Mae-guaranteed MBS held by other investors, Fannie Mae would have recorded an asset and liability gross up of approximately $1.108 trillion," writes Jonathan Boyles,

vice president for Financial Standards and Corporate Tax in the Controller Department at Fannie. "Our total assets would increase from $913 billion to approximately $2.021 trillion even though we do not own and have no control over the assets underlying the MBS. This balance sheet gross up would substantially increase Fannie Mae's minimum capital requirements."

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