Senior level CPAs have turned much more pessimistic about the economy. And somewhat surprisingly, they are partly concerned about deflation.

Just 21 percent of CPAs serving as C-suite executives said they are optimistic about the US economy, way down from 40 percent who were optimistic in May and the lowest level since April 2009, according to the American Institute of Certified Public Accountants and the University of North Carolina's Kenan-Flagler Business School's latest Quarterly Economic Outlook Survey. What's more, pessimists outnumbered optimists by a two-to-one margin.

The report in the New York Times today http://www.nytimes.com/2010/08/12/business/12debt.html?_r=1&ref=business about the huge amount of home equity loans that have been written off or barely paid back is very disturbing, and a stark reminder about a major reason the entire globe continues to feel the effects of the mortgage crisis.

It is also a reminder that this crisis was not just caused by sub-prime mortgages, but also by greed among the many people who took out the mortgages and loans to buy boats, luxury cars, extensions on their homes and expensive colleges.

Without net neutrality there would be no Facebook, no YouTube, no internet 
giants that started in the dorm room of a couple of college kids.

Okay I take that back. Some of the ingenious and daring internet ideas that have changed the world as we know it would still exist, and possibly in the form that we now know. But quite possibly not. 

As part of the financial overhaul, federal banking agencies have jumpstarted the process of finding alternatives to using credit ratings for calculating banks' capital levels. But alternatives are few and far between and some could be expensive too.

The various bank agencies - the Federal Reserve, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision - are seeking to gather information and comments on alternatives and on a set of criteria considered important to evaluate creditworthiness standards such as risk sensitivity, transparency, consistency and simplicity.

Bankers in Europe are not confident in their risk management practices, according to a recent study by Oracle.

The study of 450 financial services and IT professionals at European banks found that almost half of respondents reported that they lacked confidence in the accuracy of counterparty and risk data that they used for risk analysis-a disturbing figure given the ongoing financial concerns in the region.

The six largest banks in the UK will set up a task force to evaluate the business lending landscape in the UK and look at ways to increase credit to UK companies. However, at first glace it appears this is just the next step in the political dance that the UK coalition government and the banking community have been sashaying to for quite some time.

First, the government says small businesses--the fuel for the furnace of recovery--need access to more credit in order to grow; then the banks say we have no money to lend because you are making us hold more in reserve; then--surprise, surprise--the banks all return to profit; then the government says okay now lend to small business; then the banks say they don’t want our money; then the government says okay, really guys, you must lend more to small business; then the banks say okay we will set up a task force to look at it….and the dance goes on.

If the Federal Reserve Bank of New York requires mortgage originators to repurchase mortgages acquired through the bailouts of companies like American International Group and Bear Stearns, as it said it might, banks could face weaker earnings and reduced lending capacity as a result.

Second-quarter earnings showed that recovery is on its way for banks, with, for example, Morgan Stanley beating analysts' forecasts. But there's still some pressure on the industry.

Russian president Vladimir Putin’s announcement on Thursday of a temporary ban on grain exports led to the latest in a series of runs on grain prices on global commodities exchanges over the past few weeks.

Wheat prices on the CME in Chicago have risen almost 80 percent over the past month. For companies in the food production industry, the question is what impact it will have on hedging programs.

Credit quality, on average, may be improving. And if the economy continues to grow, the worst of the credit crisis may finally be behind us.

However, a new Standard & Poor's report warns that the credit improvement is mixed when you drill down to individual industries.

With News Corp announcing this week a new compensation framework aimed at better-aligning executive incentives with shareholder interest, it once again brings into sharp focus the changing nature of executive compensation in the US—changes being pushed both internally at the board level and from policy-makers.

News Corp, owner of the Wall Street Journal and Dow Jones & Co, has filed with the SEC plans to offer performance-based bonuses in the coming year to executives—including CEO Rupert Murdock, head of European and Asian operations James Murdoch, COO Chase Carey, and CFO David DeVoe.