Subject: File No. 4-573
From: John L. Petersen, CPA JD
Affiliation: Partner, Fefer Petersen Cie.

October 17, 2008

In normally functioning markets, the mark-to-market approach of FAS 157 is both reasonable and informative to users of financial statements because it values financial instruments at market, a price negotiated between a willing buyer and a willing seller, neither of whom is under compulsion to buy or sell.

There will always be forced sellers, but in a normally functioning market the number of forced sales will not typically be significant enough to materially influence the market price. In times of economic upheaval, increased selling pressure comes largely from holders who are in fact under compulsion to sell and that's the precise point where the theory of FAS 157 goes 180 degrees out of sync with market reality. As soon as the number of forced sellers arises beyond a 'normal level' the market price tends to reflect the lowest price acceptable to the weakest holder.

After the '87 crash a reporter asked Sam Walton what it felt like to lose a billion dollars in a day. Mr. Walton's response was "I still own it all so I haven't lost a penny." Rules that force prudent holders who have no plans to sell to mark their financial instruments down to the lowest price acceptable to a forced seller are contrary to the going concern principle and do a tremendous disservice to the users of financial statements.