Everyone from George Soros (writing for The Wall Street Journal), to SEC Chairman Christopher Cox, to New York Insurance Superintendent Eric Dinallo is clamoring for the regulation of credit default swaps…that financial disaster brought to life by Bill Clinton in December of 2000, that was at the heart of the AIG meltdown.

But the unregulated feeding frenzy spurred by Bill Clinton’s deregulation weren’t the only factors behind the financial mess we find ourselves in today; lending institutions were forced to make bad loans by politicians looking to garner votes, and changes in accounting standards had unintended consequences.

FAS 157 (mark-to-market accounting rule) has just been overturned, and the DOW knows it.

The Dow Jones industrial average rallied Thursday, topping 8,000, and the broader market followed suit, after an accounting change to give banks more wiggle room in valuing assets and news that the G20 will boost financial support to create jobs and restore economic growth.

Wall Street was higher from the open, as investors brushed off the latest weak signal from the job market and extended gains into a third straight session. The Labor Department recorded 669,000 initial jobless claims in its most recent weekly count, up from 657,000 a week earlier. Meanwhile, continuing claims climbed to a new record high over 5.7 million, ahead of the government’s March jobs report, due Friday.

Despite the gloomy unemployment data, financial stocks paced a sharp rise and built on gains after the Financial Accounting Standards Board announced that it would relax its mark-to-market rule. The policy, which requires companies to value assets at prices that reflect current market conditions, has come under intense scrutiny after banks took billions of dollars in write-downs when the market for mortgage-backed securities dried up following the subprime meltdown.

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