Mark-to-market accounting

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Dec 3, 2008 4:27 pm

It's amazing this hasn't been talked about more: 

 
http://www.ftportfolios.com/Commentary/EconomicResearch/2008/12/3/mark-to-marketmayhem_ii
Dec 3, 2008 4:46 pm

It was talked about a couple of weeks ago in the Wall Street Journel.

 
Another option they mentioned was to lower the reserve requirements for bank. 
 
It is a good article. Thanks for sharing.  
Dec 3, 2008 4:57 pm

As a follow up, good short video from the author of the above article:

 
http://www.ftportfolios.com/Commentary/EconomicResearch/2008/12/3/perspectiveon_the_recession
Dec 3, 2008 5:30 pm
Greenbacks:

It was talked about a couple of weeks ago in the Wall Street Journel.

 
Another option they mentioned was to lower the reserve requirements for bank. 
 
It is a good article. Thanks for sharing.  



Primo - They've been talking about it for months.  That's why you should tell all your clients to use equity indexed annuities.

Dec 3, 2008 10:27 pm

Yeah lets blame the accountants -- their the cause of all this. If only they followed Chinese GAAP, where the results is what you want it to be, this whole mess would be solved.

 
As I recall from college, isn't an asset (in this case a big dumb bank) valued at something like its' future cash flow (PVed of course)? Changing accountants counting rules is basically the same as a currency reform.
Dec 4, 2008 11:54 am
MinimumVariance:

Yeah lets blame the accountants -- their the cause of all this. If only they followed Chinese GAAP, where the results is what you want it to be, this whole mess would be solved.

 
As I recall from college, isn't an asset (in this case a big dumb bank) valued at something like its' future cash flow (PVed of course)? Changing accountants counting rules is basically the same as a currency reform.
 
Nobody is saying it's the accountants' fault.  But, it appears that temporarily suspending mark-to-market accounting for some assets could relieve a little stress on the balance sheet.
 
I would think at least trying this idea, as well as bringing the uptick rule back, would be better than throwing money around and seeing where it sticks.