Mark to Market Accounting
I must be dense, because I cannot figure out how suspending Mark to Market helps. Are people that stupid that they do not know how to get prices. Can some one tell me how this changes anything. I am being totally honest. I really do not understand.
What would change things (in my mind) is if the feds stopped taking over banks and just left them in runoff and guaranteed a one day turnover on deposits if any bank defaults. That would mean no one would have to sell assets.
Don't change the accounting, change the covenants.
I would really like to hear the other side, because 5 people on CNBC just told me that Mark to Market is what needs to be changed.
Also, another thing that I do not understand is this statement: "we need to get the toxic assets off balance sheet". Why? How does that help?
What would change things (in my mind) is if the feds stopped taking over banks and just left them in runoff and guaranteed a one day turnover on deposits if any bank defaults. That would mean no one would have to sell assets.
Don't change the accounting, change the covenants.
I would really like to hear the other side, because 5 people on CNBC just told me that Mark to Market is what needs to be changed.
Also, another thing that I do not understand is this statement: "we need to get the toxic assets off balance sheet". Why? How does that help?
posted by MattKelly54 at
6:18 PM
4 Comments:
I definitely do not think mark to market should be suspended. One argument that does make some sense to me is that banks have to have the confidence of depositors and that seeing assets fall is not instilling confidence. This seems to me more an argument against allowing banks to do investment banking, securitizations or holding volalitile assets.
I think the question comes down to:
1) Do you want to sell assets into the worst market in history?
or
2) Do you want Zombie banks?
In my mind the accounting has very little to do with either of these.
There needs to be real rules on bank assets, beyond all the Basel 2 bullshit.
Maybe I am confusing regulatory accounting with Gaap accounting. I agree with the regulatory accounting changes. But I still think the accounting is not the problem, it is the enforcement of terms by the government. I guess it is two paths to get to the same ending.
Does anyone believe that Bank of America still thinks buying Merril or CFC was a good maneuver? How is Ken Lewis still holding his job?
Isn't it at least kind of funny that Bear Stearns stock holders made more than Citi, more than Bank of America and just about every bank out there.
Kind of amusing. Jimmy Cayne smoking pot made people a lot of money.
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BIDEN: I would recommend that woman call my office directly, and I will be able to guide her as to what pieces of this package would be directly helpful to her. For example, it may very well be that she's in a circumstance where she is not able, her customers aren't able to get to her, there's no transit capability, the bridge going across the creek to get to her business needs repair, may very well be that she's in a position where she is unable to access the -- her energy costs are so high by providing smart meters, by being able to bring down the cost of her workforce.
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