Waited couple of hours finally posting this. March 11-12 pivotol day.
REUTERS
US Congress to examine mark-to-market accounting-source
Started by
iloli way
, Mar 04 2009 06:05 PM
22 replies to this topic
#1
iloli way
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Posted 04 March 2009 - 06:05 PM
PRICE IS KING; LINE RULES! - Laws Of Line (LOL) Trading Systems
Swing Those Lines: I can calculate the motion of heavenly bodies, but not the madness of people! -- Issac Newton
Swing Those Lines: I can calculate the motion of heavenly bodies, but not the madness of people! -- Issac Newton
#2
iloli way
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Posted 04 March 2009 - 06:43 PM
PRICE IS KING; LINE RULES! - Laws Of Line (LOL) Trading Systems
Swing Those Lines: I can calculate the motion of heavenly bodies, but not the madness of people! -- Issac Newton
Swing Those Lines: I can calculate the motion of heavenly bodies, but not the madness of people! -- Issac Newton
#3
iloli way
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Posted 04 March 2009 - 06:49 PM
PRICE IS KING; LINE RULES! - Laws Of Line (LOL) Trading Systems
Swing Those Lines: I can calculate the motion of heavenly bodies, but not the madness of people! -- Issac Newton
Swing Those Lines: I can calculate the motion of heavenly bodies, but not the madness of people! -- Issac Newton
#4
ogm
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Posted 04 March 2009 - 07:28 PM
You think that will be bullish ? Think again.
You think its hard to value those assets now ? Try putting a value on them if mark to market is suspended.
Confusion and uncertainty about whats on the books of those financials will increase exponentialy.
#5
arbman
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Posted 04 March 2009 - 08:00 PM
Other than (1) leveraging with another person's money where one should be accountable and (2) the non-performing assets which are effectively lost or have zero value, the mark to market is just accounting detail that will feed into the anxiety, especially in such an environment. I think if all of your assets are not leveraged and performing fine, there is no need to force you to sell them just because the perceived value has gone down since the purchase. This is part of investing, there will be draw downs. I think the first two conditions above are completely violated though for the problem banks and their assets...
#6
U.F.O.
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Posted 04 March 2009 - 08:41 PM
ogm, I totally disagree with your post above. You think bank stocks never traded up because of uncertainty before mark-to-market accounting? How long do you think we've had MTM accounting? How about FAS 157 for 2 years. Suspension of MTM rules will cause a huge response in financial equity prices. They should get a bounce just on this news of the congressional review.
U.F.O.
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"Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote!"
~Benjamin Franklin~
~Benjamin Franklin~
#7
bnick
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Posted 04 March 2009 - 08:55 PM
Think OGM is correct here. The problem is that the banks used the mark to market rule in their favor on the way up, which exaggerated the values of the companies substantially at the top. That capital was wasted on huge golden parachutes, ridiculous stock buybacks and leveraged buyout tomfoolery. The banks will still be undercapitalized the day after mark to market is suspended, except there will not be a stick to force them to tell the truth about the types of assets they have on their balance sheets. The mark to market suspension is nothing but lipstick...
#8
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Posted 04 March 2009 - 09:03 PM
What does lipstick do? Turns a pig into a debutante.
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"Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote!"
~Benjamin Franklin~
~Benjamin Franklin~
#9
dcengr
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Posted 04 March 2009 - 10:04 PM
Days of fantasy accounting is over.
But it never stops the old timers of day dreaming about the glory days.
Qui custodiet ipsos custodes?
#10
U.F.O.
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Posted 04 March 2009 - 10:14 PM
When they kill MTM I'll make sure you see it dcengr. Of course....assuming my "old timey" fingers can still eke out a post on this new fangled keyboard. 
U.F.O.
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"Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote!"
~Benjamin Franklin~
~Benjamin Franklin~
