I have been engrossed watching the political machinations going on as one of the largest spending projects get’s the bum rush through Washington in the form of a financial bailout for Wall Street.
Fortunes will be made on the back of the honest taxpayers in the country.
But there are some smart people recommending the Mark to Market plan that would provide cover for the financial market and provide a logical solution without bankrupting the country.
Of course there is no pork in it so Washington has very little interest in it.
Here is another report on Mark to Market by First Trust Partners. It is in PDF format but a very good read.
And, third, it seems clear that much of the current crisis has been exacerbated by mark-to-market accounting, which has created massive, and unnecessary, losses for financial firms. These losses, caused because the current price of many illiquid securities are well below the true hold-to-maturity value, could have been avoided. The current crisis is actually smaller than the 1980s and 1990s bank and savings and loan crisis, but is being made dramatically worse by the current accounting rules.
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