Did We the People just get robbed?
Not metaphorically, but literally. It was the mark-to-market rule that caused the big banks to "write-down" all of their "toxic" assets which, in turn, caused the US government to bail them out. Now that the rule has been changed back, can they please return all of the money? Now that they don't have to mark their assets to current market value, doesn't that mean that the assets are no longer toxic? After all, if you listen to the bankers, over 90% of the current mortgages are fine and will be paid off in full.
Whenever a simple accounting rule change spurs a 300 point rally in the market, we can see how upside-down the "fundamentals" of our economy are. All this is going to do is reinflate the bubble and kick the disaster a bit down the road. And remember, it was Enron who pioneered this mark-to-market fraud. And we all know how well they did...
"Bank stocks were boosted on Thursday by an accounting rule change that is expected to allow managers to repair balance sheets by recalculating the value of some of their most troubled assets.
The Financial Accounting Standards Board voted on Thursday morning to allow banks more freedom to use their own valuation models, rather than current market prices, for assets where markets have become illiquid. A second rule change means banks will only have to recognise a part of any impairment in their profits.
Citigroup jumped 9 per cent in early trading, Wells Fargo was up almost 11 per cent and Bank of America added almost 10 per cent
Some analysts have calculated that the change could allow a profits boost of up to 20 per cent in the quarterly earnings of some banks.
The changes come after pressure from Congress and intense lobbying by some corners of the financial sector, including a number of large lenders. They have argued that so-called “fair value” accounting, which demands market prices where possible, has magnified the problems caused by market turmoil because the prices they have been forced to reference are from distressed sales and do not contitute a real objective market. "
(click link to complete the article)
Not metaphorically, but literally. It was the mark-to-market rule that caused the big banks to "write-down" all of their "toxic" assets which, in turn, caused the US government to bail them out. Now that the rule has been changed back, can they please return all of the money? Now that they don't have to mark their assets to current market value, doesn't that mean that the assets are no longer toxic? After all, if you listen to the bankers, over 90% of the current mortgages are fine and will be paid off in full.
Whenever a simple accounting rule change spurs a 300 point rally in the market, we can see how upside-down the "fundamentals" of our economy are. All this is going to do is reinflate the bubble and kick the disaster a bit down the road. And remember, it was Enron who pioneered this mark-to-market fraud. And we all know how well they did...
"Bank stocks were boosted on Thursday by an accounting rule change that is expected to allow managers to repair balance sheets by recalculating the value of some of their most troubled assets.
The Financial Accounting Standards Board voted on Thursday morning to allow banks more freedom to use their own valuation models, rather than current market prices, for assets where markets have become illiquid. A second rule change means banks will only have to recognise a part of any impairment in their profits.
Citigroup jumped 9 per cent in early trading, Wells Fargo was up almost 11 per cent and Bank of America added almost 10 per cent
Some analysts have calculated that the change could allow a profits boost of up to 20 per cent in the quarterly earnings of some banks.
The changes come after pressure from Congress and intense lobbying by some corners of the financial sector, including a number of large lenders. They have argued that so-called “fair value” accounting, which demands market prices where possible, has magnified the problems caused by market turmoil because the prices they have been forced to reference are from distressed sales and do not contitute a real objective market. "
(click link to complete the article)
-
- groups:
- News and Politics, WTF
-
-
-
-
- tbowman131
- added this
-
This is the govs. idea of "stricter" regulation??!! Holy shit,are we in trouble! "The truth will be revealed by the result."
-
-
-
-
- pissedoffinarkansas
- 8 months ago
-
