drieuxster (drieuxster) wrote,

Mark To Model and Mark To Phantasy Island, new accounting standards?

“Suspending the mark-to-market prices is the most irresponsible thing to do,” Diane Garnick, a strategist at the major investment firm Invesco Ltd. in New York, told Bloomberg News. “Accounting does not make corporate earnings or balance sheets more volatile. Accounting just increases the transparency of volatility in earnings.”

These “mark-to-market” rules have evolved since the Savings and Loan (S&L) crisis of the 1980’s, as well as questions arising in the last two years on how much mortgage-backed securities are actually worth, to press companies and financial institutions to disclose how they set the value of what they own and avoid overly creative prices.

Several House Republicans claimed that their reasoning for rejecting the original “bailout” bill in the House was that it did not call for ending “mark-to-market” accounting and that they are closer to approving the new bill because of the concession. Lobby groups such as the American Bankers Association and the mortgage lenders’ Consumer Mortgage Corporation, as well as companies such as American International Group (AIG), have also pressed Congress and the SEC for a full moratorium.

House Republican Leader Rep. John Boehner, (R-Kansas), said in a statement, “Onerous mark-to-market rules for certain financial assets that have no market value have worsened the credit crisis, and changing them has been a priority for House Republicans.”

[ cf Senate 'Bailout' Opens Door to Ending 'Fair Value' Accounting (emphasis mine)]
Ok, so I have to be honest, I learned about Mark To Model, as opposed to Mark to Market from Enron....

So maybe the Mark To Phantasy Island will be better, and Nah-gnu Nah-gnu will bring us all pretty umbrella covered drinks in lieu of accounting standards....

Ah yes, a whole new meaning for faith based economics....

It's the Majikal Stuff the troops are fighting for...
Tags: economics, religion, war

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