Originally Posted by
foodgoeshere
Originally Posted by
reigndrop
Originally Posted by wawaweewa
Yayo,
What do you think about this March 12th mark to market hearing. The timing is pretty nutty considering that we're on the verge of a massive drop again.
I doubt they suspend M2M before a crash but if they do, do you think it'll be bullish for the market considering it won't change anything fundamentally in relation to actual debt levels and insolvency. Asset levels aren't coming anywhere near peak levels for decades (in real terms). Or do you believe that the event that catalyzes a crash will overshadow.
I might be nuts but I think they know a crash is coming and they'll suspend M2M after the crash to put in a somewhat sustainable bottom.
It's interesting that after all these months they have set a hearing now for M2M which is telling.
Funny how I was emailing a colleague about this this morning, and I have my doubts about them suspending it also. First off, if they do indeed suspend it next Friday, what will they revert too then to value assets? This administration has proven that it has no plan yet in regards to the banks, so for it to have some sort of plan in regards to M2M would be eyepopping. That's the biggest pet peave right now, they might suspend it, but unless they have plan to revert to some other method of accounting in the near term, the market will not be bullish.
It's hard to believe that they'll have anything planned. Wasn't the lack of mark to market the reason financials got in trouble in the first place? If anything I think that a suspension will only cause a minor bear rally then crash. A suspension would be temporary good news for the market, but I think capitulation will come following more bad news.
Quoted from
house.gov:
Washington, DC - Congressman Paul E. Kanjorski (D-PA), Chairman of the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises, today announced that the Subcommittee will hold a hearing to examine the mark-to-market accounting rules that many contend have exacerbated the current troubles in the financial industry and in the broader economy. The standard requires companies to value assets they hold at current market values. For assets that are frozen and have a diminished current market value but may recover value in the future, the standard has proven problematic. Companies are then forced to write-down billions in assets, which can lead to further write-downs elsewhere.
"Illiquid markets have resulted in great difficulty in valuing sizable assets. Some have therefore complained about fair value accounting and sought to eliminate it. While companies need stability, investors still need accurate information. We therefore cannot allow for fantasy accounting that wishes away bad assets by merely concealing them," said Chairman Kanjorski. "As a result, we will seek at this hearing to engage in a constructive, thoughtful conversation with a diverse range of viewpoints aimed at identifying fair-minded, incremental, and achievable fixes to this problem. In short, I want to find a way - within the existing independent standard-setting structure - to still provide investors with the information needed to make effective decisions without continuing to impose undue burdens on financial institutions. Each of our anticipated witnesses will have the opportunity to contribute as we all pursue consensus solutions together to this thorny, contentious issue."
