again waving the magic wand will not help the value of the assets. buyers will not step in and banks will have to sit on those same assets and hoard in order to protect against future losses when the defaults pile up. maybe us canadians way up here can buy up these bankrupt banks in a couple years if m2m changes are made. maybe they can find ken lewis some nice back-office job at td bank...
Nobody wants these instruments because THEY ARE THE DEBT OF TOOTHLESS VERMIN WHO BOUGHT OVERPRICED SHACKS THEY COULD NOT AFFORD AT HALF THE PRICE. A package of 1000 deadbeats is as bad as 1 deadbeat. Don't lose track of the real reason these CDO's suck ass.
You keep saying that nobody will buy these assets. This is 100% wrong. There are willing buyers at the right price. The problem is that if these assets are valued at the price that buyers are willing to pay, the banks will be insolvent on paper. But, the point is that the assets are not illiquid because no one is willing to buy them. They are illiquid because the banks are unwilling to sell them because it will force them to recognize their insolvency. Relaxing mark to market allows them to possibly start trading these assets at lower marks, but STILL continue to put off recognizing their insolvency. This BUYS TIME!!! It solves nothing, as the banks are already insolvent. But the point of EVERY government action has been to buy time. None have been a fix. There is no fix. The question is not will this rule change help. The question is how long does it take before we recognize its failure, and what is the next bullet?
What was the result of the congressional hearings on M2M yesterday (Thursday)? I didn't see any news articles on those hearings.
The only supplement to what santas lil helper, i mean santoslhalper, has said is that so far the banks are asking for a relaxation in m2m on assets for which there is no market (NOT for any assets which are traded). therefor, relaxing the m2m rules on untradeable assets will not result in a motivation to increase trading of toxic assets, rather it would create a motivation not to trade an asset and then value the asset however the banks found most fit. of course, this is all ludacris and the president if he's worth two fucks will do everything in his power to stop the relaxation of m2m rules.
Watch the video in the link...what a farce. http://www.infowars.com/regulator-b...aded-with-feds-to-let-them-fudge-their-books/ Before financial institutions have collapsed over the past several months, they have come to the Financial Accounting Standards Board, pleading for a change in mark-to-market accounting rules so that they can continue to appear to be solvent on their balance sheets. Robert Herz, head of the FASB, told a panel of lawmakers Thursday that the loudest critics of fair market accounting practices have been the very same banks that have gone belly up when regulators would not let them adjust their accounting. "There seems to be a clamoring for changing mark-to-market rules that seems to come largely from institutions that may be insolvent," Rep. Alan Grayson (D-Fla.) said to Herz at a meeting of the Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises. * A d v e r t i s e m e n t * efoods Grayson said that, from Herzâ testimony, it seemed that "there may be institutions that are insolvent and they havenât been forced to write down their books to the point [of insolvency] yet, and those are maybe the same institutions that are asking us to modify the mark-to-market rules so that they wonât have to admit that theyâre bankrupt. Is that correct?" Herz said that it was. "I share your point of view and I will tell you that I get calls and visits from some of those institutions that are now in government hands, about two weeks before they get taken over, trying to get the accounting changed," he said. "Clearly some of the most vocal opponents of fair value and mark-to-market have been some of those institutions that ultimately failed and have had to have billions of taxpayer dollars put into them." Mark-to-market accounting requires banks to value an asset at its most current market value. In a frozen market, where assets canât be sold for anything more than a fire-sale price, that value is extremely low, forcing banks to write-down a loss on their balance sheets. With a loss on the books, the bank can lend less money and is required to raise capital to meet regulatory lending standards. With enough losses on the books, the bank is no longer solvent. The exchange comes at about the 4:40 mark in this video: Grayson, reached in Florida, said the he was grateful for Herzâ candidness and insisted that changing mark-to-market accounting rules was no way to get out of the current economic mess. "Thatâs representative of exactly the kind of thing thatâs put us in this position in general," he said. "We have people who break every rule in the book and then they think that the answer to their problems is to break more rules. Itâs given us some real insight into the human nature and the pathology of the people who have created these problems for America." Just as the the institutions Herz referred to were requesting accounting changes, large banks are again calling for modifications. "Why are we having this conversation now at all?" Grayson asked. "I think the real reason this has come up now is because a lot of the institutions are genuinely insolvent and donât want to admit it. The people who are in charge of those institutions donât want to have to give up their multimillion-dollar jobs and turn companies over to receivers who will see all the mistakes they have made." For Grayson, the rules exist for a reason. "The reason why we have these rules in the first place is to be able to distinguish the successful companies from companies that are broke. Thatâs why we have these rules. Thatâs why we have accounting," he said. "Thereâs an underlying truth to accounting, and itâs very important to preserve that truth."
Hmmmm - - - have you every listened to the prez ? He knows absolutely nothing about even the basics of economics or business - - much less the ins-and-outs of M2M.
Well, to me it looks like "someone" is putting pressure on the FASB to cave in on this. What are the chances of them re-affiring m2m as it is currently understood?