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I'm reading a review of the Emergency Economic Stabilization Act of 2008. I have a couple of questions. First, they reference "mark-to-market" accounting standards. That means they wanted to do away with "fair value" (i.e., true value) accounting standards? They wanted to inflate the value of mortgages so as not to destroy their balance sheets? Second, I read the following: "FASB was criticized for politicization of accounting standards." What does that mean? The injection of politics into the process? Thanx

She's been popping up in a lot of places lately to chime in on the economy. This time Huffington Post editor-in-chief Arianna Huffington appeared on ABC's April 5 "This Week," where she voiced her disapproval of the March 30 decision by the Financial Accounting Standards Board (FASB) relaxing mark-to-market accounting rules. "This week, we saw so many concessions to the banks," Huffington said. "We saw the suspension of mark-to-market, which is absolutely tragic. Japan, by not having mark-to-market, made it much harder for them to recover." But as Brian Wesbury and Robert Stein of First Trust Portfolios recently wrote for...

When elementary school kids want to escape the confines of their circumstances they pretend to be pirates, princesses, and Jedi knights. Now, with the relaxation of "mark to market" valuation rules announced yesterday by the accounting trade's self-regulatory body, our bankrupt financial institutions can escape their own reality by pretending to be solvent. The unraveling of our fairytale economy over the last few months has not yet convinced us that the time has come to put away childish things. The applause that greeted the news yesterday on Wall Street is a clear sign that we still have some growing up...

WASHINGTON - The Financial Accounting Standards Board on Thursday voted unanimously to approve a measure giving companies flexibility in valuing illiquid mortgage assets that may have long-term value and strong cash flow. The new guidance, which is expected to boost bank operating profits when they report first-quarter results later this month, alters so-called mark-to-market rules, which require banks and other corporations to assign a value to an asset, such as mortgage securities, based on the current market price for the security. Banks have complained they can't sell certain assets because of a lack of a market, however they believe the...

The board that sets U.S. accounting standards on Thursday gave companies more leeway when valuing assets, providing a potential boost to battered banks' balance sheets. The independent Financial Accounting Standards Board voted to adopt new guidelines under the so-called mark-to-market accounting rules, which require companies to value assets at prices reflecting current market conditions. The board was meeting at its headquarters in Norwalk, Conn. The changes will allow the assets to be valued at what they would go for in an "orderly" sale, as opposed to a forced or distressed sale. The new guidelines will apply to the second quarter...

The board that sets U.S. accounting standards is expected to ease rules that force banks to value assets at current prices, allowing them to reduce their losses on paper. In a twist, though, the expanded leeway for financial institutions could undercut the government's new financial rescue program in which it is joining with private investors to buy up about $500 billion in toxic assets from banks, some experts say. The fraud will continue and the markets will be up huge tomorrow....

Letter to FASB: Don’t Change Mark-to-Market! March 29, 2009 – 3:49 pm John Gavin of Disclosure Insight has written a letter to FASB opposing its proposal to refine mark-to-market rules. Like John, I hope FASB sees the light. It has been said that changing MTM rules would be like giving inmates keys to their own prison. Seems to me banks already have keys—to their own cells certainly, and to every other door inside the prison. After all, they have wide latitude to mark most assets to model (level 2) or to myth (level 3). Modifying mark-to-market gives them the key...

RUSH: Here's Brad in Severn, Maryland. Great to have you. Welcome to the program. CALLER: Thank you, Rush. I'm glad you moved me ahead of Carol. RUSH: She asked for it. She asked for it. CALLER: She did indeed. RUSH: There you have it. Okay. CALLER: I was just calling about this issue with the execs at AIG, and I think this is another one of the numerous plays that the Obama administration is making, because it really is absolutely pointless. They could solve a lot of their problems with a few accounting moves. One of them is getting off...

It is sheer madness that Wall Street types insist some changes in the rules of accounting can turn around the global economy. Fixation on such exotic notions as the mark-to-market and up-tick rules only perpetuates the "smoke and mirrors," and completely misses the mark on what's really wrong to begin with. The typical Wall Street operative, like an accountant, has as his life's objective evening out balance sheets to conform them, among other things, to investor expectations. Therefore, if there are rules that make it hard for that to happen, there are howls to change the rules. It has been...

An effective and simple way to reduce the effect on the economy of the collapse of the collateralized debt obligation market would be to suspend mark-to-market accounting in determining the regulatory capital of financial institutions. ... Today the collapse in bank capital has led to a severe contraction of lending, in good part because mark-to-market accounting forced banks to write down and reclassify assets that are required reserves. This destabilized credit and increased the demand for capital by financial institutions in an uncertain environment. A 2008 study by economists at the New York Federal Reserve Bank found what may now...

Many financial gurus believe the requirement for banks to "mark-to-market" their assets, particularly the mortgage backed securities has put our financial system in the mess it is in today. Mark to market is accounting act of recording the price or value of a security, portfolio to reflect its current market value rather than its book value. Lets say you were a bank and bought $10 Billion Dollars worth of mortgage backed securities (MBS). The market crashes, and if you were to sell them today they would be worth $1 Billion and you have a paper loss of $9 Billion Dollars....

"Back during the Internet IPO boom, companies ranging from Netscape to Priceline to Expedia went public with no earnings to speak of whatsoever. Retail giant Amazon.com was jokingly referred to as 'Amazon.org' due to its lack of profits. Despite their heavy losses, investors bought into the aforementioned concepts based on the belief that in the future, their losses would turn into gains. This is notable today given all the talk about mark-to-market (MTM) accounting. To its opponents, MTM lies at the heart of our economic difficulties. MTM naysayers argue that an accounting measure which requires firms to value assets at...

Top US lawmakers said Thursday that Congress would take action if accounting regulators and rulemakers failed to quickly improve the mark-to-market accounting standard that has forced banks to record billions of dollars in asset writedowns. "If the regulators and standard setters do not act now to improve the standards, then the Congress will have no other option than to act itself," Paul Kanjorski, the chairman of the US House capital markets subcommittee, told a hearing he called to examine the accounting standard. The Financial Accounting Standards Board is working on new guidance to help banks determine whether a market is...

We have been accused of beating a dead horse when it comes to our support for either suspension of, or targeted relief from, market-to-market accounting. And we suppose after writing thousands of words, producing videos and giving speeches about the issue, some might be tempted to let it go. But we can't do that, especially when the government continues to spend trillions of dollars and is coming very close to bank nationalization. Article Controls email print reprint newsletter comments (59) share del.icio.us Digg It! yahoo Facebook rss Yahoo! BuzzThis is a real shame. Suspending mark-to-market accounting could fix major problems...

There was a newsflash this morning on Reuters that "Mark to Market is NOT going to be suspended", allegedly sourced from someone at the SEC. MTM was put into place after ENRON due to the amazing abuses on their balance sheet with asset "valuations" in an attempt to prevent re-runs of that debacle. It has been circumvented to a large part by "Level 3" assets, which are in fact marked to model (same thing as non-MTM eh?) So why the furor? Let's say you are a bank and have $1 billion of some bond issue that was stuffed to the...

WASHINGTON (Reuters) – It might be possible to modify mark-to-market accounting rules for U.S. banks facing steep writedowns of troubled assets without abandoning the underlying accounting standard, a senior Senate Democrat said. Sen. Christopher Dodd, the Democratic chairman of the Senate Banking Committee, told reporters on Wednesday evening after a panel hearing that at least one former bank regulator was discussing how to approach the difficult issue without "walking away from" mark-to-market standards. The issue of how to value distressed assets held by U.S. banks has been one of the most difficult challenges in constructing a bank rescue plan, according...

<p>The Securities and Exchange Commission opposes suspension of fair-value, or mark-to-market, accounting rules in a report to Congress delivered Tuesday.</p> <p>Instead, the agency recommends improvements to current practices, including reconsidering accounting methods for impairments and developing more guidance for determining fair value of investments in inactive markets, including where market prices are not readily available.</p>

The last time I looked I couldn't find mark-to-market accounting in the Constitution of United States. It must be the eleventh commandment because it's obviously sacred. I understand the President has the authority under the Emergency Powers Act, or some such legislation, to suspend the Bill of Rights in case of national emergency. Well, we have a national emergency, so mark to market must be more important than the Bill of Rights. If a foreign power destroyed a fraction of the wealth that mark-to-market accounting has the past year, we'd go to war. I'm no accountant, but, as I understand...

AIG's crucial role in the banking collapse Oct 09, 2008 Something very strange is happening in the financial markets. And I can show you what it is and what it means... If September didn't give you enough to worry about, consider what will happen to real estate prices as unemployment grows steadily over the next several months. As bad as things are now, they'll get much worse. They'll get worse for the obvious reason: because more people will default on their mortgages. But they'll also remain depressed for far longer than anyone expects, for a reason most people will never...

Accounting rules rarely garner much public attention, and for good reason: The business of toting up numbers is both devilishly complex and profoundly uninteresting to most Americans. This week, however, accounting was suddenly in the national spotlight as policymakers grappled with the ongoing financial crisis. At issue was a concept known as "mark-to-market." On Tuesday, the Securities and Exchange Commission (SEC), along with the Financial Accounting Standards Board (FASB)--the private regulatory body charged by the SEC with determining such arcane things--issued new guidance on how companies should apply mark-to-market rules to their balance sheets. It sounds like a small thing,...