MSNBC Legal Analyst Says It's Dangerous to Peddle This Theory About the Trump...
Dem Rep Cites Phantom Poll Showing Biden Winning Re-election and Dems Retaking the...
What This Dem Communications Director Tweeted Explains Why Trump Can Stick Around
RFK Jr. Blasts His Exclusion From Debate As a 'Clear Violation of Federal...
Missouri AG Announces He's Suing New York Over 'Unconstitutional Lawfare' Against Trump
Republican Senators Grill Biden's Judicial Nominee
Here's What Stands Out About the Reactions From NJ Politicians to Norcross Indictment
Trump Outraises Biden for May
Thousands of Illegal Aliens From This ISIS ‘Hotbed’ Have Entered the U.S. Illegally
Biden Takes a National Polling Lead for the First Time in 2024...or Does...
Two Illegal Aliens Arrested in Connection With Murder of 12-Year-Old Girl in Texas
Trump Reaches Out to Mother of Rachel Morin. Guess Who She Hasn't Heard...
We Cannot Afford to Further Delay the Next Generation Air Dominance Fighter
Help Me, Bob Iger. You're My Only Hope.
The Narcissistic Left
Tipsheet

SEC's Recent Clarification May Help

If you've been reading this blog recently, you know I have been advocating we suspend mark-to-market accounting rules.  This topic is getting some good attention this morning in today's WaPost
Advertisement
:
"Some economists are attributing much of the current financial crisis to something as mundane-seeming as accounting.

... An odd-sounding accounting phrase at the heart of this is something called "mark-to-market" accounting. Many think that if this requirement were ended, the crises could be eased.

... Simply put, mark-to-market accounting requires companies to set the value for the assets they own at the price they could fetch on the open market right now. The prices must be "marked to market;" hence the phrase.

What does that have to do with the current crisis? The root problem now is that financial institutions have been caught holding value-less, or "toxic," assets on their books, such as the mortgage-backed securities based on sub-prime mortgages that have defaulted.

The government believes that those assets will be worth something soon -- that's why they want to buy them in the $700 billion Wall Street rescue plan. But under mark-to-market rules currently required, they are worth almost nothing, threatening those who hold them with insolvency."

Join the conversation as a VIP Member

Recommended

Trending on Townhall Videos

Advertisement
Advertisement
Advertisement