Saturday, March 14, 2009

Points of View - Mark-to-Market

"We think it is absolutely true that the assets (meaning the impaired assets on bank balance sheets) are worth more than the current market conditions assigned to them and so that, yes, over time, there will be significant profits from these," FDIC Chairman Shelia Barr said in an interview with American Public Media.

"Ms. Bair's assessment would appear to substantiate the position that Vince (Farrell) and I share with Steve Forbes and lots of others that many, if not most bank assets have been marked down way, way too low. That's the fault of mark to market," Cashin wrote in his morning note to clients.

Lots of mark-to-market action this week, so the following two editorials - one from Steve Forbes in The Wall Street Journal and one from Floyd Norris in The New York Times.

In the end, it looks like change is coming for mark-to-market - "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," said Representative Paul E. Kanjorski (D - PA).

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