Jeff Miller

The FAS 157 Accounting Standard and Marking to Market

O' Cynical one --It is not "my way of thinking" and it is not like the homeowner. I agree with what homeowners are thinking. Many investors think this is the same, apparently including you. The remaining big accounting firms, especially in the post-Arthur period, apply some pretty tough rules, as they did with AIG. The point is to give investors an accurate look at corporate earnings. The company can't just say anything it wants (like your homeowner example).

The question is whether using prices from illiquid securities really informs investors. I try to help people by showing some good thinking from various sources, picking topics where many are wrong. I hope that some will benefit. Those that start with an idea that corporations and accountants are liars are of two types: those who consider new evidence with an open mind (my intended audience) and those whose minds are made up. The latter group probably should not invest in stocks.

I expect that you are in the former group, or you would not bother reading and commenting. I appreciate this, since it helps me in future articles.

Thanks -- Jeff