User 108022

Backlash Against Mark-to-Market Accounting

If MTMarket doesn't work so well why were affected institutions using MTModel pricing that was so wildly off realistic values. In turn this feeds the creation of more of these monsters with unwise financial characteristics. A MTModel that does not take the world outside the security itself is inherently unsafe. I understand liquidity, size, etc. affects price but MTModel makes implicit assumptions about the market that may or may not be true. The only truth you will find is when you go to buy or sell is price. And MTModel was wrong, bad pricing.