Rumpole

Government's New Credit Approach: Does the End Justify the Means?

Since the secondary market has dried up and credit card companies have to keep the loans on their books, could someone please tell me why they can't secure them against a card holder's real estate or personal property using personal property security legislation? Granted, it's not a perfect solution, but the companies could at least do that much. but your larger point is correct, too much credit was issued on very loose terms and it's been abused by many of the people to whom it's been issued. Pain will ensue, it's inevitable.

EU Eases Mark-to-Market Rules; What's the U.S. Waiting For?

"...M-T-M, recall, requires companies to mark their financial assets to market each quarter, and run the price changes through their
P&L. For assets that trade on liquid markets, that makes sense. But if the asset is illiquid, or trades in a market that occasionally (like now) freezes up, “market” prices can often be totally unrelated to the asset’s actual intrinsic value. In cases like that, all MTM accounting does is blow up a company’s balance sheet for no reason."
For no reason?? Perhaps the part of the cycle we're now in is saying something about how you're calculating intrinsic value? You're assuming that your version of "intrinsic value" is somehow stable and enduring. But I think that assumption has got to be questioned now that the credit/debt bubble has been popped and the excess cash being pumped into the system is being sucked down the drain of debt and "intrinsic value" is being sucked down that same drain.

In effect, what you're saying is that when times get tough, let's re-write the rules so that we can fudge the books. Who exactly does that help??!!

Bailout Bill Passes; What Happens Now?

In my view, the only effective pressure the American populace can assert in order to regain control over its government is not to pay taxes. yes, this will present some risks. yes, those who advocate for a tax revolt will be threatened, will be labelled as traitors, etc. But it'll be those in authority doing the threatening and labelling. But the time to start this campaign is now, during your presidential and congressional elections. it would of course have to persist beyond this, right up to fiscal year end.
The SEC's alteration of mark to market rules is laughable. Just one more piece of evidence that the game is soooo shamelesslly rigged. Isn't the principle of a "free" market that the market sets the value of a company at any given point in time? Markets aren't entirely rational. But concepts like book value or intrinsic value are based on some idea of rationality. So these concepts go out the window in times of crisis. But that doesn't make the values ascribed by the market in crisis times invalid. But that's exactly what the SEC's intervention and those who support it are saying. But not me.