Xyrus

Why Stock Charts Are Misleading

Why not throw in inflation adjustments as well. Then we can seee how much they're really worth.

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Easing of Mark-to-Market Rules: Good for Banks, Bad for Investors

Really? Lazy investors?

Does anyone have a problem with me putting my net worth at $1 billion even though my assets are worth $1 million thanks to the market?

Can I walk into a bank and ask for a $1 million loan using my house as collateral because I think it's worth at least $2 million even though the market says otherwise?

No. And the reason why is because an asset is worth only as much as someone is willing to pay for it. Period. End of story.

I can't say my stock holdings are $10K if the market is only willing to pay $5K for them. I may think their good investments and that they're worth $10K, but the market says otherwise.

It doesn't matter if a bank thinks its collection of MBSs is worth $X. If the market thinks it's only worth $Y, then that is what they're worth.

To put this another why, how comfortable would you feel about putting your money in a bank that uses an asset that the bank itself valuates. What happens if a financial crisis begins and that asset value plummets? What happens if the bank needs to liquidate those assets? The value of those assets are what market will pay for them, and if that's ten cents on the dollar you're screwed.

Allowing banks to put on their own valuations onto their assets is giving the wolf keys to the hen house.

I wonder how long it will be before we get another MCI or Enron.

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Options Trader: Thursday Outlook

Just an FYI, hurricane intensity prediction is not very good in any of the models, especially anything longer than a couple of days. Track projection and other measures are a bit better, but again anything beyond a few days is unreliable.

Once the storm is a day or two from landfall, THEN you can begin to rely on forecasts a bit more.

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