lavalyn

The Real Risks of Deleveraging

"This paperclip is worth $1,000,000."

With that, all your venting about FAS 157 and 159 go poof in a little cloud of smoke. The alternative to an environment where we must value assets on balance sheets according to fair market value is one where we need not value assets to fair market value. And that is an environment where we can mark to whatever we want. Historical price, discounted future cash flows, a number that I thought up a few seconds ago, you name it.

If anything, FAS 159 showed the world how financially unhealthy Wall Street had become.