glassbox

Amity Shlaes: Paulson Plan Bring On Accounting Deja Vu

The problem with mark to market and short selling and the hosts of like mechanism is that it attempts to establish a price for that asset based on the last done transaction. We all know that one sparrow does not make spring but this is exactly what is happening to the capital markets. We have allowed the proliferation of tools that has completely distorted pricing all in the name of efficiency. How else could we have have done this? I really don't know but I do agree with formerhawk that the market integrity as a efficient and optimal allocator of capital and resource (for the longer term) should be re-established. We have allowed traders and short term casino mentality to take over, to the detriment of everyone - including the same people who are proponents of this mentality.

Casino thinking should be restricted to the casino and not get into people's 401Ks and pension.