Ransome

How the U.S. Banking System Was Madoffed by the FASB

If we have a CDO cubed made up of several tranches of 10,000 ALT-A loans that were originated under different standards such a NINJA, how do you value it? Perhaps the securities are too complex. Our financial products are so complicated that risk cannot be assessed. Theoretically, you did not need to assess risk carefully if you could buy protection. Look at the results of AIG mis-assessing risk. Will this become the norm? No one will touch these things unless at a steep discount because of their structure. These securities were not meant to be held by the broker dealers, hence the shoddy origination standards.

Correct me if I am wrong but M2M establishes the rough value of a company and is used to determine capital requirements. How do you determine capital requirement and assess risk with M2Myth? Both will become important in the future with respect to Regulators. Where are the examples of securities that are grossly mis-priced using M2M? Certainly by now they have a track record of returns so why not M2Model? Why change the accounting?