infp

Derivatives: Gambling at Public Expense

Bullish stock analysts who proclaim "the worst is over, financial stocks and the market are going up," never explain how exactly the derivatives debacle has been suddenly resolved. I can only infer that they believe that as long as the government agrees to take over most of the derivatives liability through TARP/PPIP type programs that the problem will simply fade away. I suspect that the derivatives debt is simply too large to be solved in this manner so I remain bearish.

Which Banks Are Holding Those 'Hard-to-Value' Assets?

I can't understand why we are asked to bail out huge financial institutions with government money while we are guessing at how much "hard to value" assets they hold. Is there really no transparency?

FASB's New Mark-to-Market Standards: April Fools' Came a Day Late This Year

Actually, banks do cancel homeowners' home equity loans if the bank concludes that the home value has fallen below a level to support the loan-to-value ratio under which the loan was first obtained. In a sense, that is akin to the bank performing a mark to market test on their customers.

Tech vs. Credit Bubble Bursts

Another fundamental difference; the government did not rush in with trillions of tax dollars to rescue failing tech companies in 2001. Also, many of these overvalued tech companies did play an important role in bringing us an amazing new tool; the internet. In stark contrast, the derivatives market succeeded in enriching a few bankers at the expense of virtually the entire world.