Pro-M2M sentiment

I'm seeing more and more articles assaulting the changes in M2M rules. Here's another from the economist.com. It's going to come down to whether banks are willing to accept the valuation on their toxic assets and sell them as part of the PPIP or whether they will refuse to part with them and instead mark the assets to model (higher than market). Last I heard the PPIP was still weeks away, but it's going to happen eventually. I still say whatever happens the activity validates the clarity provided by M2M, so bring it back!

Another Mark to Market post

Saw this on the mark to market myth through marginalrevoluation.com (great blog site).

Also, if you see Tyler's post on Delta Airline...been there done that.

Geithner's Plan and Mark-to-Market

Couple thoughts on Geithner's plan (aka 'TALF'). First, seems like Wall Street has finally warmed up to him, no longer does the market free fall every time he opens his mouth. Now, it does seem like this whole plan is a bit of a stretch of the FDIC's role and the details seem to be a huge win for anyone participating (with the exception of the tax payer). So in the end, this is another bail-out that's disguised as a market making mechanism. Socialism here we come.

One thing I would like to see is an ETF or Mutual fund established to allow some of us main street investors to participate in the TALF program. I mean if I have almost no risk and could stand to make some serious returns I want my piece of the pie. Let's hope Bill Gross hooks up the rest of us with a deal like this.

A quick final piece on mark-to-market (MTM), can't wait to see the relaxed reporting requirements combined with a pseudo-market created by the TALF. What a mess!

Blame to spread in the Financial crisis

Seems like everyone is looking for someone to blame for the financial meltdown. I've started to think critically of my own profession and wondered did accountants miss the call? Is there something else that accountants could have done to reign in the leverage and exaggeratedly positive pricing models? Hard to find much supporting my suspicion, so I guess I'm on my own. What I do know is the as accountants we typically spend so much time focusing on minute details of accounting standards, I blame this on the last accounting crisis (post-Andersen and Enron and in the time of Sarbanes-Oxley), which focused accountants attention of very specific controls in the financial reporting process. However, the true risk that was missed was the larger (step-back) view and using a more holistic approach to assessing the overall business strategy of companies. In this the accountants may have dropped the ball again and the only thing people care about is mark-to-market!

So here's the end game...the accountants need to focus an equal amount of attention to being a trusted business advisor as to being a strict arbiter of the accounting rules.

Some accompanying reading...on economists missing the call and some mark-to-market reading.