Mark To Market Hocus Pocus

FCN ^ | 3/12/09 | Nicholas Benton

[FromLori]

It is sheer madness that Wall Street types insist some changes in the rules of accounting can turn around the global economy. Fixation on such exotic notions as the mark-to-market and up-tick rules only perpetuates the "smoke and mirrors," and completely misses the mark on what's really wrong to begin with.

The typical Wall Street operative, like an accountant, has as his life's objective evening out balance sheets to conform them, among other things, to investor expectations. Therefore, if there are rules that make it hard for that to happen, there are howls to change the rules.

It has been by following stock market and typical accounting principles that many U.S. newspapers, for example, are now on the brink of bankruptcy. Faced with shortages in revenues, newspapers cut non-revenue generating costs. So, newsrooms were gutted while preserving advertising sales staffs.

What accountant can figure the true value to a newspaper of a good reporter? All the accountant sees is that the reporter is taking a salary, and not bringing in revenue.

[FromLori]

I think the Market Ticker guy is a much better authority on it really.

http://market-ticker.org/authors/2-Karl-Denninger

[incredulous joe]

Thanks.

I don’t know why folks in talk radio ( I think I’ve heard this most often used on Hugh Hewitt, Laura Ingraham and Dennis Prager) simply spit “mark to market” and assume that everyone knows what they are talking about because of the context in which it is being used.

[incredulous joe]

Thanks ~ seems like an easily digested analogy to me.