Are they really considering softening or removing the mark to market requirements? That is great news. Can you confirm it?
I was in the store the other day looking at a display of slow moving merchandise. MTM would indicate it had a zero value. For $0.00 I would have bought a truck load.
The Mark-to-Market accounting rule would be a mere paper change. If you truly want to know if changing that one rule would have an impact on either the economy or on the stock market, then look to Japan, as they just eased that rule this week.
If Japan’s Nikkei runs up Monday, then there you have it.
But it won’t.
Paper rules are just gimmicks.
What is needed is tangible change.
One such real improvement would be making mortgage bonds tax free like municipal bonds. That would make the bonds more valuable...and it would drive down interest rates.
Making bonds more valuable means less to mark down. Heck, you might even have to mark them *up* on corporate books!
That’s a real fix. Much better than gimmicks.
Watch Japan next week and you’ll see the gimmick fail...but making mortgage bonds tax-free will succeed because that ads real value, both intrinsic to the bond’s return as well as inherent inside the bond itself.