[wagglebee]

From the late 1930s to 2007, the U.S. banking system was reasonably stable, with a few exceptions. One big reason for this is the absence of mark-to-market.

Mark-to-market was largely responsible for creating the present crisis and ending it will go a long way toward ending it.

[politicket]

Mark-to-market was largely responsible for creating the present crisis and ending it will go a long way toward ending it.

You're wrong. Most all of the banks weren't even marking their toxic assets to market anyways. They are still marking Alt-A's at 95-97 cents on the dollar.

This rule change will have little effect. Wall Street just doesn't realize it yet.

We will see a Dow of 4,000 before we see a Dow of 8,800.

[BnBlFlag]

“Mark to market was largely responsible for creating the present crisis......”
Bingo!!! (As far as commercial banks are concerned anyway - except for the mega banks)

[staytrue]

a loan to a guy who is current on his home loan but just contracted terminal cancer and will work and live 1-2 years will have a very low mark to market value on his loan. His loan will be performing for a while though.

a loan to a guy who just graduated from Stanford business school and is just landed a job that starts in 2 months and may be in default on his loan will nevertheless have a much much higher mark to market value on his loan than the guy with cancer.

many people are current on loans will low low teaser payments but have a 5 year ginormous balloon payment due that they will probably default on. Yes they are current but mark to market gives a more true picture.

the real killer coming up are the option arms. These things let you pay whatever you want and are by default “current”. However, what you don’t pay gets added to your principle. Mark to market says these “performing loans” are soon to blow up.