Free Republic

Sunday, February 21, 2010 Das: Mark to Make Believe – Still Toxic After All These Years! By Satyajit Das, a risk consultant and author of Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives In 2007, as the credit crisis commenced, paradoxically, nobody actually defaulted. Outside of sub-prime delinquencies, corporate defaults were at a record low. Instead, investors in high quality (AAA or AA) rated securities, that are unlikely to suffer real losses if held to maturity, faced paper – mark-to-market (“MtM”) – losses. In modern financial markets, market values drive asset values, profits and losses,...

Eureka! The Banking Industry’s Problems Are Solved! by Mike Larson 03-13-09 Mike Larson Who knew it would be so easy? Who knew we could solve the banking industry’s collapse by simply changing how we account for assets. Eureka! Problem solved! That seems to be the conclusion Wall Street came to earlier this week, judging by the reaction to Fed Chairman Ben Bernanke’s comments at the Council on Foreign Relations on Tuesday. During that speech, Bernanke weighed in on “mark to market” accounting, saying the following: “The ongoing move by those who set accounting standards toward requirements for improved disclosure and...

The Republican Study Committee has released an alternative to the Treasury Department's bailout proposal and will discuss the proposal at a press conference today. Conservatives have expressed concern that the Treasury's proposal will alter the country's free-market system, awards massive authority to the Treasury, and fails to penalize debtholders and shareholders. The committee's free-market alternative is listed below: REFORMING A TAX CODE THAT DISCOURAGES CAPITAL FORMATION Two-Year Suspension of the Capital Gains: Immediately suspend the capital gains rate from 15% for individuals and 35% for corporations. By encouraging corporations to sell unwanted assets, this provision would unleash funds and materials...