Banks (and brokerage firms) that own mortgage backed securities have been required — since November 2007 — to use mark to market accounting on these securities. Coincidentally, this was just around the time these mortgage securities started dropping precipitously in value. 2007 saw many mortgage firms get wiped out, and brokerage firms and banks holding these assets started realizing the volatility of these assets.
Mark to Market Suspension vs Bank Nationalization
March 3, 2009 by
Mark to Market is a topic I have written about previously. You can read about them here. I don’t like changing the rules of the game in mid-stream, but something drastic needs to be done. A terrific opinion piece was written in the Wall Street Journal recently by Peter Wallison. If you click on his [...]
Modifications Needed For Mark to the Market Policy
February 15, 2009 by
What is left in the governments bag of tricks to get the banks back on track? One topic that I wrote about — 5 months ago — has popped up this past week with more and more frequency. We are finally starting to hear more and more chatter about relaxing “Mark to the market” regulations. [...]
Government Bailout Money Being Used To Buy More Banks
November 1, 2008 by
One of the side stories coming out of the bank bailout has been this: some banks are actually using the money — to buy other banks! My first reaction when seeing this headline, was “why can’t these banks do what we ask them to do?” I did read a story recently where some banks that [...]
Oil’s Recent Relative Strength Sell Signal: Changes Ahead?
We saw a pretty significant signal recently from the oil sector. A relative strength sell signal. This does not mean oil immediately becomes a terrible place to have money at work in March or April 2010. But longer term, it suggests oil will (likely) under-perform the overall markets. And, it’s possible the sector could [...]