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Daily Archives: April 14, 2009

On the Repeal of Mark-To-Market Accounting

April 14, 2009
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On the Repeal of Mark-To-Market Accounting

I received an email from a subscriber last week, asking, “What do you think about the banking sector after the M2M has been approved?  Should I get some like BAC, WFC, UBS? ” M2M, for the record, stands for mark-to-market, the accounting practice of valuing an institution’s assets at the price the market would pay today.  Critics of the practice say mark-to-market accounting is partly responsible for the past year’s market crash, and argue that institutions should be allowed to value their assets at prices they believe can be realized in a “rational market.”  In fact, Representative Steve Cohen,...

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