Mark-to-market

ℹ️Mark-to-market

1Liner :

Dumb/democrat idea of increasing the volatility of assets held by banks, by marking their value to the last market sale.

Summary :

FAS-157 passed in 2006 by Democrats said that instead of valuing an asset on a low-volatility manner (pegging a value to a 3-5 year rolling average), all assets of a like kind must be pegged to the last market sale. (Mark that value to the last market sale).

FAS-157 passed in 2007 by Democrats said that instead of valuing an asset on a low-volatility manner (pegging a value to a 3-5 year rolling average), all assets of a like kind must be pegged to the last market sale. (Mark that value to the last market sale).
To those who don't understand economics, this sounds good: it's transparent, and instantaneous -- no one can hide what's happening. This was to try to compensate for Enron and other tricks of accounting -- but when it was passed, it was fought as being dangerous and injecting volatility into the market. Democrats don't listen.
What this means is when the one bank is struggling and required to sell an asset that no one wants for $.10 on the $1.00, then every other bank must peg all their assets as having an immediate 90% drop in value too. This injects/magnified volatility into the market, since your value is swinging much faster (and stronger) than the dampening effect that a rolling average has.

File:GeekPirate.small.png