Bulls Betting on the Demise of Mark to Market, Revival of the Uptick Rule

If the administration follows through on this, it would be the first good thing they have done. and guess what . . . . it won't cost us (the taxpayer) anything. huh . . . there is a concept.

This doesn't do anything but provide the financial institutions with an opportunity to make themselves look more viable than they really are. All of these banks are on the verge of bankruptcy pending a "bailout". This will only allow the banks to further dillusion people. If a house is valued at $200,000 then you should not be able to mark the value of that house on the books to $300,00 because you've loaned that much out on it. Depreciation value is something that is very real in all business structures. Banking is no different. If the value of your assets goes down then it should show that way in your reports.

When I go to renew my mortgage I'll tell them I think my house is worth 5 million and maybe they'll lend me that amount and I can retire on the interest. Then the bank can say that they've lent me 5 million for the house so that is what its worth. Unreal... you can't allow that type of business to take place. False illusions of monetary value is just another way to manipulate the market. People have been put to jail for stuff like this... I believe they call it FRAUD

who gives a ratsass what traders think re: the change in the uptick rule---as if they are disinterested observers and experts----why even ask them unless you also ask US---ordinary investors, who will see a big change in their experience investing without the predators badgering them to death.

Gee, if the market actually goes up, it might even bring us some money, at least those of us that have retirement plans!

I've got a better idea! Have Nanci Pelosi and Barney Frank change the law that the markets can only go up. Why not? The sad truth is, the stock markets in the U.S. are a totally false indictor of our economic health. Government has now manupulated every indicator of our economic health; unemplyment statistics, GDP statistics and now the markets themselves. If you want a true indicator, look at the tent cities, soup lines, people living in their cars.

If you want to buy a bank buy Barclays.

George Orwell is looking down on all this with a big grin on his face. Will the banks change the rules so I can make sure my checkbook is "balanced" at the end of the month, no matter how much money I have and spend?

Guys You are wrong. Mark to market makes the banks value the assets at very low prices, even though 94% of them are still solid and the mortgages are being paid on time. It is a practice that, actually, makes the banks look much worse than they are. Having 6% of a portfolio being worthless, does not make the entire portfolio worthless. Unfortunately, this is how it has to be accounted for on Mark to Market. Finally, the Obama administrationn is making a good move, and, believe it or not, this one is not costing us a trillion dollars.

Just another fraud in a long line of frauds. If you don't like the market price, just change the regulation, and viola, the price is higher!

Both of these changes are the best thing that can happen. No one should be able to profit by creating a downward momentum on a stock that THEY DON"T EVEN OWN and destroy the wealth of others. Also, just because buyers are jittery and nonexistant as they wait for home prices to bottom doesn't mean that the price of toxic assets are ZERO. The bottom line value of real estate should be the price to construct the equivalent home TODAY, or as an alternative whatever is assumed for tax assessment purposes. Neither is ZERO. Just because you don't have a buyer doesn't mean that the value must be reduced, in a non-existant market, as if you HAD to sell it today. The asset can be held until a buyer is available at a reasonable price, just as with any other asset. This is not cooking the books...it's just common sense.

Newspeak is here. Thanks Chris Dodd. In a couple of years we won't forget you. :-)

Revival of the uptick rule will put an end to thousands and thousands of day-trader short sellers, many of them naked short sellers, working in concert to deliberately pound the market down down down. Everything fell apart as soon as that rule was removed.

A loan is like any other asset. You keep it on the books for what you paid for it (good or bad) until you sell it. If a bank wrote a loan for $300,00 on a house that was worth $300,000 last year that is what should show on the books. It doesn't matter if the value of the house is now $200,000 unless the bank sells the loan. When you start raising and lowering the book value of an asset that you still have but do not sell your are playing games with the company's financials. You do not depreciate those kinds of assets. Besides as any landlord knows, depreciating real estate is only a tax game to avoid tax on the income.

Most people don't realize the mark to market rule was implemented in 2007. The world didn't start or end since this rule. Problem was, it was implemented to the extreme. SubPrime and Loans in default or with late payments (history included) should be valued at mark to market. If a non subprime loan is in good standing and you expect to collect it in full why should the bank be forced to devalue it? As long as we remember, it will work both ways... when the housing market recovers and the prices are rising let's not reinstate it.

hey day traders....the game is over. Now you actually will have to know something to make your living. Don't worry, someone will have a new strategy on CD for you soon.

There have been some wrong analogies in the comments. If your house is and has been worth $300,000, and lots of solvent people with good credit would buy it for that if they could only get a loan, but other factors have made loans unavailable, the mark to market would let you value the house at $300,000 for some purposes until the situation with loans clears up. The trouble is that, in banking, the valuation is guaranteeing demand deposits, and they aren't really demand deposits if you allow a valuation that could not actually be realized if the deposits were to be demanded at the current time. Going forward, banks must be limited to banking. If their holding companies want to speculate, fine, but the assets of the holding company can't be counted as the bank's assets. The bank has to be capable of standing on its own and being transferred to a new solvent operator in case the holding company loses all its capital in speculation. Let's take our lumps. Close these failed banks, move their deposits and good loans to solvent small banks in the region of the depositors and properties securing the loans, and get America back to its business. Leave the rest for bankruptcy courts to dismember. What we're bailing out is the speculation, not the banking.

Sadly, John Najarian talking his book, as usual. Of course, when he says, "I'm not for rigging markets," he means just the reverse, just like when people say, "It's not about the money." Remember, all the bank CEOs profited enormously from mark-to-market when the now-toxic debt was rising. And please stop saying, "there is no market for these assets." There IS a market -- just not at the price the banks want to accept!

Possible MTM change is not about valuing houses, it is about valuing loans on the books. It is currently common to see 80% off MTM discounts - on average, the houses (underlying collateral) are off by 20-30%; even in FL and CA it is 40-50% off; also, most people "hold to maturity" - that is, continue to pay mortgage even if the price of the house dropped. We could argue that large part of the morass we are in now (at least, the banking part of it) resulted from MTM untimely introduced in 2007 - had it been in place back during the S&L and Latin American debt crisis in the 1908s and 1980s there would have been nothing left from our banking system.

Another deficiency with Mark to Market is that in a declining market even if the securities are valued accurately on a given day, investors will not honor that but will assume the value to be significantly lower. Feedback control theory wiould show this well intended rule to be flawed.