Mark-to-Market Accounting Rules

[Timshel]

I am sure many of the lefties will reject this simply because of the source, but I can see no faults with it.

http://www.heartland.org/custom/semod_policybot/pdf/23797.pdf

Why should we be creating these fire sales that feed on one another because of some accounting practice that does not truly reflect reality?

 

[uscitizen]

So they can pidgeon hole their bad stuff and have us insure it ?
Perhaps if they are also not allowed to take a tax deduction on itm as a loss since by their plan iw won't be a loss.

A way to hide their mistakes it would seem.

 

[Timshel]

So they can pidgeon hole their bad stuff and have us insure it ?
Perhaps if they are also not allowed to take a tax deduction on itm as a loss since by their plan iw won't be a loss.

A way to hide their mistakes it would seem.

I really don't see the need for the government insurance. Just suspend the mark-to-market rule and then tweak it to better reflect reality.

I would guess that marking them down to market reduces their tax burdens quite a bit.

It's not away to hide their mistakes. These are long term assets that are almost certain to payoff at higher rates than they fetch in a fire sale. They might even prove profitable. But, the fire sale itself just feeds the downward spiral.