Friday, February 6, 2009

Bury the dead

Banks rebound on hope of accounting

This would mean that banks don't have to write down assets until they actually go bad. At presents banks have been going bust on the basis that their assets marked to market represent a huge loss killing their capital adequacy. Given that capitalism only works as an act of faith and faith is impossible if there is too much reality, there is a precedence that hiding things can work. I've heard someone compare mark to market as the equivalent of the gold standard in the current scenario. If this had been suggested on the upwsing when banks were revelling in the incredible apparent profits that mark to market gave them, I'd have been totally in favour. It would have actually helped stop the bubble inflating.

Posted by bellwether @ 10:46 AM (2921 views)
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2 thoughts on “Bury the dead

  • Fraud. Pure and simple degradation of the financial system.

    These losses need to be taken by someone and it should be people that bought overpriced houses. Any other “solution” is morally and financially wrong.

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  • Jackas – which incidentally is the finest TV programme of all time – what do you think about my point that mark to market seriously contributed to the bubble on the upswing

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