This page contains a single entry from the blog posted on May 27, 2010 10:35 PM. The previous post in this blog was Urban (renewal) cowboys. The next post in this blog is No press release on this one. Many more can be found on the main index page or by looking through the archives.

E-mail, Feeds, 'n' Stuff

Thursday, May 27, 2010

To tell the truth?

The banks want no part of it.

Comments (6)

From the link: Banks claim that the [mark-to-market] change would force them to take big losses on loans during periods of economic distress. Doing so would mislead investors, they say, because the loans would probably still pay off over time even if they were trading at lower market prices.

And, taking this one step further, not doing so doesn't mislead investors?

As an investor, I would certainly want to know the amount of liquidity in the asset.

No kidding. Market value is the best measure of economic reality. If the market thinks a particular asset is crap, then it's crap. Yeah, it may eventually turn out to be an unrecognized gem; monkeys might also eventually fly out of my derriere.

What's Elizabeth think of this?

Here's a gem from 2003:

Middle-class income doesn't buy middle-class lifestyle
HLS professor sounds an alarm to families: One in seven will go bankrupt


'We discovered that having a child is the single best predictor that a person will go bankrupt, she says. By the end of this decade, one of every seven families with children will file for bankruptcy.

Families are not going broke over lattes. Families are going broke over mortgages.
- Elizabeth Warren, the Leo Gottlieb Professor of Law in 2003.

Missing from the article is one of my favorite terms from the crisis: Mark to model. Instead, we get this Orwellian-sounding description: "fair value, based on the banks’ own assessment." Really? What the stuff would be worth if things were fair?

As I recall this was all about being able to describe a bank's health in ways that would maximize the amounts they could gamble on lucrative but shaky security swaps.
That's why they are howling so loudly. The amount of gall it takes to say they don't want to mislead investors is beyond measurement. It should cause our entire galaxy to explode. The entire triple-A rated scam was predicated on misleading investors. That's the reactor core of the meltdown.

Matt Taibbi said this morning that despite all the last-minute sell-outs the banking reform bills actually have some good things in them. But these will probably get watered down as he said "Niagara Falls-style" in conference.

Meanwhile this bunch in this article talks about a comment period 'til September and more wrangling ahead. I wouldn't believe anything positive until they actually do it.

The financial sector is a giant radioactive leech on our necks, and this article has more red flags than a Lindsay Lohan blood test.

It's way too compicated for the common person to understand. Leave it to the bankers.

Clicky Web Analytics