"Let's Play Pretend!"

[BoberFett]

Originally posted by: 3chordcharlie
The problem is that you're right - but how can we know that the market is valuing these assets correctly? At the moment, it seems almost certain that it is undervaluing some types of debt based on momentum, emotion and instinctive reaction.

Maybe the solution is to have some sort of long-run average value apply to M2M policies. So you get to value these assets at their 2-week average, and never have wild swings.

Any accounting system is, of course, going to be inaccurate, but while your example is concrete, the real world isn't like that.

BTW I was really menaing you previously, I've seen enough of your posts to know you have a better idea about accounting than most (probably better than me).

Honestly my accounting knowledge is fairly limited, I just try to be logical. My exposure to accounting is that my first wife was an accountant and in my IT career I've worked closely with accounting and finance both as a developer and as a project manager.

Your idea of a longer run average might be a workable solution. It seems there should be something between M2M and stated value.