Yes lets have lair accounting to go with the lair loans. Right lets remove any transparency and put on our happy hats. I'm sure people will just be flocking to invest in finical companies now that they have no clue what that company is worth.Originally posted by: LegendKiller
I disagree somewhat, since nobody can "force" the market to stop doing something, especially when that market is trillions of dollars of capital flooding in.Originally posted by: Vic
Socialism is how capitalism got here.Originally posted by: senseamp
Ahh, yes, nothing like an injection of socialism to save capitalism from collapse.
I'm not defending what's happened here, just remarking that this has been as engineered an economic disaster as one could possibly imagine.
The article comments how capitalism would have let prices fall to the point that bargain seeking buyers would rush in (like you intend to do, as I know). What it failed to mention is that capitalism would never have let the market get this inflated to begin with.
The Fed is fixing the very same mess it caused. It's like getting handed an icepack from the guy who just punched you in the face.
Lets not forget that half the reason why there's a problem now is because this is an engineered crisis. Accountants thought it'd be a good idea to force people to value investments at short-term valuations, rather than fundamental ones. Thus, if the market suddenly drops in those investments, because one reason or another, you *have* to value your similar investments at those values, regardless of the underlying value.
This is akin to buying a brand new car for 80k with 16k down, then driving it off the lot whereby it's now worth 64k. Instead of just keeping your same loan parameters, the bank requires you to put down an additional 12k in capital because your asset was suddenly "marked to market". If the entire world worked like that we'd be stuck in a never-ending spiral of marks, as we are now.
People would have to sell their car to get out of the position, putting more "marks" out there. This would then depress the value of the car, forcing people to put more capital into the deal, forcing more "marks".
It's really a contrived collapse of the market for the sake of "transparency".
Now, if somebody really wanted to fuck with us, they'd simply buy up billions in "illiquid" assets and continually sell them for pennies on the dollar, forcing successive rounds of "marks". These short-term valuations would erode the capital bases instantly and force the banks into insolvency.
Yay for moron accountants overreacting (FAS 140, SarbOx...etc)