No doubt that MTM advocates are furious over anything softening the rules. The basic issue, as I've pointed out in other posts, involves whether you can carry an asset at a historical price, which is no longer relevant. Mark-to-market pushes immediate recognition, straight to the bottom line. The problem is, you could hold a derivative where most securities are performing, but in an illiquid market, you can't get a fair price. One implication of today's changes means that you would only have to write down creditworthy risks against earnings and regulatory capital; the general status related to market conditions would still be disclosed elsewhere. Anything that reduces volatility and uncertainty in the financial markets (and, in particular, bank reserves) is a good thing.
Blagojevich Hit with 19 Federal Corruption Counts
Our favorite impeached Illinois Governor is back in the news, breaking while he was taking his family on a Disney vacation. The counts go beyond the well-known attempt to put Obama's former Senate seat up for sale, including things like holding up state aid for a Chicago newspaper after a critical op-ed was published against him and a massive kickback scheme involving the refinancing of state pension funds. I wonder if he'll be allowed to jog in those latex running suits while in the big house...
The Senate Votes in Favor of a $3.5T Budget
Absolutely unconscionable. This is the biggest planned deficit spending in the history of the world. Stoney Hoyer, the House Democratic Majority Leader, wrote a disingenuous op-ed in the Wall Street Journal, with a bait-and-switch title implying it was time to take action against the gapping federal deficit. This is classic Obama double speak: deny exactly what he's calling for (the latest example is Obama's assurance he's not interested in micromanaging the auto industry). Another example of propaganda being circulated unchallenged in the national media is that there is no alternative Republican budget. Wisconsin Congressman Paul Ryan, also in the Wall Street Journal earlier this week, laid out a comprehensive plan, including a thoughtful response to the issues of entitlement issues like social security and Medicare. Word to Obama and his Democratic cronies in Congress: you break the auto industry; you own it. You break the world's greatest economy with reckless spending, class warfare and irresponsible social welfare spending, and we conservatives will make you eat every vote.
