G20 leaders seal $1.1tr global deal

aardvark said:
no mention of the removal of the mark-to-market rules yesterday - now banks can value their assets to what they want them to be and inflate their profits on that basis - insanity.
Click to expand...

If mark-to-market has been removed or relaxed, this is a good thing if you want to end the short-termist nature of current banking.

Mark-to-market was a big influence in causing the credit crunch, due to making loads of bonds and securities worthless (because no-one would buy them) despite them having clear maturity value).
 
i have been trying to ignore all this because 95% of responses to anything involving any of this are nearly pure nonsense, i mean i dont think i could ever BS to such extreme levels, and i can BS like the best of them.
 
Dolph said:
If mark-to-market has been removed or relaxed, this is a good thing if you want to end the short-termist nature of current banking.

Mark-to-market was a big influence in causing the credit crunch, due to making loads of bonds and securities worthless (because no-one would buy them) despite them having clear maturity value).
Click to expand...

i disagree - an assets value can only be determined by what it is worth now - you cannot assume that the people who own these debts will continue to pay to the end of the term, it makes no account of default. if an american has a $200,000 mortgage on a house thats now worth $100,000 chances are he will simply stop paying and walk away from the debt - mark-to-market takes that into account. removing those rules and allowing the bank to pretend that their assets (debts) are fine and will continue to be paid is, imo, nonsense and goes completely against the free market.
 
Dolph said:
If mark-to-market has been removed or relaxed, this is a good thing if you want to end the short-termist nature of current banking.

Mark-to-market was a big influence in causing the credit crunch, due to making loads of bonds and securities worthless (because no-one would buy them) despite them having clear maturity value).
Click to expand...

I'll agree with that ;) It's absolutely crazy that banks were able to report massive profits because the value of their assets had increased. My view is that the value of an asset is pretty irrelevant until you actually sell it.

Well done Gordon!
 
aardvark said:
i disagree - an assets value can only be determined by what it is worth now - you cannot assume that the people who own these debts will continue to pay to the end of the term, it makes no account of default. if an american has a $200,000 mortgage on a house thats now worth $100,000 chances are he will simply stop paying and walk away from the debt - mark-to-market takes that into account. removing those rules and allowing the bank to pretend that their assets (debts) are fine and will continue to be paid is, imo, nonsense and goes completely against the free market.
Click to expand...

You can easily determine what an assets final redemption value is likely to be, you set a conservative default rate (say 10%, which is far higher than even sub prime US loans are running at at the moment) and work out what the value would be following that.

Mark to market doesn't take that default risk account, if it did, it would have taken it into account all along (the law that allows people in some US states to do this has been in place for decades), but it did not, because the market didn't take it into account either, and all mark to market takes into account is the market value of an asset.
 
scorza said:
I'll agree with that ;) It's absolutely crazy that banks were able to report massive profits because the value of their assets had increased. My view is that the value of an asset is pretty irrelevant until you actually sell it.

Well done Gordon!
Click to expand...

I thought the aim was to move away from short-termist risk taking, not encourage it. The compromise solution that will do that is a capped varient of mark to market, where the accounting value cannot drop below a pessamistic long term redemption value, not one where the value of assets becomes irrelevant.

Sadly, that's probably to sensible a solution to be considered.
 
Last edited:
Iraklis F.C. said:
would you let your local council decide how to run your house instead of you?
Click to expand...

People living in the UK are probably not the best to ask, over the last 60 years or so people have been rapidly shovelling responsibility from the person to the state (and forcing everyone else to do the same) to the point now where we have a state dependancy culture.
 
`

mmj_uk said:
Another step toward world governance and death of national sovereignty.
Click to expand...

What do you expect with increasing 'globalisation' there has to be some forms of global governance it doesn't mean national sovereignty will be diminished though.
 
clv101 said:
Channel 4 news last night had a former IMF man and Lord Peter Mandelson on. The IMF man said some Western Europe countries - including the UK - might need IMF money. Mandelson didn't deny it, just said we wouldn't be top of the queue. He then went on to try and 'de-stigmatise' receiving money from the IMF.
Click to expand...

That was funny.
 
It does annoy me having these large sums of money given out, you can't help but wonder if we will get it back and what is the cost.

Buying the banks I can handle, perhaps they will recover and turn a profit. But throwing unnacountable money into a black hole seems crazy without legislation. what stops people cashing in as opposed to just withdrawing more money from the system?

Even if mltiple governments do it I am sceptical. OK share prices were up but this is people making a quick buck.


Spend some money on government projects to reduce unemployment and invest in our infrastructure like roads/railways. permanent jobs they will not be but we are getting 10% unemployed now.

then again maybe paying for this is cheap compared to the banking crisis.
 
I thought this was awesome :D

PM_s_historic_G20_d_773109a.jpg
 
You must log in or register to reply here.
Back
Top Bottom