On Mark-to-Market

I love this quote:

“Next time you hear a banker denounce mark-to-market rules, ask if he runs his business that way. Will he offer you a mortgage loan based on what you think your home should be worth, which you can repay only if you make a lot more money than anyone will pay you? If so, then perhaps the bank should be able to use “Alice in Wonderland” accounting on its own books.

Or maybe that is not such a good idea. The banks already tried that, with liars’ loans. Those loans did not work out so well.”

-Floyd Norris

If any of you Mark-to Market defenders care to take a swing at that one, have at it . . .

Category: Credit, Really, really bad calls

Goldilocks in China!? Euro Zone CPI heats up

Soft landing hopes in China after the moderating manufacturing indices over the weekend helped to send the Shanghai index higher by 1.6% and that set another positive tone for the rest of the region and that spilled over into Europe. However, most European bonds are trading lower after Dec Euro Zone CPI rose 2.2% y/o/y,…Read More

Category: MacroNotes

Reform It! Broken Budget Process Costs Time, Money

Bruce Bartlett is an American historian and economist; he was a domestic policy adviser to President Ronald Reagan and was a Treasury official under President George H.W. Bush. ~~~ One consequence of the Senate’s irresponsible delay in confirming Jacob Lew as director of the Office of Management and Budget is that Congress will have less…Read More

Category: Politics, Think Tank

BofA Freddie Mac Putbacks Resolved for 1¢ on $

Bank of America settled numerous claims with Fannie Mae for an astonishingly cheap rate, according to a Bloomberg report. A premium of $1.28 billion was paid to Freddie Mac to resolve $1 billion in claims currently outstanding. But the kicker is that the deal also covers potential future claims on $127 billion in loans sold…Read More

Category: Bailouts, Credit, Legal, Regulation

AAII Asset Allocation Survey: Bond Holdings at a 10-Month Low

From AAII.com: Individual investors kept their portfolio allocations to equities essentially unchanged last month, according to the latest AAII Asset Allocation Survey. Stock and stock mutual fund allocations were 62.2% in December. The historical average is 60%. Bond allocations fell for a third consecutive month. Individual investors held 20% of their portfolios in bonds and…Read More

Category: Psychology, Think Tank

MP3 Experiment

Category: Humor, Weekend

Back in the Saddle

After a week of holiday festivities, its good to be back in the swing of things. I have a few exciting items in the hopper for the coming weeks — some modest changes to the site design, a few new regular features, and some new guest authors in the think tank. Today, we hit post…Read More

Category: Weblogs

The Art of Argument

The Art of Argument from Bryan Villagonzalo on Vimeo. Dialogue scene from THANK YOU FOR SMOKING.

Category: Weekend

“New Years” Readings for Monday

Here are the latest additions to my Instapaper: • The New Speed of Money, Reshaping Markets (NYT) • Electric Cars Get Charged for Battle (BusinessWeek) • Algorithms Take Control of Wall Street (Wired) • Sweden Shows Central Bankers How to Fight Next Asset Bubble (Bloomberg) • Funny = Money (NYT Magazine) • 439 Ways to…Read More

Category: Financial Press

Post 16,000

Category: Weblogs