Mark to Market chatter

Congress is talking about changing Mark to Market rules for the banking system. (mark to market means that assets are given the same value as other similar assets.) In today's market their are billions of dollars of bank assets that no one wants to buy at any price. There is no way to price these assets any anything much over zero. The alternative to Mark to Market is mark to model. The bank would be allowed to speculate as to the current and future value of a mortgage or an asset based on their opinion or estimation of the quality of the borrower or the asset.

The mark to model allows banks and bankers to get away with pushing potential losses out to future years and in turn can make current earnings look far better then they appear to be using Mark-to-market. For years banks were able to cloud their true earnings or true value of assets by using mark to model. The congress is only talking about mark to model again because they see no way out of the financial crisis if they accurately price the current bank assets. Imagine you wanted to sell your house and decided that it would be worth 100,000 more in 10 years and then expected to be paid that price today. Mark to model is similar to this and is nosensical. It will be the biggest scam of the American tax payer if the government guarantees or buy these toxic assets held by banks at any other price than current value.