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Politics : Sioux Nation -- Ignore unavailable to you. Want to Upgrade?

To: stockman_scott who wrote (162558)	3/8/2009 7:37:49 PM
From: Rock_nj	1 Recommendation Read Replies (4) \| Respond to of 361829

Why can't they come up with a model that everyone agrees on that discounts future cash flows and automatically adjusts when interest rates change, etc.? This would be based upon decades of data regarding how to value such securities and decided upon by some governing body like The Treasury. This is something banks and other businesses already do to determine the real price of mortgage backed securities they hold or are looking to buy. Sure, some bank portfolios would be slightly undervalued or overvalued at times, since in reality they will not align directly with the model agreed upon. But at least a realistic method of valuing bank assets would be in place that would be based upon what a loan portfolio would be worth if held to maturity, not marked to market during times of distress. I don't see why this would be such a hard thing to do, as long as the rules and valuation methods were clearly laid out and fair based on realistic assumptions? Also, what about an exchange to trade these assets to bring liquidity and transparency?