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To: Peter Dierks who wrote (33968)	3/11/2009 11:05:37 AM
From: DuckTapeSunroof	Read Replies (2) \| Respond to of 71588

Re: "clearly called for suspension of mark-to-market accounting for regulatory capital purposes." There is an argument to be made for the proposition that --- when markets are frozen or otherwise non-functional, as CDS markets are now, and significant portions of certain MBS tranches also --- that some sort of improvement to the accounting rule would be desirable... because "mark to an outlier" or "mark to NO market" likely causes more problems then it solves. On the other-hand the SEC has made clear recently that it does not want to suspend mark-to-market (I agree with that: fix but don't 'suspend'). There are several other possibilities as well. Mauldin, for one, I believe advanced an excellent suggestion for modifying Moody's and S&P's ratings methodology for asset-backed securitizations that --- IMO --- could provide most of the benefits that a suspension of mark-to-market accounting would... with little to none of the downside. Believe that Mauldin's idea might both IMPROVE the level of investor visibility and market liquidity, as well as build a more rational market structure in this area: Message 25473628

To: Peter Dierks who wrote (33968)	3/11/2009 3:47:48 PM
From: DuckTapeSunroof	Read Replies (1) \| Respond to of 71588

UPDATE 1-FASB's Smith expects mark-to-market guidance soon Wed Mar 11, 2009 2:46pm EDT reuters.com WASHINGTON, March 11 (Reuters) - Some U.S. firms are not exercising enough judgment when applying mark-to-market accounting standards, a board member of the Financial Accounting Standards Board said on Wednesday. Lawrence Smith also said the accounting standards setter will "in the real short term" issue guidance on mark-to-market, or fair value, accounting that will address whether a market is active or inactive and whether a transaction is distressed. "We do have some problems ... in fair value accounting," Smith told a U.S. Chamber of Commerce conference. "It seems like people are not exercising as much judgment as they could have." But he said the vilification of mark-to-market accounting is overblown, saying it was not the cause of the financial crisis and is not as prominent in valuing assets as some people believe. Some lawmakers and the U.S. banking industry, which has been forced to write down billions of dollars' worth of hard-to-value assets in the illiquid markets, have pleaded for a suspension or modification of mark-to-market accounting rules. Don Nicolaisen, the former chief accountant at the U.S. Securities and Exchange Commission, told the conference that finding an alternative to mark-to-market accounting would not be easy. "I haven't really heard a lot of explanation of what would be the right approach," Nicolaisen said. He said using a historical cost model would not be a good method. But Paul Boyle, chief executive of the United Kingdom's Financial Reporting Council, said mark-to-market accounting is simply an accurate reflection of the financial crisis. "The valuations are horrible because the products were truly horrible," Boyle said. (Reporting by Karey Wutkowski and John Poirier; editing by Richard Chang) © Thomson Reuters 2008. All rights reserved.