Mark to market is not what killed Enron. Greed and illegal activities killed Enron, specificially variable interest entities (VIE's) and special purpose entities (SPE's) which were used to hide debt and liabilities from Enron's balance sheet.

In theory, mark to market is what should be done. Basically it says, when you issue your financial statements you have to tell investors what your company's financial holdings are worth in today's market. If they are worth $0 dollars investors should be told that.

Suspending mark to market just hides the symptoms of bad management from investors.

Instead of getting rid of mark to market we should bring back oversight and regulation of derivative mar...

Mark to market is not what killed Enron. Greed and illegal activities killed Enron, specificially variable interest entities (VIE's) and special purpose entities (SPE's) which were used to hide debt and liabilities from Enron's balance sheet.

In theory, mark to market is what should be done. Basically it says, when you issue your financial statements you have to tell investors what your company's financial holdings are worth in today's market. If they are worth $0 dollars investors should be told that.

Suspending mark to market just hides the symptoms of bad management from investors.

Instead of getting rid of mark to market we should bring back oversight and regulation of derivative markets.

President Clinton said specifically that the single one thing that caused the stock market decline was the suspension of the uptick rule by SEC Chairman, (republican) Christopher Cox. This allowed institutional investors to pile on stocks that's values lowered by short selling them (betting on the price going down, which was effected by investors seeing the large amount of short sells, self-fulfilling prophecy if you will, what a scam).

The Obama administration is set to reinforce the uptick rule which requires that a stock go up in price before you can short sell it. This way you can not cause a panic the heard mentality and profit of the ensuing loss.

Steve Forbes conveniently left out that back in 1938 there was no such things as a collateralized debt obligation (CDO). These are cash flows represented by payments of customer who own credit cards or mortgages.

These things have only been around since 1987 and since their incorporation we have seen 2 major bailouts of US banking systems (the 1980's) and today. Anybody see the link?

Maybe the correct idea would be to prevent the people who make mortgages from passing those mortgages along to other investors. If they were responsible for the mortgages they made I guarantee you they would make more financially sound loans. Same thing for credit card companies. The republicans overwhelmingl...

Steve Forbes conveniently left out that back in 1938 there was no such things as a collateralized debt obligation (CDO). These are cash flows represented by payments of customer who own credit cards or mortgages.

These things have only been around since 1987 and since their incorporation we have seen 2 major bailouts of US banking systems (the 1980's) and today. Anybody see the link?

Maybe the correct idea would be to prevent the people who make mortgages from passing those mortgages along to other investors. If they were responsible for the mortgages they made I guarantee you they would make more financially sound loans. Same thing for credit card companies. The republicans overwhelmingly voted in legislation that made it significantly more difficult for individuals to declare bankruptcy. Afterwards Credit Card companies were giving cards to anyone and increasing credit lines because you were on the hook to pay no matter what. Easy Credit!

If there was the danger of individuals being able to declare bankruptcy then credit card companies would make responsible extensions of credit.

Forbes article is over simplified.

How about this for an idea. Instead of requiring banks to have a certain amount of assets on hand simply require them to have a certain % of cash on hand. Then banks can make all the stupid, risky investments they want.

Before mark to market you could simply list your historical purchase price of the stock. Is this realistic? It doesn't tell an investor what the real value of the stock the bank holds in its portfolio is worth.

Let's say you apply for a loan. You want to use the houses you bought 20 years ago as collateral. Now let's suppose you are a slum lord and never made any repairs and those houses are junk. Should you be able to put down what you paid for those houses 20 years ago for collateral or should you have to state what their value is today?