To my knowledge these are actual trades that are reported in these
indices, not assigned values based on aspects of the assets or what
an insurer would give you in an accident.
These indices are a recent benefit to the market, since OTC products
have typically lacked transparency for this as well as other reasons.
Did you read the open letter from the auditors that Frank posted for
me yesterday?
Maureen
--- In AsburyPark@yahoogroups.com, "justifiedright"
<[EMAIL PROTECTED]> wrote:
>
> Are creditex and markit reliable? Do people routinely take issue
> with their amounts (like I do with blue book on cars?)
>
>
>
> --- In AsburyPark@yahoogroups.com, "radio881gal" <restore881FM@>
> wrote:
> >
> > Tommy -
> > Not sure if here you're referring to my post about the Wall St.
> > bailout.
> > If you are, I'd want to say that there are indexes by Creditex
and
> > Markit, which contain traded prices on Credit Default Swaps
(CDS)
> > and Collaterolized Debt Obligations (CDOs). Paulson doesn't want
> > taxpayers paying the low prices the professional traders are
> > currently paying for these. He's already said he wants taxpayers
> to
> > buy these assets at future maturity rates. Wasn't that what
Asbury
> > Park residents wanted and didn't get in the redevelopment and
> rehab
> > zones?
> > Maureen
> >
> > --- In AsburyPark@yahoogroups.com, "justifiedright"
> > <justifiedright@> wrote:
> > >
> > > How do you use Mark to Market accounting when dealing with an
> asset
> > > that is not widely traded? You have no data upon which to set
a
> > > value.
> > >
> > > Also, when a firm goes under and is selling off their assets at
> a
> > > fire sale, is it fair to use those sale numbers when someone
> else
> > is
> > > valuing an asset under Mark to Market?
> > >
> > > Maybe the realty experts on the board can opine.
> > >
> > > If only we had someone on the board who regularly dealt with
> burden
> > > of valuing unique property? :-)
> > >
> > >
> > >
> > >
> > >
> > >
> > >
> > > --- In AsburyPark@yahoogroups.com, "asburycheech"
> <asburycheech@>
> > > wrote:
> > > >
> > > > Hi Folks,
> > > > Maureen Nevin who is a member of this group is having an
> issue
> > > with
> > > > her internet connection, so she asked me to pass along the
> > > following.
> > > > She has a lot of good information on her asburyradio.com
> > website,
> > > but
> > > > hoped those interested might like to read the following as
> well:
> > > >
> > > > ---------- Forwarded message ----------
> > > > From: Jay Hyde <jhyde@>
> > > > Date: Tue, Sep 30, 2008 at 3:12 PM
> > > > Subject: CAQ Urges Congress to Reject Proposals to Suspend
> > > > Mark-to-Market (Fair Value) Accounting
> > > > To: maureen@
> > > >
> > > >
> > > > September 30, 2008
> > > >
> > > > Dear Member of Congress:
> > > >
> > > > The Center for Audit Quality (CAQ) believes that proposals
> > > advocating
> > > > suspension of mark-to-market (or fair value) accounting are
> not
> > in
> > > the
> > > > best interest of investors or the capital markets and should
> be
> > > rejected.
> > > >
> > > > The principles of mark-to-market accounting are rooted in the
> > > > fundamental virtue of transparency and are central to
informed
> > > market
> > > > decisions and efficient allocation of capital. In our view,
> > > investor
> > > > confidence would be undermined by efforts designed to mask
the
> > > actual
> > > > value of financial assets at a given point in time.
> > > >
> > > > It is important to underscore that mark-to-market accounting
> has
> > > > contributed positively to revelations about the severity of
the
> > > > economic crisis facing our country's credit markets and
certain
> > > > institutions, but it did not create the economic crisis.
> > > >
> > > > Recently, some have suggested that the Securities and
Exchange
> > > > Commission (Commission or SEC) or the Financial Accounting
> > > Standards
> > > > Board (FASB) should suspend the application of mark-to-market
> or
> > > fair
> > > > value accounting or somehow impose a moratorium on mark-to-
> market
> > > > requirements for certain financial institutions when preparing
> > > > financial statements to be used by investors.
> > > >
> > > > Although determining fair values for financial instruments
in
> an
> > > > illiquid market can be challenging, the best estimate of the
> > prices
> > > > that would be received for such instruments in orderly
> > transactions
> > > > occurring at the measurement date remains the most relevant
> > > > information for investors and policymakers. To lessen the
> > > > uncertainties about the value of these securities, it is
> critical
> > > that
> > > > investors continue to have the insight provided by the
> > application
> > > of
> > > > mark-to-market accounting principles.
> > > >
> > > > Many of the current requirements stem from the Savings &
Loan
> > > crisis
> > > > in the 1980s, when we learned that not knowing the real,
> current
> > > > values of financial instruments held by financial
institutions
> > can
> > > be
> > > > devastating when the bubble finally bursts and institutions
> are
> > > forced
> > > > to close their doors. The current requirements provide a
> uniform
> > > and
> > > > consistent method to measure market values and provide
> investors
> > > > increased disclosures about those measurements. Suspending
> > > > mark-to-market accounting would throw financial reporting
back
> to
> > a
> > > > time of less comparability, less consistency and less
> > transparency.
> > > >
> > > > If there are concerns with the impact of asset valuations on
> > > capital
> > > > requirements of financial institutions, regulators have
> > > alternatives
> > > > other than obscuring information relevant to investors.
> > Regulators
> > > may
> > > > modify those requirements based on criteria other than fair
> value
> > > > accounting measurements to the extent they deem appropriate.
> > > >
> > > > Other capital markets participants also have expressed
> concern
> > > about
> > > > the lack of transparency that would be created by a
suspension
> of
> > > > mark-to-market accounting. The Council of Institutional
> Investors,
> > > > which represents 130 public, corporate and union pension
funds
> > with
> > > > combined assets of more than $3 trillion, stated in a recent
> > > letter to
> > > > the SEC that "[a]ny termination or suspension of fair value
> > > accounting
> > > > will lessen transparency and investor confidence in the
capital
> > > > markets at a time when such confidence is critical to the
> > > stability of
> > > > our markets and the overall economy."
> > > >
> > > > Likewise, the CFA Institute, a global, professional
> association
> > of
> > > > more than 97,000 investment professionals with offices around
> the
> > > > world, recently wrote to both members of Congress and the SEC
> and
> > > > noted that "[c]easing fair value reporting will only serve to
> > > > undermine the confidence of investors in our financial
> > institutions
> > > > and lead to a further crisis of confidence in our government
> and
> > > the
> > > > regulatory bodies overseeing those institutions."
> > > >
> > > > The proposed Emergency Economic Stabilization Act of 2008
> > restates
> > > > the authority of the Commission to suspend the application of
> > > > Statement of Financial Accounting Standards No. 157, Fair
Value
> > > > Measurements (FAS 157), and requires that the Commission
> conduct a
> > > > study on the effects of FAS 157 on financial institutions'
> balance
> > > > sheets, the impact of such accounting on bank failures in
> 2008,
> > the
> > > > quality of financial information available to investors, and
> other
> > > > matters, and report its findings to Congress within 90 days.
> > While
> > > a
> > > > restatement of existing SEC authority and a study of mark-to-
> > market
> > > > accounting and its effects are not necessarily harmful in
> their
> > own
> > > > right, efforts to weaken the transparency provided by the
> current
> > > > standard should be avoided, especially in this time of
> financial
> > > > instability.
> > > >
> > > >
> > > > The CAQ would be pleased to discuss with you any of the
points
> in
> > > this
> > > > letter at your convenience.
> > > >
> > > >
> > > >
> > > > Sincerely,
> > > > Cynthia M. Fornelli
> > > > Executive Director
> > > > Center for Audit Quality
> > > >
> > > >
> > > >
> > > >
> > > >
> > > > Cc: Henry M. Paulson, Jr., Secretary, Department of
> Treasury
> > > > Ben S. Bernanke, Chairman, Federal Reserve
> > > > Christopher Cox, Chairman, SEC
> > > > Mark W. Olson, Chairman, PCAOB
> > > > Robert H. Herz, Chairman, FASB
> > > > All Members of Congress
> > > >
> > > > The CAQ is an autonomous public policy organization serving
> > > > investors, public company auditors and the capital markets
and
> is
> > > > affiliated with the American Institute of CPAs. The CAQ's
> mission
> > > is
> > > > to foster confidence in the audit process and to aid
investors
> > and
> > > the
> > > > markets by advancing constructive suggestions for change
> rooted
> > in
> > > the
> > > > profession's core values of integrity, objectivity, honesty
> and
> > > trust.
> > > > Based in Washington, D.C., the CAQ consists of approximately
> 800
> > > > member firms that audit or are interested in auditing public
> > > companies.
> > > >
> > >
> >
>
------------------------------------
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