Tuesday, March 31, 2009

I predict that if mark-to-market...

...accounting is modified this week the stock market will fall, not rise. Like reinstating the uptick rule on short-selling, it does nothing to materially effect values. It's like blaming the thermometer for the temperature outside. If anything, I think it will add to uncertainty as investors have to guess at the value of companies' assets. The stock market likes transparency, not opacity.

If you don't like mark-to-market accounting, you shouldn't be a publicly-traded company. Buy back all of your shares and function as a private equity firm or a hedge fund.

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