The Market Celebrates Pro-Bank-Fraud Measure

The stock market is up spectacularly this afternoon. That's the good news. The bad news is that it is gaining for a terrible reason: relaxation of mark-to-market accounting rules that are supposed to keep bank financial statements honest.

Reuters reported:

U.S. stocks jumped 4 percent on Thursday after world leaders agreed to pump an additional trillion dollars into the economy to fight the financial crisis and on rule changes aimed at giving banks flexibility when dealing with toxic assets.

Already, the mark-to-market pushers are gloating. Something called the Center for Investors and Entrepreneurs at the Competitive Enterprise Institute, whatever the hell that is, just emailed a gloating press release saying as follows:

The events leading to the Dow's climbing over 8000 today can be properly called the Mark-to-Market Relief Rally. More than any expected action of the bureaucrats and politicians at the G20, the decision expected today of the Financial Accounting Standards Board (FASB) to relax strict application of mark-to-market accounting mandates, urged by members of Congress of both parties, it what's giving investors something to cheer for.

That's right. Let's hear it for cooking the books. Hip hip hooray!

Isn't it just wonderful that congressmen from both sides of the aisle are still capable of doing something stupid?

© 2009 Gary Weiss. All rights reserved.

A Barometer for Financial Journalism

There's been a lot of debate in financial journalism as to whether the media did a good or lousy job in covering the prelude to the current financial crisis. Well, here's one current. ongoing issue that is a good litmus test of the current coverage: mark to market.

So we have the good (Floyd Norris in the New York Times, Felix Salmon in Portfolio, ), the bad (this column in TheStreet.com) and the utterly brainless (Steve Forbes and Newt Gingrich in Forbes). Forbes has also sipped from the naked shorting kool aid, as has his mark-to-market allies at the U.S. Chamber of Commerce. Makes sense, as both involve blaming parties other than the bankers for the mess they're in.

UPDATE: Ryan Chittum at CJR Daily's Audit column says that the media is rising to the occasion and exposing the mark-to-market snake oil salesmen.

© 2009 Gary Weiss. All rights reserved.