OOOOOOOHHH! The Financial Accounting Standards Board (known as FASB in the ‘hood) is meeting today to discuss, err, a possible, shall we say…relaxation of its policies regarding hard-to-value assets.
I haven’t been this excited since I was a little girl waiting in the rain for New Kids On The Block tickets in 1989! JK.
By giving banks more flexibility in how they value toxic assets, we may actually still have a bank left standing by the time we get through this. The only question is, if Mark-To Market is out, what’s the new methodology?
Luckily for the global economy, The Reformed Broker‘s got some helpful suggestions…
Option A) Mark-To-Gravity
CFO of bank climbs to the rooftop of corporate headquarters and drops a file folder containing the details of each asset. Comparative valuations are determined by the order in which said files hit the street below.
Option B) Mark-To-Margarine
Focus group is brought in and asked to taste-test CDO certificates with a creamy butter-like spread as a topping. CFAs watch from behind two-way glass and calculate valuations based on the preferences and commentary of participants.
Option C) Mark-To-Mark Cuban
The Maverick Billionaire himself is brought in to use his legendary skill at being lucky in the hopes that some of his good fortune will rub off on the toxic debt obligations themselves, thus negating the need to divine a value for them.
From Bloomberg: April 2 (Bloomberg) — The Financial Accounting Standards Board, pressured by U.S. lawmakers and financial companies, voted to relax fair-value rules that Citigroup Inc. and Wells Fargo & Co. say don’t work when markets are inactive.