So Much for Restoring Confidence...
So it appears the latest bailout bill would "allow" the SEC to suspend mark to market accounting for bank assets that are distressed. I posted on this below, but bring it up again because the more I think about it, the dumber the idea seems.
If this bailout is really about clearing out toxic debt and restoring confidence so that bankers will trade with one another again, why on earth would allow everyone to retreat to their bunkers to make up rosier valuations about their assumed-to-be-toxic holdings bolster counterparty confidence?
Is this about getting a job done or not, folks? Is it about holding your nose and cleaning up toxic assets, or is it about limping banks along with opaque balance sheets for a few more years until they finally succumb to the reality that those chopped-up HELOCs aren't worth spit in a down economy with record home-price drops?
Pull the bandage off all at once, or we'll run the risk of turning a sharp, painful, cleansing downturn into a decade-long slow bleed, as in Japan.