Showing posts with label mark-to-market. Show all posts
Showing posts with label mark-to-market. Show all posts
Saturday, March 28, 2009
Very Good Explanations of Finance Basics Related to Current Crisis
0 comments Posted by PD at 2:40 PMHere are some of the good videos explaining the finance fundamentals and most of these explanations are related to the financial crisis that started in 2007.
Why "Fallout" for the financial crisis
Write-downs
Leveraging and de-leveraging
Toxic assets
Crisis explainer
Mark to market
Quantitative easing
Untangling credit default swaps (CDS)
Why "bad banks" might be a good thing
How credit cards became asset backed bonds
Over the counter over the top
Margin calls and the financial market's decline
A look inside hedge funds
Saturday, March 21, 2009
Recently I stumbled upon an article on fixing the toxic asset problems of the US banks by Lowell Bryan and Toos Daruvala (Directors of the NY McKinsey Office). The article is well argued but as suggested it is just a conversation starter. They are arguing that mark-to-market (also called fair value accounting) is not good in times of high volatility and they are suggesting that mark-to-model approach is the best suited in these times. But they somehow overlooking the fact that mark-to-model has its own flaws because everybody will be having their own model and there will be no standards. On top of that investors are not fools who will believe the models of these financial institutions and they will still be more inclined towards the mark-to market model since value of a asset is its price in the market not in some formulae.
The original article can be read below:
The original article can be read below:
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