Another busy day at work - for which I am very thankful - so little time to do much here. I noted yesterday that credit card debt was coming on as an increasing problem. It appears I was not off mark. Credit card defaults at a 20 year high - go figure. And one of the worst default rates is for Citigroup. Seriously people, did this company do any risk analysis? Did they check credit ratings of anyone? And, nonetheless, we are propping up such a "stellar" organization with many billions of dollars.
http://www.calculatedriskblog.com/2009/03/credit-card-defaults-at-20-year-high.html
Mark to Make Believe
The FASB is contemplating allowing more relaxed mark-to-market rules, which is something that Buffet has called for.
http://www.calculatedriskblog.com/2009/03/fasb-to-propose-changes-to-mark-to.html
Now I will not retread all the traffic on how mark-to-market was great on the way up so we need to live with it on the way down. I fundamentally see how it is ineffective in these times. I also see how most major financial institutions are not properly doing the existing mark-to-market. Does anyone really believe the toxic assets are valued properly on most corporate books? These things are not being properly valued, which is another reason why we are not getting to a bottom. Until the valuations get real, we will not get there.
http://www.nakedcapitalism.com/2009/03/now-its-official-public-private.html
Disclosures: None
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