Replies to post #236283 on Mr Cooper Group Inc fka COOP

[steved_45]

I'm more outraged by the SEC not dropping the FASB mark-to-market rule when it clearly didn't apply if there is no "fair market" to value assets on the books at fmv. Like one of those CDS articles I posted said, companies didn't want to buy up banks out of fear of the unfavorable accounting changes. I interpret that to mean that those gov't regulations created fear instead of creating confidence and therefore the SEC failed.

See point 7 in the contents: http://en.wikipedia.org/wiki/Mark-to-market_accounting#Effect_on_subprime_crisis_and_Emergency_Economic_Stabilization_Act_of_2008
Notice that after the bailout, on October 10th, FASB released info on how banks should fairly value assets when the market is inactive.

I feel that if mark-to-market would have been suspended earlier then most banks wouldn't have needed to get so much TARP money. No doubt WaMu would have still been an on going concern 4 days later when TARP was effected and would have benefited like C, BAC, and WFC did. My opinion that TARP stabilized asset prices is proven by the rapid repayment of TARP injections by the major banks.

Mark-to-market creates a never-ending downward spiral forcing banks to lend less to cover their "market" losses which in turn decreases supply of money available for RE loans and consequently, eventually decreases overall demand of homes. Low demand for homes decreases prices, which decreases fmv of loans on banks books causing them to shore up more money, etc, etc. Rinse and Repeat. I think you understand. This is why I'm also a believer in TARP unlike most investors (even though it was sold to congress completely different than how it was effected).

So I feel that the SEC put WaMu and others in a place that made FDIC crap their pants and jump the gun too early. So while Bair's pants were bulging in the back, Dimon's pants were bulging in the ...(you get the point).

Steve