JPMorgan ceo: 'We like mark-to-market accounting'

[Robbien]

Source: Forbes

WASHINGTON, March 11 (Reuters) - Jamie Dimon, chief executive of JPMorgan Chase & Co, in a speech at a U.S. Chamber of Commerce conference:

* Says 'we like mark-to-market accounting.'

* Says short-selling and the SEC move in 2007 to abolish the uptick rule may have contributed to credit crisis.

. . .

* Says U.S. needs a systemic regulator with broad authority.

* Says financial regulation should be done by product; hedge funds, private equity should be subject to more oversight.

* Says should fix securitization, put more 'skin in the game.'

* Says need to fix Basel II banking accord, including liquidity aspects of it.





Read more: http://www.forbes.com/feeds/afx/2009/03/11/afx6154961.html

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Freepers heads explode.

[napi21]

1. Mark to market accounting is a good thing. The problem right now is that

apparently nobody knows what the market price is, especially on houses. It's not realistic to mark every house in a neighborhood down to the price a few "foreclosures sold for. Most likely they sold at firesale pricing! What about houses in my neighborhood? No houses have been sold since 2005! Very few if any are ever put up for sale.

If & when the housing market ever reaches stability, you'll stop hearing all these people crying about mark to market.

[pnwmom]

3. But that seems to be an insurmountable problem. How can you do mark to market

accounting when virtually nothing is selling?

[Supersedeas]

5. what do you do when non-foreclosed houses aren't selling and banks aren't lending

[napi21]

9. Your question is exactly why they're aren't lending! Nobody knows

what those houses are worth. The banks don't wanty to guess because, pessimists that they are, would probably underestimate the vvalue thereby lowering asset value and making it more difficult to lend. It really is a big mess!

[underpants]

8. I understand that but don't you think realizing a gain on an asset you still hold is odd?

as I understand mark-to-market you can realize a gain before you even dispose of an asset. That is part of the reason suddenly everyone's balance sheet turned into fiction.

[Lasher]

2. No.

Regulation should first restore separation of financial services sectors.

[napi21]

4. I agree with you. They never should have let banks be brokers

and speculators, but that has nothing to do with m to m accounting. Banks & other businesses have done m to m accounting since I can remember. The problem now is that there's no way to accurately value the market. A big part of a banks assets were always the value of the homes where they held the mtgs. The value of the houses almost always went up, so it was a great deal for them & the consumer. NOW they lent money, some they never should have lent, and the value is down. They can't have the gravy train advantage of using the increases in the housing market to add to their balance sheet when things were good, and not accept the down side of the same thing.

[Lasher]

7. I've got no problem with M to M accounting either.

If I had to pick the root of the one biggest problem it would be unregulated derivative trading. Specifically, the sale of questionable loans at slightly below what the value was alleged to have been. That way the Bank loan broker took huge commissions and went off on their merry way to a new career opportunity. Lending institutions got off the hook by shifting accountability, i.e. selling the toxic loans to others. If the derivative trading had been prohibited or at least tightly regulated, the banks would still be holding the bag today. If that had been the expectation I assure you the lending institutions would have been much more careful when entering into contracts with loan applicants.

[Roland99]

11. Agreed. Banks should be a conservative profit-earner. Not pulling in 30-40% returns per year

They are supposed to be the SAFE investment but the love of money is the root of all evil and we've seen that in droves in the last several years.

[ozone_man]

6. Short selling had no affect on credit crisis.

The problem is that these toxic securities are worthless and the market knows that. Mark them close to zero, and you'll get the worth of Citibank and JP Morgan, about zero or below. The bailouts we give them are about all their worth at this point, sucked into a derivative black hole instantly. Just let them go bankrupt and take them over.

[Blue_Tires]

10. was i the only one who read this and first thought of

"mark" as the old-time con man's codeword for "sucker?"