DU Financial Experts, can you evaluate this article, please?

[OmahaBlueDog]

http://www.minyanville.com/articles/Paulson-bank-bailout-treasury-cdo-price/index/a/19299/from/yahoo

Perhaps I'm reading too much into this, or reading this wrong:

<<Rather than revoke mark-to-market rules, the Feds should institute a price control regime for the wounded mortgage-backed securities (MBS) currently held by banks, etc>>

Wasn't "mark-to-market" the so-called "aggressive accounting" technique that screwed Enron investors?

[OmahaBlueDog]

1. I'm hoping maybe there's an expert in the house now

...I know -- you're all watching baseball ;-)

[kenny blankenship]

2. There was a reform of the mark-to-market rules following the Enron-Arthur Andersen scandal

(Not a financial expert at all, and I can't really evaluate the merits of the this person's proposal)

Andy Fastow of Enron was cooking the books by entering the "expected" profit of Enron operations and ventures at optimistic, theoretical valuation instead of taking into account losses and likely losses. Congress passed some kind of legislation around 2002 on Enron-style abuse of the mark-to-market accounting rules soon after the collapse of Enron. Either that bill or another one like it having to do with accounting reforms was signed in 2006. So "mark-to-market" doesn't mean what it meant, or what it could be interpreted to mean by fraudsters, in the year 2000.

The newer, more stringent mark-to-market accounting standard makes it difficult and contentious to do any sort of accounting with the MBS securities likely to be bought up under the bailout bill, because in the present environment these mortage backed securities have no bids. They'll bring money over the long haul since most of the mortgages that go into the securitized bundle are performing, but since no one is buying these MBS instruments or anything like them right now, they have a "fair value" of zero.