Bailout - Tell Representatives to Suspend Mark to Market!
Would you like the Government to spend less money to bailout these banks. CALL, SEND E-MAIL, get a word to them to Stop the Bailout and Suspend the Mark to the Market clause of the Sarbanes-Oxley Act.
In Forbes magazine Brian S. Wesbury, explains a good plan to over-ride the current bailout proposal.
Basically, the mark to the market rule says you have to adjust the value of your holdings to the current market. This keeps large companies from keeping inflated market values of commodities from staying on their books. But since foreclosures on homes from the sub-prime loans caused the market value of homes to drop, the value of properties reclaimed dropped even though their value had not.
This might explain it better(from the article)…
Imagine if you had a $200,000 mortgage on a $300,000 house that you planned on living in for 20 years. But a neighbor, because of very special circumstances, had to sell his house for $150,000. Then, imagine if your banker said you had to mark to this “new market” and give the bank $80,000 in cash immediately (so you would have 20% down) or lose your home. Would this reflect reality? Not at all. Would this create chaos? Absolutely.
So, the proposal would be to STOP the BAILOUT and suspend the mark to market accounting rules for the sub-prime housing crisis. This would free up cash for these companies and allow them to work out their own problems. ALSO, allowing the current sub-prime loans home insurance coverage.
Here is a MP3of Dave Ramsey, Personal Financial Advisor, explaining further Brian S. Wesbury’s plan.
Please contact your representative, we don’t need Trillions added onto the national debt!
January 14th, 2009 at 6:09 pm
Stop this ‘mindless’ Bailout. Suspend Sarbanes-Oxley and let the businesses free up much needed cash on their own.