It’s amazing what accounts for a market rally. Are we starting to see a pattern here? While the MSM still insists on using the Dow Jones Industrial Average in taking the temperature of public policy, it’s clear that the “markets” are not fond of being held down. Is the Dow reaching over 8000 for the first time in almost two months an economic indicator, or simply a characteristic of an increasingly fickle market?
From a report today in The New York Times:
The board that sets United States accounting standards is giving companies more leeway when valuing assets, a potential lift to battered banks’ balance sheets. The independent Financial Accounting Standards Board voted to adopt guidelines under the so-called mark-to-market accounting rules, which require companies to value assets at prices reflecting current market conditions…The changes could reduce the losses banks have been forced to report as the values of their mortgage-backed securities have crumbled. The decision will allow the assets to be valued at what they would go for in an “orderly” sale, as opposed to a forced or distressed sale. The new guidelines will apply to the second quarter that began this month. The mark-to-market rules have forced banks to take steep write-downs on some assets, especially securities tied to high-risk subprime mortgages.
The Dow was up over 300 points at the publishing of this post. See article link here.