MARK TO MARKET ACCOUNTING CHANGES

Could the wheels be coming off of the bear market rally already? It’s certainly possible, but I think it’s more likely that either late Monday…or certainly sometime on Tuesday we will begin to see the markets head higher again. Here’s why:

MARK TO MARKET ACCOUNTING CHANGES!

The rally will be dependent on the financials ability to continue in their recovery. The BIG positive for the financials is the proposed change in the mark-to-market rules.

Banks are holding their breath that the mark-to-market rule changes proposed by FASB under Congressional mandate will be approved, and it looks like they won't have to wait long. The rule changes would suspend the mark-to-market rule for "assets in distressed markets" and widen the definition of "temporary impairments" of troubled assets. This would allow banks to write-up the value of bad assets and remove the additional capital requirements the TARP/TALF were created to solve. This could eliminate the ne...