Sarbanes-Oxley is more involved then just valuations. It is aimed at assuring the financial statements are accurate and there isn't three card monty going on
=================================================
Sarbanes-Oxley is the root of most of this problem. The mortgage backed bonds these investment firms own are currently unmarketable. Because of this Sarbanes-Oxley requires that they have a book value of $0. This makes the investment bank under capitalized and severly limits their ability to operate.
Problem is the bonds are not worthless - they just aren't liquid. Some of the mortagages that are used to back them have gone bad and no one wants to buy them without know exactly how many have gone bust. But they are still worth at least 90% of their face value or more. All you have to do is hold them to maturity. If they would relax or eliminate the valuation rule of Sarbanes and let the banks revalue them to a "best estimate" (like 90%) the bank crisis goes away over night.
The government bailout will mean the government buys the bonds and holds them to maturity or unbundles the mortgages and sells the good ones and liquidates the bad ones. That's why the government has no idea what the real cost to the tax payers will be in the end but it won't be 700 billion. There's even a chance the government could make money on this (if you eliminate the time value of money).
What I posted above has nothing to do with the bailout of Freddie and Fannie. That one will cost hundreds of billions in outright fraud and graft and thousands of people (lenders and borrowers alike for falsified loan documents) should be headed for prison.
We sell tractor parts! We have the parts you need to repair your tractor - the right parts. Our low prices and years of research make us your best choice when you need parts. Shop Online Today. [ About Us ]
Today's Featured Article - Farmall 460: That's My Girl - by LeAnn R. Ralph. How many sounds can you think of that are as familiar to you as your own breathing? What about the hum of your refrigerator? Or the thump of your clothes dryer? Maybe the engine of your car? You hear those sounds every day, and you don't think much about them, do you. I can think of a few common, ordinary sounds in my daily life, too.
... [Read Article]
Latest Ad:
1964 I-H 140 tractor with cultivators and sidedresser. Starts and runs good. Asking 2650. CALL RON AT 502-319-1952
[More Ads]
All Rights Reserved. Reproduction of any part of this website, including design and content, without written permission is strictly prohibited. Trade Marks and Trade Names contained and used in this Website are those of others, and are used in this Website in a descriptive sense to refer to the products of others. Use of this Web site constitutes acceptance of our User Agreement and Privacy Policy
TRADEMARK DISCLAIMER: Tradenames and Trademarks referred to within Yesterday's Tractor Co. products and within the Yesterday's Tractor Co. websites are the property of their respective trademark holders. None of these trademark holders are affiliated with Yesterday's Tractor Co., our products, or our website nor are we sponsored by them. John Deere and its logos are the registered trademarks of the John Deere Corporation. Agco, Agco Allis, White, Massey Ferguson and their logos are the registered trademarks of AGCO Corporation. Case, Case-IH, Farmall, International Harvester, New Holland and their logos are registered trademarks of CNH Global N.V.
