
A FREE alternative to the taxpayer funded Fed bailout - dcancel
http://www1.daveramsey.com/etc/fed_bailout/economic_cleanup_10887.htmlc
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cperciva
This sounds like a nice solution -- wave a magic wand called "changing the
accounting rules", and suddenly everybody will have lots of assets against
which to borrow money. Too bad it wouldn't work.

This is exactly what Japan tried: Banks held loans which everybody knew were
never going to be paid back, and pretended that they were still worth
something. Instead of having a wave of bankruptcies, Japan had a decade where
banks weren't willing to loan money to each other because they knew that they
couldn't trust each other's balance sheets.

Now, if Sarbanes-Oxley and mark-to-market had never been put into place, it's
entirely possible that this financial crisis would have been avoided -- nobody
would have ever realized just how bad the situation was. But now that
everybody knows that the situation is bad, allowing companies to overvalue
their assets won't do anything to help; and might even make the situation
worse, since allowing insolvent banks to fudge their accounting would make it
impossible to identify the banks which _aren't_ insolvent.

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lowkey
Mark to market is what the Japanese banks tried in the 1990. There is a reason
the Japanese call it the 'lost' decade.

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gills
Allowing fraud to continue is not an alternative.

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donniefitz2
Awesome to see a Dave Ramsey article. He rocks.

