“Mark to Market” accounting means that you show assets on your balance sheet at their market value.  Although the SEC and FASB (an organization that writes accounting rules) are resisting, the bright lights in Washingon are working to have the mark-to-market rule suspended:

Congressmen, banking lobbyists and companies including American International Group Inc. have urged the SEC to suspend fair-value accounting, saying it forces firms to report losses they never expect to incur. Federal Reserve Chairman Ben S. Bernanke and other proponents say removing the rule would erode confidence that firms are owning up to losses.

If we close our eyes, think real hard, and click our heels together three times, the toxic waste on our balance sheets will magically turn into ponies, and everybody gets one!

Representative Todd Tiahrt, a Kansas Republican, said the House probably would have approved a $700 billion bailout of financial companies yesterday had the legislation included a suspension of fair-value accounting. The House rejected the measure 228-205.

It would have passed “easily” if the rules had been suspended, Tiahrt, who opposed the legislation, said today in a Bloomberg Television interview. Read more »

DEVELOPING HARD: House GOPers gang up on Pelosi, kill bailout bill.  Wall Street FREAKS OUT, down somewhere between 500-700 points and going lower.  McCain looking for someone to hit, finding nobody as they have all fled the Geezerplex.  Decision may have been the right one on principle, but everybody’s 401(k) just took a massive whuppin’.

More details laters, as soon as sober analysis and non-panicked thinking retake hold.  Kthxbai.

[Soon as we can source this, somebody deserves a Medal of Freedom.]

Dear American:

I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude.

I am Ministry of the Treasury of the Republic of America. My country has had crisis that has caused the need for large transfer of funds of 800 billion dollars US. If you would assist me in this transfer, it would be most profitable to you.

Read more »

Live in the street, bitchez ...

The Republicans are going to fuck you in the ass again:

WASHINGTON – House Democrats say the idea of letting judges rewrite mortgages to help bankrupt homeowners avoid foreclosure won’t be a part of the $700 billion financial industry bailout.

Speaker Nancy Pelosi, D-Calif., told Democrats at a closed-door meeting Friday evening the provision would be a deal-breaker for Republicans who she has said must deliver substantial votes for the rescue plan. That’s according to several lawmakers who attended the session.

Nodoby could have predicted …

Mortgage Help for Bankrupt Homeowners Dropped [AP]

So that speculation play you made by buying up tons of WaMu stock in the past couple of weeks?  You might want to sit down for this:

Washington Mutual was closed by the U.S. government in by far the largest failure of a U.S. bank, and its banking assets were sold to JPMorgan Chase for $1.9 billion.

The rescue marks a historic step to clean up a U.S. financial system littered with toxic mortgage debt.

Washington Mutual, the largest U.S. savings and loan, was closed by the federal Office of Thrift Supervision, and the Federal Deposit Insurance Corp was named receiver. Customers should expect business as usual on Friday, the FDIC said.

Yes. Business as usual, except for the riots at WaMu branches tomorrow morning.

Of course: the FDIC is going to be on this mother, and everybody’s deposits will be safeish. But you remember what happened at Indymac branches? Amateur hour.

[Addendum: from the FDIC press release: “For all depositors and other customers of Washington Mutual Bank, this is simply a combination of two banks,” said FDIC Chairman Sheila C. Bair. “For bank customers, it will be a seamless transition. There will be no interruption in services and bank customers should expect business as usual come Friday morning.” No word on whether Ms. Bair said this while in a fetal crouch.]

If the details of the current crisis confuse you as much as it does the President, this online presentation walks you through the steps from mortgage application to pension-fund bankruptcy. Monopoly money not included.

The Subprime Primer [Google Docs, via RedManLaw]