FASB caves on Mark to Market

In a move that will likely impact accounting standards world-wide, the U.S. Financial Accounting Standards Board acquiesced to the Congress and relaxed mark to market accounting standards. While this is in many ways a very technical issue, its essence is that banks need not write down many of the toxic assets that are at the heart of the current crisis.
Investors are understandably not happy, as this in effect reduces transparency in the very areas where it is most needed. But it allows banks to maintain healthier balance sheets (though surely markets are not fooled by this). In short, it postpones the day of reckoning. As the New York Times' Floyd Norris puts it

If mark-to-market accounting is to blame for the current financial crisis, then the National Weather Service is to blame for Hurricane Katrina; if it hadn’t told us the hurricane hit New Orleans, the city would never have flooded.

Next time you hear a banker denounce mark-to-market rules, ask if he runs his business that way. Will he offer you a mortgage loan based on what you think your home should be worth, which you can repay only if you make a lot more money than anyone will pay you? If so, then perhaps the bank should be able to use “Alice in Wonderland” accounting on its own books.

I am currently trading a twelve year old compact car, in marginal condition, that I originally paid $8500 for. So can I demand, and receive, this amount now?