Floyd Norris has a go at bankers who want to dilute mark-to-market accounting this morning and he makes some good points.
However, just as an exercise, imagine what it would be like if all homeowners were forced to mark to market the value of their homes, and post cash collateral in cases of negative equity. Read more
Fitch’s downgrade of Berkshire Hathaway from triple-A to double-A plus status has been greeted in a fairly sanguine manner, with Barron’s pointing out that Warren Buffett’s borrowing costs “aren’t exactly going to skyrocket.” But I think it is a bit more serious than that.
Remember what happened to American International Group, after Fitch cut its triple-A rating in March 2005 (to be followed by Moody’s and Standard and Poor’s). This is a description of what subsequently occurred from the Washington Post’s series on AIG: Read more