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Junior Mining Investors Robbed By Canadian Investment Banks



Junior Mining Investors Robbed By Canadian Investment Banks > Group's Default Discussion > Forbes View modes: 
  • Forbes

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    4 stars

    (Reuters) - U.S. President Barack Obama is repeating George W. Bush's worst market mistakes, Forbes Inc Chief Executive Steve Forbes wrote in the Wall Street Journal.

    "The most disastrous Bush policy that Mr. Obama is perpetuating ismark-to-market or 'fair value' accounting for banks, insurancecompanies and other financial institutions," Forbes wrote in an opinioncolumn.

    Under mark-to-market -- the revaluation of assets to their currentmarket value -- even non-suspect assets are being artificially knockeddown in value, Forbes wrote.

    "Banks and life insurance companies that have positive cash flows now find themselves in a death spiral," Forbes wrote.

    Forbes said that of the more than $700 billion that financialinstitutions had written off, almost all of it had been bookwritedowns, not actual cash losses.

    "Another horrific Bush policy that Mr. Obama has left untouched concerns short selling," Forbes wrote.

    Forbes said the U.S. Securities and Exchange Commission's removal in2007 of the so-called uptick rule, which held that investors could notshort a stock unless it went up in price, was responsible for anexplosion in market volatility.

    Obama should suspend mark-to-market accounting rules, restore theuptick rule, and enforce the prohibition against naked short-selling,Forbes wrote.

    (Reporting by Ajay Kamalakaran in Bangalore, editing by Will Waterman)


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  • RE: Forbes

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    Respectfully I think there more to this from what I gather.  You present a good point and certainly part of the story. Perhaps a little more  background and another chapter.
    If one uses a derivative to leverage anything, (mortgages are the resident evil of this era),  then it has vast upside potential and was the boon of the last several decades.  The birth of many an Oligarch. These very same derivatives were outlawed after the great depression because of their inherent risk.  US Congress re-enacted them in the 80's with the lobby of AGI et all.  The very same congressman who backed in re-instatement later took jobs with these companies after their terms were finished...
             So, back to topic.  Mark-to-market.  The money PAYED by the home-buyer for these mortgages is the source money to BE LEVERAGED by the derivatives.  If the mortgage owner defaults, then these equations amplify the effect to the downside in an equally massive way.  My point is, that It doesn't matter what we say the value of the property is, because the paying homeowner is the value, not the assessment of the home.  Mark-to market is simply a white lie to make the mistake of letting a cash poor person take on a nasty mortgage look less evil.  B

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