http://www.washingtonpost.com/wp-dyn/content/article/2008/09/30/AR2008093002298.html?hpid=topnews This is playing with financial fire here. If they change the rules that are in place now. Companies will inflate the value of declining assets on their books. Which could lead to another Enron scenerio. If they do this, it will come back to bite them on the azz.
It isn't exactly the same thing. While I am generally a fan of mark to market it only works when there is a market to mark to. Just because banks can't unload these bonds doesn't mean they are worthless. These bonds are backed by assets that have value far greater than what is being reported on the balance sheet. My fear as an investor would be that FAS 157 is forcing holders of these bonds to understate their value.
