Thursday, September 18, 2008

Double standards

During the Asian Financial Crisis in 1998, the currency and stock markets in South East Asia dropped sharply. It was caused by short selling and aggravated by the accounting rule of "mark to market". The hedge funds made a lot of money by pressing down the markets. The global fund managers said that the weaknesses were due to "lack of transparency" and other factors.

This time, the financial crisis originated from the markets in USA. To address these problems, the following actions are being taken:

> restrict short selling
> use of Government funds to support the market

The following measures are being considered:
> suspend "mark to market"
> suspend the credit rating

These measures were frowned up during the Asian Financial crisis. Now they are being considered. This is a world of double standards.
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4 comments:

Jill said...

I also read that they are going to allow financial institutions to use goodwill as available capital for calculating ratios.

That is just ridiculous. Goodwill is an asset with no value and can't be "marked to market". Besides, all the goodwill that is around today, if marked to market would be $0.

September 18, 2008 4:16 PM
ym said...

becoz now it's their tennis partners, church friends, lamboghini-club buddies in trouble..

but the fundamental fact remains - the global banking system is a huge pyramid scheme..

September 18, 2008 4:20 PM
zhummmeng said...

What is good for the gander is not good for the goose...

September 18, 2008 8:19 PM
T__T said...

Double standard is always around. We can only hope what they do now will not set us up for a bigger fall.

September 18, 2008 10:30 PM

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