One of the accounting rules that has created this “crisis” is called mark to market. What that means is that securities are to be valued at the price they could be sold for at market. It allows a company to recognize that its investments have appreciated, or sadly, depreciated in value.

The credit market got tied up when major players refused to buy at prices they viewed as too low. If you cannot sell a security, it has zero value. Suddenly, banks and other institutions held massive amounts of mortgage securities with no apparent value.

As has been demonstrated here, they do have a value, but the refusal to buy and sell at those values shut the credit market down.

Companies went bankrupt due to their losses in securities marked to market.

The SEC is “clarifying” the mark to market rules, to allow some leeway. The primary change will affect securities intended to be held, so that the vagaries of the market day by day do not necessarily affect securities held for years.

This is a sensible modification. Securities based on mortgages have a value, despite the refusal of the players to make a market. That will change in a month, and no company should be penalized by accounting rules for the momentary oddities of the marketplace.

Read this. Send it to all your friends. Send it to your enemies and even strangers. This is the absolute truth about the Congress. No bull.

Steve Schippert posts at Wizbang:

We are witnessing a failure in government. Our Congress cannot work together to provide an immediate fix to a problem it created in the first place: forcing the American financial sector to extend mortgages to those who were high risk borrowers in order to champion to the American people that more minorities own homes than ever. That worked well under a booming economy. But when the natural cycle of economics turned downward, fear dismissed became reality unavoidable. The house of cards came tumbling down.

And even still, amid all the haggling and fighting going on in Congress over how to shore up the financial cash crisis, not a word is mentioned about changing the counter-intuitive practices forced upon mortgage lenders in the first place. In this respect, it’s not unlike how Congress and the White House chose to address illegal immigration: by trying to deal with those already here first rather than initially addressing the cause: the influx of illegals that continues to flow unabated.

Make no mistake, if we wake to Black Monday this week, the responsibility lies squarely upon Congress and the electorate which has put them there, not our banks. Our banks’ hands were forced by mandates from Washington, not their boardrooms.

And here we are. With a Congress so polarized that they are incapable of working together.

We elected them. We pay their salaries. If they mess this up, each and every one ought to be voted out of office in November. Complete turnover. Fire their asses. You and I both know that if we were even half this bad at our own jobs, we would have lost them a long time ago.

Fire Congress!