This is one of, if not the THE most disturbing developments of this bailout debacle and it coming from the republican side. Why would anyone encourage a value other than market value be put on a financial statement? If so, who would get to determine it? Just like you should not setup a system that encourages high-risk loans to high-risk borrowers, you should not setup a system to hide fair market value to fool investors. I'm going to have trouble voting for anyone who supports such a concept. In fairness, I have not seen where McCain is blatantly supporting this...but I am disappointed with him for even suggesting this idea.
http://en.wikipedia.org/wiki/Mark_to_market
http://online.wsj.com/article/SB122290736164696507.html?mod=googlenews_wsj
Accounting firms and investors groups put up a united front Wednesday in opposition to the changes. "Suspending fair value accounting during these challenging economic times would deprive investors of critical financial information when it is needed most," said the Council of Institutional Investors, Center for Audit Quality and CFA Institute in a joint statement. "It would not help solve our economic difficulties."
Some members of Congress say easing the mark-to-market rules could help taxpayers avoid billions of dollars in potential costs by allowing banks to avoid booking losses on securities that might have value after the credit-market crisis has passed.
"Onerous mark-to-market rules for certain financial assets that have no market value have worsened the credit crisis, and changing them has been a priority for House Republicans," House Republican leader Rep. John Boehner said in a statement.
Republican presidential candidate John McCain, in a statement, praised the SEC clarification, saying, "There is serious concern that these accounting rules are worsening the credit crunch, making it difficult for small businesses to stay afloat and squeezing family budgets."
In March -- the month the industry began to lobby for the change -- Sen. McCain called for a meeting of accounting professionals to study whether the accounting method was "magnifying problems in the financial markets."
In my humble opinion, we need to be magnifying them and not hiding them and pretending they do not exist.