A news report here says that the Financial Accounting Standards Board (FASB) caved in to SEC pressure and will “suspend the mark-to-market rules to take account of extreme market conditions. Institutions will be able to use their own estimates of an asset’s worth instead.”

This idiotic move will drive the prices of financial stocks down and carry the whole market down. The credit markets cannot function without transparency. Lenders have to know the real values of the assets of borrowers. If the borrowers can fabricate figures, they lack all credibility. Thus, FASB has undermined even the creditworthy borrowers with this move. Lenders will now be even more reluctant to extend credit, and interbank borrowing will lock up even more. The exchange economy is almost entirely a credit economy. Without credit, it will grind to a halt. We are looking at an imminent DEEP depression.