Tuesday, September 30, 2008

Mark to Market

John Hinderaker writes:
As the economic crisis has deepened over the last several weeks, a number of knowledgeable people have told me that the simplest thing the government could do that would have a significant effect on the availability of credit is to ease the "mark to market" rule. A couple of hours ago, the SEC did just that.

It is amazing that a decision a simple as this could have that much of an effect, but it is possible due to the money multiplier effect. Hopefully this will be enough to ease the credit crunch.

Regardless of the size of the effect, it makes you wonder what took them so long to make such a simple change.