Where Did Your Toxic Assets Go, Mr. Bank...

That's the question for an accounting group that sets up standards for companies reporting financial information. They have a standard that determines how to account for assets on companies books. Well today they decided to give companies more room when valuing these assets, and this could give a big lift to those banks we have grown to hate.

The group is called the Financial Accounting Standards Board and they are supposed to be independent when establishing these rules. But it appears they may have caved to the pressures of Congress and Wall Street when it came to political pressure around the somewhat unpopular rule.

The rule, called mark-to-market, is supposed to increase transparency for investors because we can see what these assets are valued by today's standards. But the problem some critics say is what happens when the market tanks (like it has been) and their is NO VALUE. Well, what happens is the financial statements of the banks become horrible.

My Opinion - Keep the rule because it provides transparency and uncovers assets that are beginning to decline in value. But as the rule has been adjusted I won't cry I will just buy and that is the BANKS for a short period of time. The assets are still bad on the banks books the difference is now they don't have to tell is they are!!!!


BUY: Direxion Shares Financial Bull 3x Ticker: (FAS) - This gives you 3x the returns for the banks going up. But just buy a little cause it will take you for a crazy ride!

$700 Billion - Wall Street Hits the Jackpot

Yeah Baby!!! That's what I always imagined I would scream if I hit the jackpot in Vegas or if I won the lottery and now that is what Wall Street is screaming. $700 Billion is the amount that Wall Street is looking to claim for their winnings. Now they won't call it winnings but let's try to look at how this situation looks from my perspective. I have sat back, trying to not judge how the situation is being handled and I just want to determine what this means for me as an investor.



As an investor, the first thing that I would say is that a $700B move like this tells me that the Henry Paulson, head of the Treasury department is serious about this issue. It would signal that he believes that liquidity is drying up for financial insitutions and this bailout package allows them to right their balance sheets. My next observation is that if these companies are allowed to remove these toxic assets from their balance sheets they will see a few quarters where these assets will need to be marked down...if Mark to Market Accounting still exists and then they would have sparkling balance sheets with no direction to go but up. This leads to my next conclusion that the best investment for the short term will be the Financial Sector and you will see that through an addition to my STOCK TRACKER PORTFOLIO through the exchange traded fund, UYG.

Since I wrote this post much has changed and I will write from the prespective of Main Street, however this was written from the view of what this bill means to me as an investor.