Mark to Market Fun

Clearly the news this week on JPMorgan and their "mark to market" problem is not fun for them.  I wrote about the fallacy of Mark to Market back on March 4, 2009 so if you need a tutorial click here.  Shortly after my posting, the US Government relaxed Mark to Market rules and the 2009 to 2012 stock market boom fueled by 0% interest rates from the Federal Reserve ("free money") took off. 

Now MTM is back in the news -- it is very inconvenient to have report the value of your holdings based on what someone else would buy them for.  That is why Financial Institutions prefer Mark to Model... They model what they would be worth under certain conditions (mostly good conditions) and then put the financial instruments on their books at that price.  This is the imaginary number system of high finance. 

I offer some additions to Mark to Market and Mark to Model (please add your thoughts in the comments):

Mark to Mood: Valuation of the security is based on the way your feel.

Mark to Macadamia:  Valuation is based on some Nut's idea of what it is worth.

Mark to Madness: See Mark to Macadamia.

Mark to Mackerel:  Better believe in this valuation or you will be "sleeping with the fishes".

Mark to Mafia: See Mark to Mackerel.

Mark to Magic:  My fingers never left my hand while I was appraising the value.

Mark to Machete: If you really knew what this was worth you would cut off my "vitals"

Mark to Maalox:  If you really knew what this was worth you would need a big dose.

Mark to Malfeasance:  Practice only allowed at too-big-to-fail institutions.

Mark to Macadam:  Used when the value is nose diving into the tarmac.

Mark to Macumba: Requires experience in voodoo economics to use properly.

Mark to Maelstrom: Valuation based on one or more perfect storms.

Mark to Marijuana / Martini: I think this one is obvious.

Mark to Marx: Valuation is determined by a central government.

Mark to Madam: Valuation based on prior year earnings of all wall street hookers.

Mark to Morpheus:  (also known as Mark to Matrix) Take red pill and the true valuation will become clearer.

Mark to Mariachi:  The valuation is higher in South of the US Border.

Mark to Mallard: Sell this security and "duck".

And lastly my personal favorite...

Mark to Mansfield: Securities mostly likely to chart a "double top" pattern.