Really interesting watching this in March 2023, after the SVB Collapse. These concepts are the same and effected SVB and other regional banks. Very helpful explaination!
Great explanation, Man. It's not easy nowadays to explain using just a whiteboard, but you did it very well. And the conclusion just cracked me up! Cheers!
i dont mean to be off topic but does anybody know of a trick to log back into an instagram account..? I was dumb forgot the password. I love any help you can give me
@Koa Kendall i really appreciate your reply. I found the site through google and I'm in the hacking process now. I see it takes quite some time so I will get back to you later with my results.
Enron was doing something very different, I think. Enron was recording future earnings as present earnings. It’s as if the owner of the toy store has a contract to sell 1 MD in games over the next 20 years and decides to record 20 million as his income for the year. It only makes sense if your bonus is tied to earnings and you are a crook.
Yes, Enron used Mark to Market but the numbers they came up with were whatever they wanted them to be and apparently no one ever really questioned them or was able to disprove them. So how would anyone know if the same thing isn't happening now?
And this is exactly why homeowners were allowed to remain in their homes for 2+ years years without making a payment. Because the moment the bank foreclosed, they would have to book the loss. Meanwhile these mortgage “receivables” were considered assets eventhough the homeowners were not paying.
Thank you. If Mark is a verb, meaning action, would you say the meaning of the term can be likened to "indicate, record the price to be the fair market value" ?
Enron marked deals to market, not assets. Basically they had a forward curve with a bid offer spread and would typically mark the difference between mid market and bids' for a sale and and the oppiste for a purchase. They originally had a reserve and would only book arond 75% of the deals. The balance was realized on an accrual basis. The original concept was that you could only mark financial items of less than a year in duration. Enron's folly was they got the government regulators to allow MtM on deals up to 10 years.
Hey man great video. Can you explain this in the Feds case? When marking to market, would the Feds balance sheet go to a loss on periods when they hold say a lot of treasury securitues that they bought at lower rates and are not much higher
only those securities held "available-for-sale" are marked to market because its the intention of the security holder to sell the long-term asset in the market as though the security is liquidity as money.
I think you're missing a major point regarding mark to market and the crisis: in the derivatives world (both listed and OTC, each in its own way) the margin requirements require mark to market accounting on a daily basis. that means that a collapse in a certain market (say, MBSs) exposes the long side of the transaction to margin calls, and the settling of these calls, or, alternatively, the liquidation of the positions, is the massive realized lose.
i agree the dissemination of knowledge is a GREAT thing.. i wish more of it would happen.. unfortunatly this is not the type of knowledge that would help the people from not becoming suckers. that kind of knowledge is kept close between a small group.. and unfortunatly for you.. you arent allowed into those boardroom meetings.
Oddly enough, liquor sales have increased. The local Pepsi bottling plant I visited this month said they're seeing record sales as well. I guess everyone's doing mixers!
Good as far as it goes it its limited scope, but it contained no real explanation of systemic effects or alternatives. Effectively I am none the wiser about the implications of Mark to Market and accountancy standards generally.
im not mad at the guy in the video.. he actually seems like an alright guy.. i would prob have a drink and some laughs with the guy..the problem is the there are alot of great people sleepwalkin into oblivion. yes everything looks just fine on paper and writen in numbers. you could justify anything looking at those type of numbers.
You'd think you would actually support somebody explaining the workings of the market to the average person. The market is not going anywhere for good or bad. At least with videos like these people don't get taken for suckers when they inevitably have to deal with Wall Street or other world markets. The dissemination of knowledge is actually a good thing don't you think?
All the chap in the video is doing is trying to explain why the market is having the reaction that it is, how on earth you justify your baseless insults towards him in your first post is beyond me. Go yell at CEO's who are giving themselves multimillion dollar bonuses after ruining their companies if you are feeling anger that need venting. I know the comment system is flawed in that it does not let us correct typos, its just funny sometimes when an ad hom attack like yours backfires.
Really interesting watching this in March 2023, after the SVB Collapse. These concepts are the same and effected SVB and other regional banks. Very helpful explaination!
I just watched a video on Enron and it's mind blowing the similarities.
Great explanation, Man. It's not easy nowadays to explain using just a whiteboard, but you did it very well. And the conclusion just cracked me up! Cheers!
Hey, Jim looks just like Dennis, the Shadow Banking guy lol. In all seriousness, great video series! Will refer my clients to it.
Damn, I need a drink! lol. These videos are by far the best presentations I have ever seen.
i dont mean to be off topic but does anybody know of a trick to log back into an instagram account..?
I was dumb forgot the password. I love any help you can give me
@Jameson Jaden instablaster =)
@Koa Kendall i really appreciate your reply. I found the site through google and I'm in the hacking process now.
I see it takes quite some time so I will get back to you later with my results.
@Koa Kendall It did the trick and I finally got access to my account again. I am so happy:D
Thank you so much you really help me out !
@Jameson Jaden you are welcome :D
Enron was doing something very different, I think. Enron was recording future earnings as present earnings. It’s as if the owner of the toy store has a contract to sell 1 MD in games over the next 20 years and decides to record 20 million as his income for the year. It only makes sense if your bonus is tied to earnings and you are a crook.
Yes, Enron used Mark to Market but the numbers they came up with were whatever they wanted them to be and apparently no one ever really questioned them or was able to disprove them. So how would anyone know if the same thing isn't happening now?
@@ChucksterJax they were cooking the books
And this is exactly why homeowners were allowed to remain in their homes for 2+ years years without making a payment. Because the moment the bank foreclosed, they would have to book the loss. Meanwhile these mortgage “receivables” were considered assets eventhough the homeowners were not paying.
still watching this almost 13 years after the upload !
Thank you. If Mark is a verb, meaning action, would you say the meaning of the term can be likened to "indicate, record the price to be the fair market value" ?
Enron marked deals to market, not assets. Basically they had a forward curve with a bid offer spread and would typically mark the difference between mid market and bids' for a sale and and the oppiste for a purchase. They originally had a reserve and would only book arond 75% of the deals. The balance was realized on an accrual basis. The original concept was that you could only mark financial items of less than a year in duration. Enron's folly was they got the government regulators to allow MtM on deals up to 10 years.
Hey man great video. Can you explain this in the Feds case? When marking to market, would the Feds balance sheet go to a loss on periods when they hold say a lot of treasury securitues that they bought at lower rates and are not much higher
Beautiful explanation, thank you so much!
Great explanation. Thank You!
only those securities held "available-for-sale" are marked to market because its the intention of the security holder to sell the long-term asset in the market as though the security is liquidity as money.
Really great professor
I think you're missing a major point regarding mark to market and the crisis: in the derivatives world (both listed and OTC, each in its own way) the margin requirements require mark to market accounting on a daily basis. that means that a collapse in a certain market (say, MBSs) exposes the long side of the transaction to margin calls, and the settling of these calls, or, alternatively, the liquidation of the positions, is the massive realized lose.
i agree the dissemination of knowledge is a GREAT thing.. i wish more of it would happen.. unfortunatly this is not the type of knowledge that would help the people from not becoming suckers. that kind of knowledge is kept close between a small group.. and unfortunatly for you.. you arent allowed into those boardroom meetings.
I keep seeing mark to market on my stock trading account. I don't think I understand what that is
thank you sir!
Thanks a lot.. I can now relate it with MTM report related to forex trades for clients !
Oddly enough, liquor sales have increased. The local Pepsi bottling plant I visited this month said they're seeing record sales as well. I guess everyone's doing mixers!
Was the bankers name Mr. Jipsome?
great job! keep them coming!
well done....again!
I remember mark to market helped Enron create a bubble that burst....
thanks sir, you just made it simple for me
Brilliant explanations!
Help me in my study of Enron. Thank you.
They were claiming unrealised profit?
Work the same for crypto?
so is this good for citigroup?
Nicely explained
if governments allow assets to not be marked to mark it will destroy market. it's obvious.
Good as far as it goes it its limited scope, but it contained no real explanation of systemic effects or alternatives. Effectively I am none the wiser about the implications of Mark to Market and accountancy standards generally.
great video
and eventually the only rule is, supply vs demand
im not mad at the guy in the video.. he actually seems like an alright guy.. i would prob have a drink and some laughs with the guy..the problem is the there are alot of great people sleepwalkin into oblivion. yes everything looks just fine on paper and writen in numbers. you could justify anything looking at those type of numbers.
Enron and GE brought me here
Sounds like stocktake
i dont think so.. if people just did what was the right thing to do.. there would be a need for regulations.
Robert de Niro!
lol
You talking to me?
Enron!
I'd have a drink regardless! =)
You'd think you would actually support somebody explaining the workings of the market to the average person. The market is not going anywhere for good or bad. At least with videos like these people don't get taken for suckers when they inevitably have to deal with Wall Street or other world markets. The dissemination of knowledge is actually a good thing don't you think?
that is what kenny boy lay from enron was doing
You just repeated Rick Santelli's rant of 2009. How we go back to where we started. Time to abondon ship.
Who’s here because of Enron
John Frantz I am, precisely.
at 6:38.....this guy is wrong.
You have to is the key word.
Gme
All the chap in the video is doing is trying to explain why the market is having the reaction that it is, how on earth you justify your baseless insults towards him in your first post is beyond me.
Go yell at CEO's who are giving themselves multimillion dollar bonuses after ruining their companies if you are feeling anger that need venting.
I know the comment system is flawed in that it does not let us correct typos, its just funny sometimes when an ad hom attack like yours backfires.