the.com/mark to market
your portfolio's diary, rewritten daily whether you like the plot or not.
means an accounting method that values an asset at its current market price instead of what you originally paid for it.
from born on commodity trading floors of the 19th century, formalized as futures exchanges needed daily proof that traders could cover their losses, not just promise to someday.
opposite methodhistorical cost, which freezes the price at purchase
enron connectionthey used it to book fantasy profits early
2008 crisisforced banks to write down assets nobody would buy
daily ritualfutures accounts settle gains and losses every close
for instance
enron 2001 — marked long-term energy contracts at wildly optimistic future prices
lehman brothers 2008 — mortgage assets marked down to near zero within months
cme futures margin — accounts adjusted daily so losers pay winners same day
fasb 157 — 2006 rule that standardized fair value accounting in the us