Jamie Dimon "Unplugged"

JP Morgan

JP Morgan's (NYSE:JPM) CEO talks about banking, mark-to-market accounting, compensation and regulation. Dimon is rapidly becoming the most lucid and trusted banker in America and the reputation is deserved. 

The speech:

Dimon is right when he talks about mark-to-market accounting. It is a good idea taken to the extreme and that always ends up being a bad idea. It's widespread use for all assets type will (has) lead to insane valuation volatility. That leads to people like Berkshire's (NYSE:BRK.A) Warren Buffett liking it due to the "opportunity it presents us". Meaning, mark-to-market produces the extreme pricing inefficiency Buffett enjoys so much.

That cannot be the goal of the system of any accounting methodology. It ought to seek to find the true value of the asset, not simply discount it to whatever the lowest seller will let something go for in times of distress. It, in its essence, is lazy accounting.


WallStNation.comThanks for visiting WallStNation.com, to assist your investing research try using our Search (click to access) or review the list of Tickers (click to access) that link directly to articles related to the given stock/security.

To Browse our Most Recent Stories (click here)

Share WallStNation.com Content

Share this article with others, WallStNation.com is the Independent Wall Street Newspaper. Thanks for Reading!

Daily Market Summary

Please Review the WallStNation.com Disclaimer and remember that information provided by our site is at the investor's sole financial risk. Please Review for more Details