There are reports that the SEC is planning to give banks "flexibility" on mark-to-market accounting rules. It may even suspend mark to market rules. What on earth could that mean?

Let's go to the cows.

You have two cows.

You write down on a piece of paper that the cows are worth $100 each.

You notice the cows are on fire.

Your paper still says $100.

Fortunately, mark to market has been suspended so you don't have to pay attention to the fire.

Your cows are dead from fire.

Your paper still says $100.

Fortunately, mark to market has been suspended so you don't have to pay attention to the dead cows.

You notice that you aren't getting as much milk as expected, so you adjust the model and mark the cows down to $98. You are confident, however, that the dislocated stream of milk revenue will quickly revert to expectations.

You need to borrow some money so you ask investors for a loan against the cows. The investors tell you the cows are dead, and you already owe them $200 dollars you borrowed to buy them in the first place. You show them the paper that says the cows are worth $98 each.

They light your paper on fire.

You ask the government to buy the dead cows at $98 each.

The government holds meetings all weekend and finally comes up with a plan to inject $45 dollars into your cattle ranch. In exchange, the government gets a right to milk generated from the cows at some point in the future. It expects you'll buy a new cow with the $45.

You have two dead cows, $45 and $200 in debt to your investors. You have no plans to buy new cows.

Economic Models explained with cows

SOCIALISM:
You have 2 cows and you give one to your neighbour.

COMMUNISM:
You have 2 cows; the Government takes both and gives you some milk.

FASCISM:
You have 2 cows; the Government takes both and sells you some milk.

NAZISM:
You have 2 cows. The Government takes both and shoots you.

BUREAUCRATISM:
You have 2 cows; the Government takes both, shoots one, milks the
other and throws the milk away...

TRADITIONAL CAPITALISM:
You have two cows. You sell one and buy a bull. Your herd multiplies,
and the economy grows. You sell them and retire on the income.

AN AMERICAN CORPORATION:
You have two cows. You sell one, and force the other to produce the
Milk of four cows. Later, you hire a consultant to analyse why the cow
dropped dead.

A JAPANESE CORPORATION:
You have two cows. You redesign them so they are one-tenth the size of
an ordinary cow and produce twenty times the milk. You then create a
clever cow cartoon image called Cowkimon and market them worldwide.

A GERMAN CORPORATION:
You have two cows. You re-engineer them so they live for 100 years, eat
once a month, and milk themselves.

AN ITALIAN CORPORATION:
You have two cows, but you don't know where they are. You break for
lunch.

A RUSSIAN CORPORATION:
You have two cows. You count them and learn you have five cows. You
count them again and learn you have 42 cows. You count them again and
learn you have 2 cows. You stop counting cows and open another bottle
of vodka.

A SWISS CORPORATION:
You have 5000 cows, none of which belong to you. You charge others for
storing them.

A FRENCH CORPORATION:
You have two cows. You go on strike because you want three cows.

A CHINESE CORPORATION:
You have two cows. You have 300 people milking them. You claim full
employment, high bovine productivity, and arrest the newsman who
reported the numbers.

AN INDIAN CORPORATION:
You have two cows. You worship them.

A BRITISH CORPORATION:
You have two cows. Both are mad.

IRAQI CORPORATION:
Everyone thinks you have lots of cows. You tell them that you have
none. No one believes you and they bomb you. You still have no cows, but at
least now you are part of a Democracy....

SURREALISM:
Surrealism: You have two giraffes. The government requires you to take
harmonica lessons.

HONG KONG CAPITALISM:
You have 2 cows. You sell 3 of them to your publicly listed company,
using letters of credit opened by your brother-in-law at the bank,
then execute a debt/equity swap with an associated general offer so that
you get all 4 cows back, with a tax deduction for keeping 5 cows. The milk
rights of 6 cows are transferred via a Panamanian intermediary to a
Cayman Islands company secretly owned by the majority shareholder, who
sells the rights to all 7 cows' milk back to the listed company and
proceeds from the sale are deferred. The annual report says that the
company owns 8 cows, with an option on one more.
Meanwhile, you kill the 2 cows because the feng shui is bad.

NEW ZEALAND CORPORATION:
You have 2 cows. That one on the left is kinda cute.

AUSTRALIAN CORPORATION:
You have 2 cows. Business seems pretty good. You close the office and
go down the pub to celebrate.

hahahaaa i actually laughed out loud for the nazi one.
nice find