I hate math. Actually, it’s fear. I fear math. In school, I would fret over the possibility of encountering the dreaded “story problem”. You know the kind I’m talking about:
A train full of traveling salesmen leaves Union Station at 11:00 a.m. They all have 4 oz. martinis that they can refill from the fully stocked bar car. If the train travels at a constant rate of 65 miles per hour with each salesman drinking 2 martinis per hour, how drunk will they be when they reach Kansas City?
But my latest challenge is trying to make some sense of the current government “rescue plan”. Being a certified math-o-phobe, it’s been hard to know where to start. The numbers are too big to comprehend so I thought I’d start with something fundamental: understanding the much maligned accounting term “mark to market”. I waded through a series of confounding articles written by really smart people who I think spoke English but I’m not quite sure so I’ll call their language Accountlish for lack of a better term. I encountered catchy phrases that seemed oddly comical like “other-than-temporary-impairment” when talking about assets that have sharply declined due to giving people money who, say…. didn’t actually have jobs but wanted to buy that $400,000 house and a groovy, pearl white Range Rover Sport. Since I don’t have an Accountlish to English dictionary, I came up with a layman’s translation: this asset has taken a huge dump and isn’t worth the paper it’s written on, and by the way, it never will be again, thus the term other-than-temporary; as in permanent. Man, those Accountlish speakers are nothing if not creative with their speech. Forgive me if I’m unable to come up with a translation for sub-prime mortgage.
But back to the term mark-to-market to which I was becoming dangerously obsessed. Why, it’s not math at all! It’s magic! And who among us doesn’t like magic? Newt Gingrich must really love magic because he said on one of those highfalutin we-know-better-than-you news shows that we could return liquidity to our ailing banking system OVERNIGHT by simply getting rid of that little mark-to-market accounting nuisance. So, instead of making the banks adjust their current assets to reflect current market values (which really suck right now), they could just say this: yesterday our assets were really in the shitter but today, through the wonders of accounting magic, our books are healthy and strong. Damn! What on earth have we been so worried about?
Long live Accountlish and all who speak it!