How To Trade Tomorrow's Mark-to-Market Vote

As you know, tomorrow the Financial Accounting Standards Board, or FASB, will vote on loosening mark-to-market standards for banks. If approved, banks will have more flexibility to set their own values for certain mortgages, corporate loans and consumer loans that are plaguing their balance sheets. The new values will likely be much higher than the 'market' value.

Themis Trading's Joe Saluzzi had some thoughts on the mark-to-market vote. Joe said, "The market is begging for a relaxing of the mark to market standards. If they do relax, the market will trade higher tomorrow. But the question is still; IS this the right thing to do? Big debate raging still on this. If they keep mark to market as is, banks will get destroyed tomorrow since a good part of this rally was built on mark to market easing." Joe also had a crash course on the mark-to-market - "Mark-to-Market for dummies".

Today, the Journal had an article suggesting that if the measure is approved it would completely undermine the U.S. Treasury's newest plan to take impaired assets off bank's balance sheets with the help of private investors.

Investment banks like Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS) would be affected by the ruling, as well as money-center banks like Bank of America (NYSE: BAC), JP Morgan (NYSE: JPM), Citigroup (NYSE: C) and Wells Fargo (NYSE: WFC).

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