We don't know exactly why the stock market turned around yesterday, but it sure looks like FASB's surrender on mark-to-market accounting had a role. At about 1:30 pm central time, the Dow was down 78 points and the S&P 500 was down 9.6 points. But, at the end of the trading day, just a few hours later, the Dow closed down just 3 points and the S&P 500 was up 0.5 points.
The FASB news did not hit the WSJ or Bloomberg until after the market closed, but the decision was announced sometime around mid-day. It's not a perfect match on a minute-by-minute basis, but is sure seems too coincidental to ignore.
The announcement of a House hearing, in Barney Frank's Committee, to address mark-to-market accounting, back on March 9, 2009 was the bottom of the stock market and the recession. So, yesterday's stock market action would not be the first time good news on mark-to-market accounting led to a turnaround in stocks.
Click here to view the Bloomberg article.
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