Mark-to-Market Marker

If you own a car you can go to Kelley Blue Book and figure out what your car is worth -- but can you actually sell it for that price. What if you have a hummer? In that case a guestimator comes in and figures out the fair market value of your car -- so if you are a rental company you do that every month and have what people call the "book value" -- that's what all your cars are worth -- because this is kind of silly the most businesses use deprecation (like a car is loosing 10% of it's value each year).

Now enter Jeff Skilling from Enron: What happens if after deprecating over a couple of years it turns out you did a good purchase and your car is worth more than you have on the books? Some lesser executive who came in after you might reap that windfall and get a gigantic bonus. That's where mark-to-market was invented to figure out what's going on right now and to prevent lesser executives from reaping fat bonuses.

Bonuses -- they are paid on Wall Street and so mark-to-market is an important measure there. But what happens if your boss looks at the dealer price to buy your car instead of the dealer price to sell it -- your bonus might be much smaller. So this is all up to interpretation and depneding on who you ask mark-to-market is a different value. In comes the marker (usually employed by one of the big-4-accounting firms) who determines a definite value based on the current political climate (so people with weatherman experience preferred). So one day Fanny Mac is capitalized ok and if you add up some different numbers they look bankrupt. One day your Hummer is worth $40K and the other $20K -- depending which dealer you are shopping it to and what new car you are gonna buy...