March 9, 2009 marked the first day of the current bull market run for US stocks. Although the reasons for the five year and counting bull market run are varied, most economists would cite some combination of the following factors: slowly improving numbers for Gross Domestic Product, sluggish but consistent job creation, increased capital expenditures by companies, a burgeoning energy revitalization that is also spurring the return of manufacturing due to steady and relatively inexpensive natural gas, and the continued advances of technology.
As we look back over the last five years, we should celebrate the bi-partisan hearings of the Committee on Financial Services. Please see below a quote from the Market Watch Report dated April 2, 2009 that details committee hearings from March 9 & 12, 2009. I believe this was the turning point that stabilized capital markets, and reversed the stranglehold that FASB guidelines had imposed the year before. Those guidelines had unnecessarily created a liquidity crisis for American businesses and their creditors. The reversal of FASB guidelines allowed businesses to value their assets, not at a daily “fire-sale” price, but rather at a more reasonable value, taking into account other factors, including income generating capability. This allowed lenders and businesses to operate more effectively, which prevented an even more destructive and compounding downward spiral for businesses, and would have produced a much deeper bottom for the US and world economy.
“Legislative pressure by lawmakers on FASB pinnacled on March 12 at a congressional hearing focusing on mark to market accounting. Lawmakers pressed FASB’s Herz, who testified before the committee, to produce new audit guidance within three weeks.”
Oral, Ronald. “FASB approves more mark-to-market flexibility.” Market Watch. The Wall Street Journal, 2 April 2009. Web. 10 March 2014. http://www.marketwatch.com/story/fasb-approves-more-mark-market-flexibility