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Last week I had lunch with Marty Schiffman, who told me that “If I live 1,000 years, I will never understand that accounting rule! It’s dishonest!” Marty was, of course, talking about the application of mark to market accounting rules by major financial institutions. Marty Schiffman is not the “average” man on the street; he is the head of the Real Estate Group at Carl Marks and is a senior finance professional. In short, he knows what he is talking about.  As I have written in several previous blog articles, mark to market accounting is perhaps the dumbest and most misleading set of accounting rules ever promulgated by FASB. In two earlier blogs (here and here) I discussed some of the more inane provisions of these two accounting statements, including the ability of companies to manufacture earnings by pretending that they don’t have to repay their debts. At lunch, Marty told me that bad financial reporting causes a loss of confidence, and that he doesn’t understand why mark to market accounting isn’t transparent. He explained that as the result of the rule, investors practically have to have a PhD in forensic accounting in order to figure out corporate earnings changes in a 10Q.  Marty got really animated (and loud) when he told me that it was dishonest for financial institutions to mark their liabilities to market and manufacture earnings by pretending they aren’t going to pay back their debts.