With Dow Stocks Like Baseball Scores, Time for Goose Gossage?

As baseball competition accelerated in the second half of the 20th century, teams moved from using pitchers to work complete games to employing specialists to protect close leads. Baseball changed its way of doing business, evidenced by its adoption of the “save” rule.

According to the Federal Reserve, ABS issuer debt outstanding grew from $2.2 trillion in 2003 to $4.5 trillion in 2007. Meanwhile, corporate equities and mutual funds grew too, but more slowly. The shift toward opaque ABS investment, relative to transparent public company investment, has now made prices of Dow stocks with too much ABS exposure look like baseball scores.

Meanwhile, Mark Haines of CNBC suggests today that the financial league find an alternative to repealing mark-to-market accounting. The SEC staff had a similar idea in December.

If baseball is precedent, updating the rules of the game — the industry standard with which participants must comply — could help. Do financial players understand that their league’s dead ball era ended with the rise of ABS? Who will be the market’s Jerome Holtzman?