Any possibility of marking to market went out the window with the so-called bailouts; neither ledgers nor inventory will be cleared. It’s the same strategy Japan used: hang on to all the toxic waste & stall out indefinitely. Only worse: the reserve fiat currency of the world (for a bit longer, at least) & massive expansion of it.

Truth is, there never was a market for this junk. It was a sweetheart game for insiders & their satellites, appendages. It was a ponzi scamthat only the most politically connected survived – so far, at least. Unprecedented malfeasance or cold calculation, depending what part of the chain is scrutinized. But then, fiat currency, the foundation for all this, is a pseudo-market too….

IF we had had exchange trading for these instruments this would have been less likely to happen.

I do think a more applicable mark-to-market period could have been invoked – once a quarter or two – as that would have been much more appropriate for the lifespan of the asset and the small number of buyers and sellers in that marketplace.

Likewise, these assets aren’t worth zero – or even only 50% of their cash flows – so they are currently marked at artificially low numbers.

Limit down moves, locked for however long, present a vacuum, too; the buggy-whip market gets smaller. Assets (should) be marked to market – & accounting rules should insist on it, as well. If the other side does not materialize, oh well, the stuff goes to dollar store inventory, or the scrap-yard. Good money – more accurately, worse money after bad money will only make the inevitable pain & suffering worse.

A market exists, or it doesn’t – counterfeit money can’t create it, or even prop it up, but it can kill it. These convulsions are likely death throes….