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Originally Posted by pgardn
Well damn.
I would have bought them.
I never really understood how people could say their
home was worth X amount, unless there is a buyer
willing to buy it at X amount. In my simplistic way
of thinking, something is worth what people are willing
to pay for it. And if there are no buyers at certain moment
in time, then it is worth nothing at that moment in time.
Even though it may be worth a lot more
at another moment in time.
To all those holding on to Grandma's favorite
quilt I apoligize. I know it is worth something to
her.
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I agree but what if you don't have to sell? Say your the bank that did things the right way, made the right loans and the performance of your asset is great. According to mark to market you need to devalue your asset even though you don't want to sell, don't need to sell it, and the performance of the asset is fine. Ultimately you are forced because you don't have the cash any more to back it due to devaluation and since your competitors had to sell their assets at a discount with little demand then it is devalued further and sold at a bigger discount and the cycle continues......