Sunday, October 5, 2008

Everyone will know banks are lying.

Bailout Bill Passed, So What Happens Now?

Pretending Is Not Reality What happens now is that pretending does not alter reality. I can pretend all I want that Madame Merriweather's Mud Hut is worth $1 trillion and I can pretend my pet rock is worth the same. The reality (sorry Madame), is that neither is worth the book value I place on them. Suspension of the mark to market rules will accomplish nothing but further mistrust of banks and bank stocks. Everyone will know banks are lying. No one will know by how much. What we still know is that Citigroup alone holds $1 trillion in off balance sheet SIVs.

Posted by malct @ 12:56 PM (554 views)
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2 thoughts on “Everyone will know banks are lying.

  • gardeniadotnet says:

    Intriguingly, even the experts can’t seem to agree whether we’re in for a period of hyperinflation, deflation or a combination of the two.

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  • landofconfusion says:

    I must admit that I’m beginning to lean towards (super)inflation. Governments are running out of money, banks are being bailed out left, right and center and to top it all off, Brown has said that we’re all going to see a drop in living standards (except him and Bliar, of course).

    Oh, and the BoE looks set to cut interest rates.

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