Randy and Steve, I think that you might have misunderstood the change. It used to be that banks and companies carried those assets at "Costs" and since then, on a quarterly basis they are required to mark the assets to market. This is nice and dandy when there is a market (like stocks), but the banks are carrying a lot of real estate at costs and some of these costs are late 80' costs, which if marked to market would be disastrous. That is what is nice of course, since stocks in many portofolio(s?) have been there for years and marking to market (as long as the market is above 14,000 or so) would show a higher asset value, and real estate, until it is actually sold no one knows the real value, so it is still carried at astronomical costs. That is of course one of the major problems facing many banks, their books are hollow with inflated assets, and if the Nikkei stay under 14,000 on quarter closing day, they will not meet assets requirements (at least to operate internationally). That is one of the reasons that all stop will be pulled come late June to bring the Nikkei back above 15,000. It is my bet they will succeed, but not before we breach 15,000 here and now.
Zeev |
