An amazing story from the New York Times. Trying to figure out what the price of worthless debt is? The institution owning it says 97 cents on the dollar, S&P’s “model” says it’s worth 87 cents on the dollar, but (in my best Bob Barker impression) the ACTUAL RETAIL PRICE is…

38 cents!

Yes, the last traded price for that particular bond was 38 cents, less than half of what both the institution and the S&P model say it was… you don’t have to be Treasury Secretary to realize that banks holding these assets at inflated values are simply kidding themselves.

As CEOs talk up their books, even the “clean” ones like GS and JPM, don’t forget that since they are not forced to mark to market, we are not getting full disclosure. Stay away.

To read about the financial problems we are in, read here.

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