What is mark-to-fantasy?
On a personal level it is pretending and telling the world your house is worth what it was 2 years ago rather than realizing the loss and facing the reality that you lost 10% of you home's value. Accepting the value as what your home will sell for on the market today is called marking the value of your home to the market (mark to market). To do otherwise is to mark the value of your home to what ever fantasy number you pick (mark to fantasy).
Brad Miller and his ilk are allowing the banks to pretend their assets are valued at what they were 2 years ago. Remember that when you see a bank post profits. And remember that you as an individual would never be allowed to do the same. Some of us are more equal than others as far as Brad Miller is concerned.
Strategies like this do not allow nations to move forward from financial dislocation. The hit has to be taken.
Bill Black had this to say on the topic:
“…It also means we are following a Japanese type strategy of hiding the losses and we know what that produces - a lost decade, which is now two lost decades. Your listeners and viewers if they are stock types, look at the Nikkei. It lost 75% in nominal terms and has stayed that way for 20 years. I real terms it lost 85% of its value. This is a really stupid strategy. And it's ours.”
Video at the link.
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