Six More Weeks Of ... ?

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... winter, according to Punxsutawney Phil, who also proclaimed the nearby Pittsburgh Steelers world champions after their Super Bowl victory Sunday night.

But, can prescient Punxsutawney Phil tell us how much longer the economic downturn will last?

He is not the only one accused of keeping his head in the ground too long - as noted in a front page article in by Vikas Bajaj and Stephen Labaton in the Feb. 2 New York Times, entitled, Risks Are Vast In Revaluation of Bad Assets - which discussess expectations the U.S. government may announce formation of a 'bad bank' to aquire - according to the NYT writers - up to $1 trillion or more of toxic assets from banks - one of the thorniest issues of debate is the price at which the government would buy such assets.

Former SEC chief accountant Lynn Turner is quoted in the NYT article saying, "To date, the banks have stuck their heads in the sand, and demanded that they be paid the price of good apples for bad apples."

However, writers Bajaj and Labaton also note, "A frequent refrain in Washington and on Wall Street is that there are no current market prices for toxic securities... Big banks and other owners of mortgage investments have argued that the low market prices reflect fire sale prices."

There are definitely two sides (if not more) to the fair value (mark-to-market) pricing debate, as detailed further in the NYT article and other recent articles, shown here.

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