A LOT OF MONEY

(h/t Atrios)

I haven't kept up with WriteDown World. The last time I checked, I think the banks had written off about $160 billion of the Big ShitPile. For the 100 banks Bloomberg looked at, it's now up to $344 billion, with over $100 billion more still to come. Thanks to the miracle of GAAP, the banks can keep some of these losses off the revenue side of their balance sheets and hide them in the long-term investment portion. In theory, that means that some of the Big ShitPile may turn out to be worth face value in the future but that is highly unlikely. A more troubling issue is that banks can now use in-house evaluation models to assess the worth of securities they hold. That gives them a LOT of freedom to pick the model they find most convenient.