[quote=Rich Toscano][quote=analyst]

The mortgage is $600K. While the mortgage owner sits idle, due to the suspension of mark-to-market rules, the mortgage owner is allowed to maintain the fiction that an asset worth $600K is owned.
[/quote]

Analyst, according to a longtime pigg who is very knowledgeable about the banking industry, that isn’t how it works… see this comment for his explanation:

http://piggington.com/shadow_inventory_the_flood_that_may_never_come#comment-117626

Rich[/quote]

Check the dates.

FASB revised the mark-to-market rules in the first week of April, 2009, to be effective for accounting periods ending after June 15, 2009.

The comment by davelj is dated May 8, 2009.

He was describing the situation before suspension of mark-to-market, not the situation that exists today.