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When Is "Price Discovery" Not Price Discovery?

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Hidden in the middle of a Wall Street Journal article on vulture investors is a small observation that suggests, perhaps unwittingly, that the Treasury might be on the eve of complicity in one of the largest cases of accounting fraud in recent memory.

Other opportunistic investors, though, say they likely will stick to the sidelines for now. They are skeptical that the government's purchase of distressed assets will accurately establish what they are worth. So far, there have been few transactions, despite the desperation of banks to sell, because of disagreements over pricing. (Emphasis ours).

If the Treasury buys assets at inflated prices and that permits banks to mark-to-the-Treasury-model, well... you get the idea.

Vulture Funds Plan to Buy Assets Ahead of Bailout