Faded indeed.

Twas only the smallest of glimmers and extinguished now.

But, it is very strange, and the jouralist should have asked more questions.

For instance; nobody gets any poorer or richer from a write-down alone.

It's only a proposal, and there is no sense in the premature reaction.

I guess the proposal has the function of a scape-goat, a pretext for hiding real difficulties.

Your 'glimmer of hope' looks faded now: The proposal says in the same article to be withdrawn with apologies for distress caused to investors.

Here it is.

http://sfgate.bloomberg.com/SFChronicle/Story?docId=1376-L222IS07SXKY-6

Here is the Bloomberg article. See what you make of it. If you think I have completely miss-read this then please let me know and I will withdraw the post immediately.

Your question about why these two funds and not others are my questions also.

Yes, write-downs lessen the tax bill. But if you feel the risk from disorderly insolvencies is a greater risk to you government's finances then it makes sense to force write downs.

I agree on the foreclosures, and also on the need for re-pricing of assets. But if the funds and banks just WON'T re-price their assets what choice is there but to do it for them? Brutal, but what choice?

I agree – we do want and must have our money back now. Except that much of it has gone – gone to the bond buyers in return for the cash to bail out the banks. That money we cannot easily get back, nor get out of those contracts save by debt repudiation.

Dire, dangerous but in the end may be our last resort.

As I say, if I have miss-understood this, please let me know.

Both for accounting and taxwise, the value of a property is its cost minus depreciation. Certainly real values and tax values may differ, but then it is usually the owners who wants tax authorities to accept bigger write-offs. I cannot see what in the world could prompt legislators to impose bigger write-offs than the owner (and his auditor) deems appropriate. Write-offs usually lessen the tax bill.

10% sounds arbitrary, and, if annually, way too much.

I see little hope in this. It's a hallucination.

We want to see more forclosures and repricing of assets. For that to happen, somehow the liquidity that so generously have been throwed at the banks must be withdrawn. We want our money back now, Mr. Banker.