We at The Eeekonomist today call for banks to be forced to place realistic valuations on their assets, even if this means complete economic disaster.

At present bank balance sheets are completely and utterly butterly over inflated with worthless assets. In fact, that isn't completely accurate, most banks haven't a bleedin clue what 'assets' they have even got, let alone what those assets are worth, or if those 'assets' are in fact liabilities. Ho Hum.

The sub prime mortgage mess is one of the problems the media have picked up on probably because at least with mortgages they can put up a picture of a house. But sub prime is only a subset of a bigger canvas of a problem banks have been painting, sculpting and papier-mâchéing for many a year gone by.

For the problem is, in fact, that banks have been bundling up so called assets, like mortgages but also things like currency futures and pig bellies, into securitised 'bonds' which have an unknowable value.

Some banks might just as well have securitised dog poo, camel poo and cat poo. In fact, that might be infinitely much more preferable to the securitised mess in which it is unclear what is a liability and what is an asset. At least with shit you can spread it on your garden, what can you do with a $2 billion securitised currency spread portfolio in Mongolian dollars? (other than use the paper on which it is printed to help you spread the shit over your garden.)

We, this very day, say these 'assets' must now be revalued all of a sudden. If this means the bankruptcy of a number of financial institutions then so be it. If this means rioting in the streets then fine. If this means the deaths of a few of the weaker widows and orphans then, well, what can you do?

This paper is and always will be an advocate of the free market. Basket case banks, of which there are more than not today, should be allowed to not just go bust, but should be allowed to implode so violently that going bust would sound like a nice country walk.