As I understand it, nobody knows the value of their assets. Not even themselves.
“As I understand it, nobody knows the value of their assets. Not even themselves.”
Exactly because there is no orderly market and only a market determines value. Plus if, err when, they get valued (i.e. forced into a market) they will be marked down. That is the problem that had to be fixed. Nobody knows what the assets are worth so nobody trades them so they become worthless and the balance sheet of the holder goes south and then nobody will do business with them.
Yes - when the housing market went south and foreclosures started piling up, the holders of these securities couldn't value them, as the mortgages had been sliced and diced so much in the process of turning them into securities. So now, nobody wants to take the risk of buying them - they have a market value of zero, even though the underlying value may be okay.