If you lend someone $1,000,000 to buy a house which costs $1,000,000 and then they are unable to pay back the loan you have a problem. But wait you can seize the house and sell it for $1,000,000 and get your money back. But what happens in the meantime if the value of the house has fallen to $800,000? Of course you have lost $200,000.
Multiply that by 50,000,000 and everyone has a problem (not to mention commercial property and infrastructure assets). The change to international accounting standards with its 'mark to market' provisions has helped to revel the truth about the value of many company's assets and in the long term this is a good thing.
This situation is not new, in fact it has happened over and over again. A good read is "Extraordinary Popular Delusions and the Madness of Crowds" by Charles Mackay. Written in ~1840 but just as relevant today.
beware of negative downrampers, page-10
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