Banks know which are depressed ... and which are worthless.

We keep hearing in the press that "the problem" is that no one know what anything is really worth. I've suspected that's not entirely true. But this is saying it's 100% not true.

If it really is possible to figure out about what the "real" values are, doesn't the whole issue go away? What I mean by that is, the problem of not knowing what it's worth goes away.

The underlying problem that banks have assets on their books at much higher values than they're really worth is still there. But the game of chicken goes away.