Warren Buffet and Market Myths

I do not claim to be a market guru, but I do claim to know of someone who is: Warren Buffet, easily the smartist man on Wall Street, perhaps because he stays as far away from Wall Street as possible. One of the richest men in the world, and certainly the greatest investor in modern history, he lives a comparatively modest life in Omaha, Nebraska. I found these words of his enlightening:
Many institutions that publicly report precise market values for their holdings or CDOs and CMOs are in truth reporting fiction. They are marking to model rather than marking to market. The recent meltdown in much of the debt market, moreover, has transformed this process into marking to myth.

Because many of these institutions are highly leveraged, the difference between "model" and "market" could deliver a huge whack to shareholders' equity. Indeed, for a few institutions, the difference in valuations is the difference between what purports to be robust health and insolvency. For these institutions, pinning down market values would not be difficult: They should simply sell 5% of all the large positions they hold. That kind of sale would establish a true value, though one still higher, no doubt, than would be realized for 100% of an oversized and illiquid holding.

In one way, I'm sympathetic to the institutional reluctance to face the music. I'd give a lot to mark my weight to "model" rather than to "market."