If Treasury Secretary Henry Paulson had only taken Sam Zell’s advice, the financial markets might not be in their current mess.

That was one view the always-opinionated Chicago investor expressed Tuesday morning at a real estate industry conference, where he offered his take on how the markets got into trouble and how they might get out.

Mr. Zell assigned much of the blame to politicians and U.S. accounting rules that have forced financial firms to write down the value of their real-estate mortgage assets, which stressed balance sheets and sent the firms on a desperate search for capital.

The billionaire financier said he called Mr. Paulson nine months ago, telling him the rules needed to be suspended, so lenders would have more discretion to assign a value to the assets.

“Without fair-value accounting, this whole situation would have never reached this level,” Mr. Zell said, adding later, “You took a big problem and turned it into a gargantuan problem.”

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