Defaulting banks - where will it stop?

[Jan Klimkowski]

Rather than paying inflated prices to buy junk paper from a select list of (crony?) financial institions, so they can defer or avoid massive write-downs that would show they are insolvent, the feds ought to concentrate of topping up the FDIC, SIPC, PBGC and other existing insurance programs for what is certain to be an eventual collapse of hundreds of sick banks. Their equit and (non-depositor-based) debt will be wiped out as was WaMu's, but the acquiring banks will go right on with lending and managing the written-down assets. There is no need for the USG to become the owner of (vacant and crumbling) houses.

Jim - I agree. There have also been suggestions (not from MSM of course) that the $700 billion will essentially be used by Wall Street to massage its End of Quarter results, and indulge in one last spasm of looting and CEO bonuses at the expense of taxpayers, before the financial system actually blows.