Well, I'm no expert, but I think this solution is wrong. If we wipe out the shareholders of the banks, pension funds in addition to other investors take big hits. That doesn't sound like a good solution to me. The big mistake he makes is to forget that there are houses behind all these supposedly toxic assets. That means that nearly none of them will ever lose all value. His worst case scenario, which he says is more likely than the best case scenario, is way off. There is no best and worst case. There are millions of middle cases which he really has no idea about. It is not true, as he says, that if there was any chance that the assets could be worth $100 that investors would value it at more than $30. You might like to think so, but that doesn't make it so. The problem isn't that the assets are valueless. It's that nobody knows exactly what they are worth. And whatever else he says, the idea of the govt throwing money at this is to create jobs and get credit moving. It's mostly a giveaway from go. So, to criticize that this isn't a good deal for govt is missing the point. The point is that govt is sacrificing now for an improved economy tomorrow. While the govt may recover some or all of this money, that is not the purpose of making the investment.

If you weren't scared after Geithner's TARP 1 have a review of TARP 2.