YUP, PAULSON'S PLAN BLOWS

I didn't think buying pieces of the Big Shitpile at market values would help the banks and this snippet from the Times seems to indicate that I and others are correct:

Big Financiers Start Lobbying for Wider Aid
By JENNY ANDERSON, VIKAS BAJAJ and LESLIE WAYNE
Published: September 21, 2008
NY Times

Wall Street banks are lobbying to temporarily suspend certain accounting rules to avoid taking big losses on the assets they sell to Treasury, which would weaken them further.

This is why Paul Krugman noted that paying fair market value won't help:

The Treasury plan, by contrast, looks like an attempt to restore confidence in the financial system — that is, convince creditors of troubled institutions that everything’s OK — simply by buying assets off these institutions. This will only work if the prices Treasury pays are much higher than current market prices; that, in turn, can only be true either if this is mainly a liquidity problem — which seems doubtful — or if Treasury is going to be paying a huge premium, in effect throwing taxpayers’ money at the financial world.