NOT FACING THE MUSIC

Let's get something clear right now: too many banks are holding paper that is worth MUCH less than face value. There is no way to cure our economic mess by pretending that we can somehow fix these banks by paying inflated prices for bad ets. The only real solution is to follow Sweden's approach and nationalize the biggest banks like Citi and start over. This will minimize the inevitable losses and stop the insane practice (e.g. TARP I) of throwing good money after bad.

For some details, see Yves Smith, Paul Krugman and Christopher Hayes.