And, why doesn't Paulson just explain that the more we taxpayers buy, the less the banks will have to pay, exponentially less? In other words, for every dollar's worth we buy, the bank saves 10x that much in potential payouts.

Why won't Paulson just explain...?  A clue: per Bruce McF's diary, Solvency Crisis, the real problem is insolvency due to massive declines in the real estate assets underlying the entire financial structure, exacerbated by derivative bets leveraged at up to 30 to 1.  But the Fed only speaks in terms of "liquidity."  Afraid they will spook the troops?  Read his diary.

Then there is the awkward sense that the only people in the world more despised by the average taxpayer at the moment than are investment bankers are hedge fund operators.  Suggesting that we should bail out investment bankers so that hedge fund operators don't blow up is a political non starter.  It is much more likely that Congress would pass a law putting derivative contracts in the same position as that occupied by the contract between a prostitute and a john in most bible belt states.

Uh, has anyone analyzed that option?  If Cox can ban shorts until October 2....talk about bondage and degradation! (And who could have come up with these terms and names!?)

As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."