If I'm right and the mortgages are largely trash, then the Geithner plan is a Rube Goldberg device for shifting inevitable losses from the banks to the Treasury, preserving the big banks and their incumbent management in all their dysfunctional glory. The cost will be continued vast over-capacity in banking, and a consequent weakening of the remaining, smaller, better- managed banks who didn't participate in the garbage-loan frenzy.

This much is clear, bank bailouts protect first and foremost the management, then the shareholders, then the holders of junior debt, then the holders of senior debt, then finally (and unnecessarily given FDIC insurance) the depositors.

Most economists teach a theoretical framework that has been shown to be fundamentally useless. -- James K. Galbraith