Worst Bank

The idea of the new Fed under Obama, and early in his Presidency, taking in bad assets from banks is back on the table.

"Outgoing Treasury secretary Hank Paulson offered support for such a move, telling reporters “a lot of work has been done on an aggregator bank” and other ways of “dealing with illiquid assets”."

It took a while to get here but this was the original purpose for TARP and it might work. Bad assets are obviously bad. Bad, totally illiquid assets are crippling. Just don't expect to hear the words "banker" and "bonus" in the same sentence any time soon. These guys were so wrong, and are getting so much help that their comp structure is going to be under heavy scrutiny for years. And for good reason.