The Meltdown Blog

On Bloomberg.com, Jonathan Weil is asking:

why don’t Obama, Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke force the banks to write down their troubled assets first, as a condition of government assistance? We can only speculate, because their explanations so far have made no sense.

He gives a few possible, though not very convincing reasons: Fear of panic, influence of failed banksters, lack of manpower and concludes:

Whatever the case, as long as the government refuses to remove the cancer of zombie banks from our financial system, there’s little hope the U.S. will return to robust economic growth anytime soon.

Kill the zombie banks, save the economy. However, what if the zombies are gone, but the nightmare continues? That's precisely what the Great Disruption is all about. Faced with the true magnitude of this crisis, wouldn't you try "to buy time" and hope "that an economic recovery somehow will materialize", too? Here's your answer, Mr. Weil.