There is a lot of hard work going into what you are doing and proposing and attempting to push through, and it is appreciated. Fwiw, your 4 point proposal on resolving the banking mess reads a little out of context. The context of the proposal is better understood if readers read the prologue discussion with Dunkelberg and Kotok. So I recommend readers click through to the link.

“Kotok: Well, I have a bias here. I represent bond holders and my clients are bond holders. ”

Could this have something to do with his adherence to the systemic risk theory? Do people who don’t stand to make money from bailing out the creditors support the domino theory?

Once this guarantee is in place, the bankers must be prohibited from taking on more risk (either on a per-loan or systemic basis). The sovereign backstop should be used only to allow the banks to become functional again, not to load up on more risk and hand pawn it off on the taxpayers.

There is some question whether or not Switzerland has the sovereign resources to backstop their banks. What should a sovereign do in this case?

2) If we’re going to use the FDIC to suspend dividends, is this dividends on only the common, or on the common and preferreds?

If the FDIC will be granted such authority, then should not the FDIC also be able to set executive compensation for these banks as well as prohibit all acquisitions and mergers not previously announced, or make all M&A subject to FDIC review?

3) re: the resolution of the CDS market: either we have credit rating agencies or we have the CDS contract. One or the other, not both. AIG should be prohibited from writing any more CDS contracts, and should be forced to buy out as many contracts as economically possible before they go to default.

4) I have some thoughts about the “toxic” assets, but time does not permit me to write up the comments now.

I don’t think yowling will be an apt description of reaction to your solutions (which seem fairly reasonable to me). I guess this will shine some light on the counter-parties involved. Get ready for the fight of your life – whoever has the job of announcing this as a solution.

I’m also a little confused by the very last sentence on homeowners.

Also, what will happen if there’s ever an outcry about a majority of government capital sent to AIG ending up at GS, HF’s, and foreign institutions? “Blowing up” seems to be Myron’s specialty, by-the-way.

And I really want to know, what is so God-damned sacrosanct about MTM-accounting. It clearly does not work (unless one’s short the financial sector) as intended. Furthermore, FASB 157 is but one disaster in a series of accounting changes that have only poured gasoline onto the current systemic crisis. Aren’t these the very same geniuses that created rules to allow off-balance sheet structures to begin with? Then at the worst conceivable time, decided to require banks to reconsolidate all of it back onto their balance sheets?

Finally, I’m sure the general answer is going to be transparency solves all problems, or similar nonsense. If this is something that is a core-belief, then why aren’t we screaming for the US Government to play by the same GAAP rules in their accounting? I am so sick of the hypocrisy.

Disclaimer: I am agnostic when it comes to long or short. So, if you’ve made money as the system burned, good for you. I am, however, tired of the “debate” being focused on C and AIG. These clowns pushed the regulatory environment to the limit in every imaginable way. They are simply symptoms of a broken system. Tell me how to fix the system, not the crisis.