It is amazing to see that Wall Street is so willing to throw ideals of capitalism under the bus. We are being told that the problem with the current financial sector is that there is about a $1-3 trillion worth of "toxic assets" on their books. But "toxic assets" is only a fancy propaganda way of saying bad investments. The toxic assets are simply assets that the banks paid too much money for and now can't sell for a good price.
The foundation of capitalism was summed up by Adam Smith as "Everything is worth what its purchasers will pay for it". Yet America is being told to now ignore that principal. The market is willing to purchase these "toxic assets" at about 25 cents on the dollar. By definition that is their true value. The banks don't want to sell their "toxic assets," not because they honestly think they are worth more than 25 cents on the dollar because if they did, they would be forced to acknowledge that they are bankrupt.
The banks want us to ignore the principles of capitalism now that they are no longer working to their advantage. Their hope is that the government will allow itself to be ripped off by purchasing the "toxic assets" for more than they are worth (by the definition of free market economics: what the market is willing to pay for them). Or by insuring a pricing floor individuals willing to purchase the "toxic assets." People who buy the "toxic assets" would make a profit if the assets gained value, and the government would pay them if they lost value. This would only perpetuate the tails-you-win, heads-we-lose mentality which ruined the market.
The simple problem with the major banks is that they are already bankrupt, but neither the banks, Wall Street, Barack Obama, or Tim Geithner want to admit it. Any plan put forward to deal with the "toxic assets" without taking over the banks involves the American tax payers absorbing their trillions of dollars in losses for them. There is no such thing as a "toxic asset," only a bad investment. The banks made plenty on them, and now they want the government to buy them at twice their real value.