Just one thought I had today related to your comment, Unwired, is that a lot of the "losses" that have occured in banks are paper losses, i.e. they are accounting entries forced by mark to market accounting.

If you own a mortgage pool and it gets sold down in the market to 20c on the $ (because of the blind panic that is going on) you have to take the 80c loss, but in reality you might well recover, say, 70c if you hold the instrument long term. Change the accounting rules and these "losses" go away or are very much reduced.

Now if the banks are having their capital made with government money based on mark to market rules, if the rules were then changed all of sudden these institutions would start to look quite well capitalised as they could reduce the provisions they made against these assets. I heard that this rule change may happen.

Part of the bail out in the UK is that banks return to 2007 landing levels for mortgages and loans to business, i.e. peak bubble lending rates. Consumers are going to have credit rammed down their throats just in time for Christmas.