[Philo-Junius]

This continues until ALL the bad paper is disclosed and written down.

Billions can go down the same rathole—it won’t help until all the banks believe they really know what each other is worth.

[ninonitti]

This continues until ALL the bad paper is disclosed and written down

This is lost on the powers that be who continue to believe that the problem can be fixed by pouring money on it.

[JasonC]

If the government seizes banks at gunpoint, all the financial capital in existence isn't worth a dime.

There isn't a right answer to what things are worth. Instead, every time the treasury tries to protect itself at the expense of financiers, 10 dollars disappear for every dollar they grab. 3 of those disappearing dollars belonged to the treasury. You can keep that up clear to zero, no problem at all.

It changes when the government decides it wants its citizens to have money, instead of itself. Then both will.