These days there are so many sentences to ponder

If you’re running an insolvent bank, and you get a slug of equity from
Treasury, your shareholders will thank you if you use that equity to
take some very large risks. If they pay off and you make lots of money,
then their shares are really worth something; if they fail and you lose
even more money, well, there was never really any money for them to
begin with anyway.

That’s Felix Salmon: read the whole thing.  Read this too.  Here is Megan McArdle on the pooling equilibrium.  Here is a good article on how Paulson "sold" his plan to the bankers.  And here are yet some more sentences to ponder:

So it in the end, we have what is basically an economic loan, but structured
in a way to game bank capital adequacy requirements. What strange times we live
in when Treasury and the Fed have to engineer a deal to circumvent their own
regulations.