From BronteCapital, via the indispensable Mark Thoma, this was an excellent post, excerpt:
…it is simply illogical to believe that
(a). The banks are largely insolvent,
(b). The right or actual government policy is guarantee big banks (ie no more Lehmans) and
(c). The subsidy to the Geithner Funds is a real problem.
If both (a) and (b) applied the Geithner Fund MUST save the government money – so the subsidy is irrelevant.