Look the problem is *bad loans* in which: 1 There is no liquid market to dump this loans. 2 The banks are forced to mark to market even though no market exists. So all we need is a simple accounting change - so that the companies can hold these loans to maturity - which is what the Paulson/Fed plan is all about! Why must the gov. hold to maturity if the banks can do the same thing with a simple accounting change. This is just another false flag operations similar to the Great Depression, 911, Gulf of Tonkin, etc. Some pigs are getting filthy rich off of this "crisis" - I don't know who right now but we will know soon.
As far as the CDS market - tell everyone to cover their positions then shut down that market. Make the contracts unenforceable by making them illegal in a few months. There are many other ways to hedge credit default risk.
Hehe - ROFL picture... Of course it is about preserving the wealth in the existing system - i.e de facto the "people on top". Look, it is sooooo simple: You guys have some incredibly rich people involved on Wall Street. The rescue package is to preserve this system, and not let the downfall of these riches and enriching-processes - intertwined with the rest of society - crumble to dust, because the fear is that it will gravely effect the rest of the system. Well, imagine removing a corrupting cancer that has been sucking you all dry for all you have got... It will affect other tissue somewhat for a while - but you eventually get better, and you can trust in that. Keeping the cancer is pretty dicey...
You see today's fake panic selloff. That's just another way to scare lawmakers into passing the bailout ASAP with no strings attached.