"In my opinion what has gone wrong in the last several years is that a lot of people who don't understand mortgage credit risk have been taking mortgage credit risk. And Paulson and Bernanke, for all their knowledge (and they know a lot more about a lot of things than I do) do not understand mortgage credit risk, and nobody involved in pushing this plan understands what they're getting into, and how difficult it will be to value these mortgage securities. They all just assume that they can hire some technical person, someone like what I was ten or fifteen years ago, to take care of it, and as the person who would be tasked for doing this, I'd say it's not possible to do it. The securities are too complex and they're too sensitive to potential scenarios for house prices. The core task of this bailout is going to be valuing these mortgage securities, and that is an impossible task, and the bailout is bound to fail for that reason."

-- Arnold Kling