Wolf whistling

Martin Wolf's piece in yesterday's FT is not the first where he disagrees vehemently with such venerables as Ben Bernanke or Hank Paulson, but rarely so uncompromisingly opposed. My answer to his blog pages is as follows:
I rarely disagree with Martin Wolf directly and/or all comments above - but, Martin, you are 180 degrees wrong, for three reasons to do with valuation of the toxic assets, cost to taxpayers, and the essence of Paulson's strategy.
Ben Bernanke and Hank Paulson have both stated clearly that taxpayers will profit from the $700bn bailout, and I technically know precisely as a banking risk professional that they are totally correct to say so. In fact, I can go further and say there is no room for doubt here. When Ben Barnanke says that if the Treasury buys assets at a price “close to the hold-to-maturity price” rather than current “firesale” price there will be still be “substantial benefits”, he is not wrong, and over the credit cycle he and Paulson will make a handsome profit for the public accounts, and arguably better them than the hedge funds garnering rich pickings. Again, I know with absolute confidence that Bernanke and Paulson are both right in their strategy. Banks will mark their portfolios to the new higher hold-to-maturity prices and the assets are warehoused (quarantined) in or off the trading books, and taxpayers will be safeguarded by the US Treasury paying below cash flow value of the securities - a win-win solution for taxpayers and banks.
The crisis is not merely the fault of the firms involved or how well they are risk regulated; it is also a problem of the quality of the highly fragmented OTC markets for structured products and credit derivatives etc. Paulson has the opportunity now to create a new market, a properly regulated exchange, whereby structured products may far more reliably form a useful and valuable source of bank funding.
And then, we may not again see sudden massive flows of hundreds of $ billions in and out of alternative wholesale interbank funding sources that destroyed confidence and dried up liquidity.
The benefit of displacing short term mark to market valuations with hold to maturity valuations should instantly recover $ hundreds of billions lost in asset writedowns and contribute considerably to banks' ability to help everyone ride out the underlying economic recession periods, which frankly were coming anyway regardless of whatever the banks or governments did or did not do.