This nugget from the FT is troubling, to say the least:

London equities fell on Tuesday over fresh fears about the extent of toxic assets in the financial sector.

The FTSE 100 closed 63 points lower at 3,930.52, a loss of 1.6 per cent with much of the overall loss accounted for by banks, after reports the International Monetary Fund was poised to predict toxic debts held by institutions could reach $4,000bn, up from earlier forecasts of $2,400bn. [emphasis added.]

Among other things, it makes you realize all the talk about the relative merits of gaming the Geithner plan is a little beside the point: Even if every last cent goes toward removing toxic assets and recapitalizing the banks, the effort--which maxes out at $1 trillion--is still going to fall a couple trillion dollars short.

--Noam Scheiber