The Financial Times wonders intelligently in an editorial, as do others, whether Treasury should be involved at all. Here some useful context is provided:

That question is made more acute by the fact that both Hank Paulson, the Treasury secretary, and Robert Steel, the under-secretary for domestic finance, are alumni of Goldman Sachs. Goldman does not particularly stand to benefit if the plan works - that dubious honour is Citigroup’s - but it is intended to help out Wall Street.

Provided the plan works, the Treasury’s involvement is justified. Governments can legitimately co-ordinate a private sector response when it would be hard for banks to act alone. As long as investors are not being cajoled to buy assets at unrealistic prices, and the Treasury offers no guarantees, Mr Paulson is within his rights to act.

That does not mean the plan itself is sound. Even some of the banks involved wonder whether Citigroup, which could contribute a quarter of the assets in the new fund, is being bailed out of its lending errors with a murky form of innovative off-balance sheet financing. That question applies to every bank that will kick in assets.

Readers wanting to know exactly how much exposure Citigroup has need only read this WSJ story, complete with excellent chart, showing that of the top ten biggest problem funds, known as Structured Investment Vehicles, Citi sponsored four, holding nearly $70 billion in debt.

(Citi is here found skulking yet around a financial disaster area. Where have I seen this picture? Was it Main Street? Wall Street? Japan? Clinton, Mississippi? What does take to get off Fortune’s the most-admired list, anyway?)

Anyway, the papers the last two days have been full of good information, even if it is troubling. Here are two bits more of sobering news. First, the Times reports that even Fed Chairman Ben Bernanke doesn’t know the value of the securities owned by these SIVs (pronounced “sieves”).

“I’d like to know what those damn things are worth,” Mr. Bernanke said in response to a question after his speech. Until investors “are confident in their evaluations,” he added, “they are not going to be willing to fund these vehicles.”

Finally, readers would be cheating only themselves if they failed click here for a look at a Times story and graphic. The story outlines the result of a study by Friedman, Billings, Ramsey, an investment bank based in Arlington, Virginia, that shows that many more bad loans were made and made much later than earlier believed.

The report’s author, Michael D. Youngblood, a portfolio manager and analyst at Friedman, Billings, Ramsey, said that most mortgage companies and banks had not tightened lending standards for borrowers with weak, or subprime, credit until July or August, even though early this year regulators, analysts and mortgage investors knew that the easy lending policies of 2005 and 2006 were producing high default rates.

“There are $10.6 trillion of mortgage loans outstanding in the U.S., and even if the brakes had been slammed, it was going to take a long time to slow this locomotive down,” said Mr. Youngblood, who has researched home lending for more than 20 years.

The accompanying graphic is a must. It shows that fully 16% of adjustable rate mortgages in 2005 and 12% made last year are already in default.

So, we have no idea how many ARMS made two, three and four years ago are going to go bad, but we know how many already are from 2005 and 2006. Anything above double digits is a very high number.

And it’s getting worse:

Borrowers who took out loans in the first six months of 2007 are falling behind on payments faster than homeowners who took out loans last year.

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Dean Starkman Dean Starkman runs The Audit, CJR's business section, and is the author of The Watchdog That Didn't Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014). Follow Dean on Twitter: @deanstarkman.