How so? First, the assets probably do not trade, therefore they could be worth much less than models estimate. And second, the COPs' calculations appear to exclude the decline in value of the preferred stock and warrants that has probably occurred since bank stocks have fallen so much in the last several months. Moreover, the bigger question that remains unanswered is this: What specific benefits, if any, has the global financial system gotten as a result of the $350 billion already spent -- (a fraction of the $9 trillion in capital outlays and guarantees made so far)?

The standard answer appears to be that the system would have collapsed without TARP. While this "argument" seems to "work" for some people, I find it completely unconvincing. I have not heard one specific explanation that connects the TARP money to blocking the failure of the financial system.

What would help convince me is if someone could demonstrate that a specific part of the financial system -- say an individual bank -- would have failed if it had not received the TARP money. Moreover, I would like to see an explanation of how that bank failure would have caused the entire financial system to collapse along with that bank. Finally, I would like to understand how getting that money would be more cost-effective for taxpayers than an orderly bankruptcy filing.

Meanwhile, the question remains of what to do with the next $350 billion. As I posted, I would like to put the money into my colleague's plan -- to let the FDIC buy the, say, 15% of bad mortgages out of Mortgage-Backed Securities (MBSs) and Collateralized Debt Obligations (CDOs). This FDIC buy would let those MBSs and CDOs trade at 90% of their face value and would relieve financial institutions of their hundreds of billions of Level 3 assets which are dragging down the system. The FDIC could then use its control of the mortgages and its skill at restructuring to help struggling homeowners.

The $78 billion taxpayer ripoff on TARP I is on Hank Paulson, let's hope Tim Geithner does not make the same mistakes with TARP II.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College. His eighth book is You Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing.