The global economy is imperiled because of toxic waste. But what exactly is that? Simply put, it's securities backed by loans backed by assets like houses, shopping malls, office buildings, and credit card debt. Just jam 4,000 mortgages into a trust, pay a credit rating agency to wrap them in a AAA coating, find an investor hungry for higher yield at low risk -- and voila! You've created a vampire that sucks the blood out of the global financial system.

How so? Because what I've just described is securitization -- and the $13 trillion in mortgage-backed securities (MBSs) and collateralized debt obligations (CDSs) that remains on banks' books and in institutional investment portfolios has lost much of its value. $12.8 trillion in taxpayer money has gone to try to prop up the financial system as a result.

That's why it would seem to me that we ought to end securitization. So is that what the U.S. is doing about securitization? Of course not! Instead, it's spending $1 trillion of taxpayer money on Term Asset-Backed Securities Loan Facility (TALF) -- a way to revive a market which is practically dead right now -- having dropped from $906 billion in 2006 to $152 billion in 2008. 2009 deal volume? $16 billion. TALF would lend $1 trillion to investors so they'd start investing again in these securities.