Yes, it’s all about "if we just believe banks are solvent, they will be! Clap your hands!"

First: Change accounting to mark to maturity instead of mark to market. A security is not worth what someone will pay for it, but what a mathematical model says it will be worth if held to maturity based on assumptions chosen by the banks. This is mark to make-believe.

Yes Virginia, there is such a thing as Santa Claus.

Second: Reserve requirements can be reduced to zero for banks. This means reserve requirements will be reduced to zero. But if you do keep reserves, the Fed will pay you interest on them. Why? So that you get the money you aren’t getting because you refuse to lend to other banks, which means "why bother lending to other banks?" How to not fix the interbank lending problem.

Yes Virginia, there is such a thing as a bank with the reserves to back up its loans. Honest.

Three: Government shares are to be non-voting.  Yup, we’ll bail you out for billions, but we wouldn’t want to have any say in how you run your business, or actually effectively nationalize you (by having over half the voting shares) because hey, you’ve proved so competent at running the business yourself!

Yes Virginia, the people in charge should be left in charge no matter how badly they mess up!

Four: Any bank with "significant" operations in the US that isn’t owned by a foreign government can be partake in the bailout. That means the US has just promised to bail out the entire world. Wheeeeeeee!

Yes Virginia, the US has infinite money!

Yup, this is never never land. If we just let the banks pretend they aren’t insolvent and if we just pretend we can print infinite amounts of money the whole problem can be made to just go away.

All you have to do is believe.

Yes Virginia, there are such things as solvent banks.

Honest.