A Big Bank Bailout May Be Worth a Try

Put all of your rotten eggs in one basket and tie a bow on it -- thatÂ’s essentially what a plan to save the big money center banks from taking huge losses on bad mortgages entails.

But if this fiction makes it easier for the millions of homeowners who need to refinance their adjustable-rate mortgages, then it might be worth a try.

Even so, we should be under no illusion about what's really happening.

Last week, several big banks, including Citigroup(C Quote), J.P. Morgan Chase(JPM Quote) and Bank of America(BAC Quote), agreed to take all the mortgages they hold in off-balance sheet subsidiaries called "structured investment vehicles," or SIVs, and put them into one big, super-SIV called a single-master liquidity enhancement conduit, or SMLEC. That combined pool of securitized assets could hold as much as $75 billion of mortgages. ...