WARREN TO BERNANKE: "So when are we gonna get rid of 'too big to fail?'"

[dkf]

4. The $83 billion subsidy is based on the market discounting the governments assertions

That is how the market is pricing the risk.

This is such a stupid argument.

Maybe people would believe the Fed would let big banks fail if they started reining in QE eternity. But they are so determined to build this possibly false confidence that it permeates to the idea that the government still won't let a large bank fail.

This is a government failure to persuade the public/investors their word is good on the subject, not the banks fault.