'Bad bank' skeptics question latest financial cure-all

Yesterday, the stock market bounced in hopes Obama and FDIC will set up a "bad bank" to buy bad bonds and loans, making it easier for lenders to do their thing and get the economy going again.

Today, the skeptics:

A) Meredith (Mrs. Pro Wrestler JBL) Whitney, the Oppenheimer & Co. analyst who predicted Citigroup's dismemberment and a continued drop in housing prices, tells clients, "Simply removing 'toxic' assets from bank balance sheets will not directly cause banks to increase lending." And, she asks, how much would the government pay for the bad stuff? Too little, and banks won't be able to tolerate the write-offs; too much, and taxpayers will scream. Better for banks to sell their good assets to private investors. If the banks have any.

B)  Charles Schumer, D-NY, the senator whose big mouth was blamed by the FDIC for last summer's fatal and expensive run at IndyMac Bank, tells Reuters a "bad bank" could cost $4 trillion -- or something like that -- and he thinks that's too expensive. 

Plus a thoughtful comment from Scott Siefers and Kevin Fitzsimmons at Sandler O'Neill + Partners: "Investors are starved for any piece of potentially good news.... The problem is there are still more questions than answers..." Should the government buy common stock? Should it insure loans? "At the core is the dilemma of how the government can help save the industry without basically owning it."