Banking Bailouts and Plans

I try not to post too much on the whole credit and banking debacle that we are currently working through. I'm probably like a lot a people in that most of it is simply over my head. I usually take my cues from Paul Krugman.

For those interested in such things, Matthew Richardson and Nouriel Roubini have an article in the Washinton Post that is a good read.

One thing that I find interesting is that there seems almost a reluctance by many to figure out how many of the big banks are insolvent. I think part of the thinking is that if you start showing how a number of the big boys are actually insolvent you create more panic which results in more money being pulled out of the market and even tighter lending from the insolvent big boys. This may be, and probably is true, but should the first step in solving the problem be figuring out how many of the big banks are insolvent. Isn't one of the first steps in solving a problem, figuring out how big the problem actually is? Until we find out the true depth of the problem any solution is mainly guesswork, right?