How Maddow Is Rewriting The Rules Of Cable News

"I think I have a fear in general about whether being a pundit is a worthwhile thing to be," Rachel Maddow tells me over dinner at a Latin restaurant in lower Manhattan. It's more than the ordinary self-deprecation of someone who just got her own cable commentary show. It's an insecurity essential to the on-air style that's powered the 35-year-old's rapid rise from a wacky morning radio show in western Massachusetts to the liberal radio network Air America and now to her own prime-time show on MSNBC.

Maddow is not a Tim Russert or a Chris Matthews--an ostensibly nonpartisan interviewer who badgers politicians and policy-makers about contradictions in their records. Nor is she a Rush Limbaugh or a Glenn Beck--an attack dog who deals in calculated anger, bluster, and outrage. She's no mild-mannered liberal like Alan Colmes or a veteran observer like Wolf Blitzer or David Gregory. Maddow has broken the broadcasting mold. She has succeeded as an avowed liberal on television precisely because she is not a liberal version of conservatives like Sean Hannity and Glenn Beck. Unlike so many progressive media figures who sought to replicate the on-air habits of the aggressive shock jocks of the right, she stumbled upon a workable style for the left. She is liberal without apology or embarrassment, bases her authority on a deep comprehension of policy rather than the culture warrior's claim to authenticity, and does it all with a light, even slightly mocking, touch. She proves that liberals can attract viewers on television when they actually act like, well, liberals.

Eating to save the planet

Remember Brown Rice Week, those seven days of ritual deprivation at university to clear Third World debt? Well, good news - it's back. Once again we are being invited to change the world through our plates, only this time it lasts 52 weeks a year and it's not just Africa that we're going to save, it's the entire planet.

Ecotarianism is the new buzzword, a kind of greatest hits of all our favourite food movements from the past decade. It's about sourcing locally, organically, sustainably, in season and leaving the Earth's resources untouched. It's goodbye to £3 chickens imported from Thailand and hello to bean casseroles; no to winter asparagus and a resounding yes to celeriac mash.

Of course, there's nothing new in any of these ideas. We know that battery chickens lead a miserable existence, that airfreighting out-of-season vegetables wastes non-renewable fossil fuels and adds to global warming, but this is the first time the elements have been brought together and defined under one collective banner. Or sort of defined, as I discover when my editor sets me the challenge of living the ecotarian life for a week.

The word was apparently coined two years ago by a small group of Oxford undergraduates with an interest in food politics, but they failed to outline exactly what they meant, preferring the rather slippery goal of “minimising our ecological footprint”. I'll need more than that before I draw up my first shopping list.

The movement, though, is not without its heavyweight supporters. Patrick Holden, director of the Soil Association, thinks that ecotarianism is a power for good. “I'm all in favour of their approach, but I hope we don't turn it into a small sect. We don't want just a few green and woolly, slightly fungal, usual suspects doing these things. We want everyone doing them. It's an international issue - about the security of our food supplies. Our food systems are as precarious as the financial markets have proved to be, but we just don't realise it yet.”

You need the wisdom of Solomon and a degree in global economics to navigate your way along the food chain these days. Never has such a simple principle - of ferrying food from the ground to your mouth - been more convoluted. Local, organic, Fairtrade - they all fight for supremacy in the ecologically aware consumer's mind. Better a tomato grown in a heated greenhouse here or one grown in the open air but imported from Spain? Do you buy a non-organic rib of beef from a local farmer, or an organic one from farther afield? Or, as I fear will be the answer among my new ecotarian friends, do you buy none of the above and settle for a nice mung bean and nettle salad? Just what am I trying to achieve here?

The answer comes in part from Cristy and Paul, two vegan bloggers from Australia who I found on one of the few websites on ecotarianism (nopod.blogspot.com) and who go under the handle of Two Peas, No Pod. “For us, being ecotarians means that whenever we make a decision about our consumption (be that of food or any other product) we try to consider a whole myriad of ethical issues that relate to the impact of our choice on the Earth,” Cristy writes. She goes on to list some of them: whether a product has been produced locally or transported halfway across the world; whether it was created using slave labour; how much packaging is used and whether that packaging is recycled and recyclable; is it organic and, if not, what kind of chemicals have been used; is it cruelty free; how much energy and water was required to create the product; and was the product brought to us by a corporation that is unethical in its business practices?

Right, that all seems quite straightforward. With the list of do's and don'ts fresh in my mind, I head off to the supermarket, but after 20 minutes of dithering, I've got only two things in my basket - an apple and an organic cabbage. It's not looking a very promising lunch. The trouble is, once you start scrutinising everything you realise just how little information you have to go on. The sandwiches give no clue as to their provenance, everything at the salad bar has that gloopy sheen that comes only from dressings rich with artificial preservatives, and I'm pretty sure I shouldn't be touching the sushi. I even have to reject my banker dish, the Innocent Veg Pot: nothing wrong with the contents - that all looks healthily ecotarian - but the pot itself turns out not to be recyclable.

I admit defeat and take my basket to the checkout. “Excuse me, do you know if this Worcester Pearmain is really from Worcester?” I ask. You can never be too careful. I went to Jerusalem once and never saw a single artichoke.

“I'm not sure, dear, but it's from England somewhere,” the checkout assistant says, pointing to the Union Jack sticker. I hadn't spotted that unnecessary packaging, but I decide to take my chances. I shouldn't have bothered, though - looking at my receipt afterwards, I see that she put it through as a French Gala.

The following week I was due to be taking part in a food writers' recipe challenge at FishWorks, the seafood restaurant chain, with the winning recipe making its way on to its menu. I was hoping to get in some practice and, since FishWorks was paying for all the ingredients, I had been planning to do something such as lobster with a caviar crust, or at least a whole wild salmon. But clearly fish is a tricky area. Trawling nets as wide as a football pitch are ravaging the seabeds, escapees from fish farms are neutering our wild fish stocks, even the humble anchovy has joined cod and halibut on the Marine Conservation Society's list of species to avoid because of overfishing. Poached gurnard here we come, I fear.

“Mussels,” says Mitch Tonks, the founder of FishWorks, without hesitation when I phone for advice. “The most sustainable seafood on the planet. They have millions of spats a year, attach themselves to everything from ropes to piers and feed on the natural plankton in the water. We could dine on them every day of the year and it wouldn't make any difference.”

So that evening it's moules marinières, only without the parsley, because the only stuff I can find comes in small plastic packets from Israel - a double no-no. The wine has also caused a lot of indecision. Again it's that moral debate - better a Fairtrade wine from South Africa (profits ploughed back into education and accommodation for the workers' families) or a bottle of Chapel Down Flint Dry from Kent (minimal food miles)? The English wins but, at nearly double the price of the South African, I'm beginning to feel the cost of my newfound principles.

The next day, fearing a rerun of the lunchtime fiasco, I go back to Two Peas for more advice. “This isn't about being perfect, it is just about trying to make the best choices that we can,” Cristy writes. “At the supermarket we start off in the organic/health food aisle. There we buy cans of organic beans and tomatoes (and prioritise the ones that were grown locally). We also pick up some Green & Black's Maya gold chocolate when we are feeling a little naughty. It is vegan, organic and Fairtrade. However, it is also transported quite a long way to get to us and we don't really need it.”

Closer to home, Andy Hamilton is a Bristol-based forager and environmentalist and author of The Selfsufficient-ish Bible, an urban guide to “almost self-sufficiency”. Far from being a politically motivated firebrand, he is charmingly affable and at ease with this concept of compromise. “You have to question everything and look down the chain,” he says, “but it's about being realistic.” He grows his own vegetables and will cycle half an hour to buy a “decent” pint of milk. “But equally I will buy Fairtrade orange juice now and again and I'm not just thinking 'Right, I've done my bit for Africa there', but I do actively choose not always to buy local for that reason alone. I like to buy local honey, but occasionally will buy Fairtrade because it is helping the rainforest, in that if they are making money from it perhaps they'll stop chopping it down.”

This is more like it - nothing like a bit of moral relativism to ease the burden. What's more, I had assumed that meat would be strictly off limits, not because of any concerns about animal welfare - that's an area where organics has had a hugely beneficial impact - but because it's not the most efficient use of land. It takes 5kg of grain to produce 1kg of meat and, according to the British group Vegfam, a ten-acre farm can support 60 people growing soya beans, 24 people growing wheat, ten people growing corn and only two producing cattle. And then there's all that belching and farting - livestock are responsible for 18 per cent of the world's greenhouse gases, with each cow producing 220lb of methane a year, the equivalent of driving 7,800 miles. But then I read a report from Cornell University, New York, which found that the most efficient eco-diet still includes a much-reduced amount of meat as livestock can graze on areas unsuited to growing crops - the Welsh hillsides, for example. Suddenly I can look forward to some lamb chops to go with the organic veg box I hurriedly ordered from Abel & Cole.

In the new spirit of compromise, I hit the shops once more, and the weight is lifted. Once you get the measure of how strictly you want to set your own moral compass, it all becomes so much easier, so much less earnest. Food shopping isn't worth starving over, after all, and soon I start to develop a distinctly ecotarian swagger. I am a righter of wrongs, settling scores in the supermarket aisles, rewarding the good, punishing the bad. The Veg Pots are in, on the understanding that I'll use the empties for some as yet undecided purpose; any fruit in unnecessary packaging is rejected. Organic chicken is in, but bought only as a whole bird; coffee is out unless there's a picture of a smiling farmer on the back.

Let me tell you, it feels good. Until, that is, I return to my desk to find an e-mail from Tony Bourdain, New York's visceral commentator on all matters food related. He once described vegetarians to me as “frightened, angry, bitter people who dropped too much acid”.

What would he make of ecotarianism, I wondered. “A fad for the wealthy and delusional,” came the unequivocal reply.

Do's and don'ts: Where to draw the ecotarian line

MEAT

On the whole, eating meat is forbidden: the rearing of livestock is an inefficient use of land, and cows produce high levels of greenhouse gases. Meat is allowed only if the livestock have grazed on an area not suited to growing crops.

VEGETABLES

Out-of-season vegetables have either been flown around the world, or are produced in heated greenhouses. Neither is doing much for the environment. If in doubt, stick to turnips. No one would be fool enough to transport them far. A true ecotarian knows not to be sniffy about frozen veg, however. It's the most natural preservative known to man and means you can make the most of nature's bounty throughout the year.

FRUIT

Same rules as for veg, but without the turnips. Pineapples and mangoes, bad; English apples good (although only at this time of year).

FISH

Eat as much mackerel, herring, mussel and crab as you like, otherwise exercise extreme caution. The Marine Conservation Society publishes a book on what is OK to eat (www.mcsuk.org).

PALM OIL

You'll find it in one in ten supermarket products, from soap and lipstick to bread and peanut butter, and it is the biggest cause of deforestation in Malaysia and Indonesia, destroying the habitats of tigers, orang-utans and indigenous populations. This all makes it very bad.

PACKAGING

Not as straightforward as you'd think. Generally buy loose where possible, but peaches, for example, can be transported more efficiently and with less spoilage in those little punnets. But then, why are you buying peaches anyway?

BOTTLED WATER

The very definition of unnecessary packaging and transport. We ecotarians would rather eat foie gras than touch bottled water.

FAIRTRADE

The ecotarian's Get Out Of Jail Free Card. Chocolate? Coffee? Bananas? If there's anything you don't fancy doing without, make sure it comes fair trade. Socio-economic aid outweighs all other considerations in the ecotarian's mind.

Food for thought: From idealism to realism

Day 1: The strict ecotarian

Breakfast

I didn't trust the Rice Krispies - nothing against Kellogg's, but it just sounds too corporate and multinational - and processed bread is full of fungicides and chemical improvers. Luckily, I had a Poilâne loaf in the freezer. It's got spelt in it - and that had to be a good thing. And Rachel's Organic butter. To drink, mint tea; the leaves picked from the garden. Oh yes!

Lunch

One Worcester Pearmain apple (from Kent, Waitrose customer services later told me). One packet of Burts crisps (a small producer who has taken on the might of Walkers). Such bravery appeals to the anti-capitalist instincts I suspect I should now be harbouring.

Supper

Am I allowed to eat meat? Best not to risk it. Chickpeas with red onions, a feta substitute (from Denmark, which I calculate is a bit nearer than Greece) and chilli. It desperately needs a squeeze of lemon juice, but I'm not sure where they grow. Go to bed very hungry.

Day 2: the pragmatic ecotarian

Breakfast

Rude Health porridge, made from home-grown organic oats. Served with organic milk and a sliced Fairtrade banana. Union Hand-Roasted Organic Natural Spirit coffee, fairly traded from Central and South America. Mmmm, caffeine.

Lunch

Innocent Veg Pot. The contents are all spot-on - pulses, home-grown vegetables, etc. Shame the container isn't recyclable. But if I use it to keep my pencils in...

Supper

An organic chicken, bought whole to minimise packaging and ensure that every part is used. I poached a couple of legs with an organic cabbage from Herefordshire and some butter beans from a tin. Tomorrow, the children can have the breasts grilled and I'll make stock from the bones. All washed down with a Fairtrade Pinotage from South Africa.

NATO says Pakistani troops fired at their chopper

KABUL, Afghanistan - NATO says Pakistani troops fired at their helicopters patrolling eastern Afghanistan, but no damage is reported.

In a statement, NATO says its helicopters did not cross into Pakistan's airspace when they came under fire near Tanai district of Khost province.

The shooting follows a number of alleged incursions at the Pakistan-Afghan border in recent days. A drone believed to be operated by the CIA crashed inside Pakistan on Wednesday

Laura Bush: Palin lacks foreign policy experience

WASHINGTON - First lady Laura Bush says Republican vice presidential nominee Sarah Palin lacks sufficient foreign policy experience but is a very quick study.

In an interview Wednesday with CNN, the first lady remarked that it's fortunate that Republican presidential nominee John McCainhas foreign policy experience himself.

Still, Mrs. Bush says she has a lot of confidence in Palin. She says the Alaska governor has a lot of good common sense, and the first lady adds that she is thrilled to have a chance to vote for Palin on the GOP ticket.

Mrs. Bush also said that she thinks Palin is being treated unfairly because she is a woman. That, the first lady says, is to be expected.

North Korea kicks out inspectors and reopens nuclear plant

In a highly provocative snub to Washington, Beijing and Seoul, North Korea has broken the United Nations seals that had disabled its nuclear programme, and said it would soon begin feeding atomic material back into its Yongbyon facility.

As well as kicking UN nuclear watchdog inspectors out of the country and re-opening its reprocessing plant, Pyongyang is now likely to demand the removal of International Atomic Energy Agency (IAEA) seals on the thousands of plutonium fuel rods removed from the plant last year.

The fuel rods represent the most critical ingredient in the resurrection of Kim Jong Il’s nuclear weapons programme – a scenario which the United States and North Korea’s immediate neighbours thought they had negotiated off the table and are desperate to avoid.

The sudden policy reverse by Pyongyang also comes amid swirling doubts over the health of North Korea’s enigmatic and unpredictable dictator.

Kim’s non-appearance at a series of high profile public events in North Korea has triggered speculation that the “Dear Leader” of the nuclear-armed communist country may be extremely ill, incapacitated or even dead.

Defence analysts in Washington and Seoul have begun to question how far the sudden shift in North Korea’s behaviour reflects a change in power structures beneath the regime’s opaque surface.

On Monday, the US assistant secretary of state and chief nuclear negotiator with Pyongyang, Christopher Hill, openly speculated that the regime’s tougher line in the past month clearly corresponded to the reported failure of Kim’s health.

The restarting of North Korea’s nuclear programme follows threats from Pyongyang last week that it would abandon the so-called Six Party Talks – a series of prickly negotiations between the two Koreas, the US, Japan, China and Russia that have frequently collapsed.

Despite the many diplomatic frustrations of the process, though, it did appear last year that progress was being made: as well as agreeing to dismantle its nuclear programme in exchange for aid, and allowing IAEA inspectors to monitor the shutdown, Pyongyang broadcast images of the controlled detonation of an old cooling tower.

But yesterday’s potentially incendiary move sets the entire progress of disarmament talks back at square one and comes amid growing toxicity of relations between North Korea and the outside world.

A major contributor to the tensions surrounding the nuclear programme has been the continued designation of North Korea by the US as a sponsor of terrorism.

North Korea appeared on the brink of leaving the list, but over the summer, the US negotiators adopted a harder line. In an increasingly tense rhetorical climate, Pyongyang then declared that it no longer cared whether or not it was on the list, depriving Washington of one of its few bargaining chips.

Analysts in Seoul said that the restarting of Yongbyon, which would take at least 12 months to complete, would provide the North with a useful bargaining tool as the issues of Kim’s health – and the still unanswered question over who might succeed him – came more fully to light. With the plant partially re-started, North Korea might expect to win further concessions or aid as it struggles with massive food and energy shortages ahead of the notoriously bitter Korean winter.

 

Bush warns 'entire economy is in danger'

WASHINGTON - President Bush said Wednesday that lawmakers risk a cascade of wiped-out retirement savings, rising home foreclosures, lost jobs and closed businesses if they fail to act on a massive financial rescue plan. "Our entire economy is in danger," he said.

"Without immediate action by Congress, American could slip into a financial panic and a distressing scenario would unfold," Bush said in a 12-minute prime-time address delivered from the White House East Room that he hoped would help rescue his tough-sell bailout package. "Ultimately, our country could experience a long and painful recession."

Said Bush: "We must not let this happen."

The unprecedented $700 billion bailout, which the Bush administration asked Congress last weekend to approve before it adjourns, is meeting with deep skepticism, especially from conservatives in Bush's own Republican Party who are revolting at the high price tag and massive private-sector intervention by government. Though there is general agreement that something must be done to address the spiraling economic problems, Bush has been forced to accept changes almost daily, based on demands from the right and left.

Seeking to explain himself to conservatives, Bush stressed he was reluctant to put taxpayer money on the line to help businesses that had made bad decisions and that the rescue is not aimed at saving individual companies. He tried to address some of the major complaints from Democrats by promising that CEOs of failed companies won't be rewarded, while warning he would draw the line at regulations he determined would hamper economic growth.

"With the situation becoming more precarious by the day, I faced a choice: to step in with dramatic government action or to stand back and allow the irresponsible actions by some to undermine the financial security of all," Bush said.

The president turned himself into an economics professor for much of the address, tracing the origins of the problem back a decade.

But while generally acknowledging risky and poorly thought-out financial decisions at many levels of society, Bush never assigned blame to any specific entity, such as his administration, the quasi-independent mortgage giants Fannie Mae and Freddie Mac or the Wall Street firms that built rising profits on increasingly speculative mortgage-backed securities. Instead, he spoke in terms of investment banks that "found themselves saddled with" the toxic assets the government is now proposing to buy and banks that "found themselves" with questionable balance sheets.

Intensive, personal lobbying of lawmakers is not usually Bush's style as president, unlike some predecessors. He does not often make calls or twist arms on behalf of a legislative priority.

But with the nation facing the biggest financial meltdown in decades, Bush took the unusual step of asking Democrat Barack Obama and Republican John McCain, one of whom will inherit the financial mess in four months, and key congressional leaders of both parties to a White House meeting on Thursday to work on a compromise.

Obama spokesman Bill Burton said the senator would attend the meeting scheduled for the afternoon, and senior McCain advisers said he would, too. The plans of the other invitees were unknown. The White House said that the idea for the joint meeting was McCain's and that aides went about setting it up after Bush and McCain spoke Wednesday afternoon.

In another move welcome at the White House, Obama and McCain issued a joint statement using their own dire language to urge lawmakers to act. The two candidates — bitterly fighting each other for the White House but coming together over this issue — said the situation offers a chance for politicians to prove Washington's worth.

"The plan that has been submitted to Congress by the Bush administration is flawed, but the effort to protect the American economy must not fail," they said. "This is a time to rise above politics for the good of the country. We cannot risk an economic catastrophe."

However, the Oval Office rivals were not putting politics aside entirely. McCain asked Obama to agree to delay their first debate, scheduled for Friday, while Obama said it should go ahead.

White House and administration officials have warned repeatedly in recent days of a coming "financial calamity."

WASHINGTON - President Bush said Wednesday that lawmakers risk a cascade of wiped-out retirement savings, rising home foreclosures, lost jobs and closed businesses if they fail to act on a massive financial rescue plan. "Our entire economy is in danger," he said.

"Without immediate action by Congress, American could slip into a financial panic and a distressing scenario would unfold," Bush said in a 12-minute prime-time address delivered from the White House East Room that he hoped would help rescue his tough-sell bailout package. "Ultimately, our country could experience a long and painful recession."

Said Bush: "We must not let this happen."

The unprecedented $700 billion bailout, which the Bush administration asked Congress last weekend to approve before it adjourns, is meeting with deep skepticism, especially from conservatives in Bush's own Republican Party who are revolting at the high price tag and massive private-sector intervention by government. Though there is general agreement that something must be done to address the spiraling economic problems, Bush has been forced to accept changes almost daily, based on demands from the right and left.

Seeking to explain himself to conservatives, Bush stressed he was reluctant to put taxpayer money on the line to help businesses that had made bad decisions and that the rescue is not aimed at saving individual companies. He tried to address some of the major complaints from Democrats by promising that CEOs of failed companies won't be rewarded, while warning he would draw the line at regulations he determined would hamper economic growth.

"With the situation becoming more precarious by the day, I faced a choice: to step in with dramatic government action or to stand back and allow the irresponsible actions by some to undermine the financial security of all," Bush said.

The president turned himself into an economics professor for much of the address, tracing the origins of the problem back a decade.

But while generally acknowledging risky and poorly thought-out financial decisions at many levels of society, Bush never assigned blame to any specific entity, such as his administration, the quasi-independent mortgage giants Fannie Mae and Freddie Mac or the Wall Street firms that built rising profits on increasingly speculative mortgage-backed securities. Instead, he spoke in terms of investment banks that "found themselves saddled with" the toxic assets the government is now proposing to buy and banks that "found themselves" with questionable balance sheets.

Intensive, personal lobbying of lawmakers is not usually Bush's style as president, unlike some predecessors. He does not often make calls or twist arms on behalf of a legislative priority.

But with the nation facing the biggest financial meltdown in decades, Bush took the unusual step of asking Democrat Barack Obama and Republican John McCain, one of whom will inherit the financial mess in four months, and key congressional leaders of both parties to a White House meeting on Thursday to work on a compromise.

Obama spokesman Bill Burton said the senator would attend the meeting scheduled for the afternoon, and senior McCain advisers said he would, too. The plans of the other invitees were unknown. The White House said that the idea for the joint meeting was McCain's and that aides went about setting it up after Bush and McCain spoke Wednesday afternoon.

In another move welcome at the White House, Obama and McCain issued a joint statement using their own dire language to urge lawmakers to act. The two candidates — bitterly fighting each other for the White House but coming together over this issue — said the situation offers a chance for politicians to prove Washington's worth.

"The plan that has been submitted to Congress by the Bush administration is flawed, but the effort to protect the American economy must not fail," they said. "This is a time to rise above politics for the good of the country. We cannot risk an economic catastrophe."

However, the Oval Office rivals were not putting politics aside entirely. McCain asked Obama to agree to delay their first debate, scheduled for Friday, while Obama said it should go ahead.

White House and administration officials have warned repeatedly in recent days of a coming "financial calamity."

 

Plan's Basic Mystery: What's All This Stuff Worth?

What would you pay, sight unseen, for a house that nobody wants, on a hard-luck street where no houses are selling?

That question is easy compared to the one confronting the Treasury Department as Washington works toward a vast bailout of financial institutions. Treasury Secretary Henry M. Paulson Jr. is proposing to spend up to $700 billion to buy troubled investments that even Wall Street is struggling to put a price on.

A big concern in Washington — and among many ordinary Americans — is that the difficulty in valuing these assets could result in the government's buying them for more than they will ever be worth, a step that would benefit financial institutions at taxpayers' expense.

Anyone who has tried to buy or sell a house when the market is falling, as it is now, knows how difficult it can be to agree on a price. But valuing the securities that the Treasury aims to buy will be far more difficult. Each one of these investments is tied to thousands of individual mortgages, and many of those loans are going bad as the housing market worsens.

"The reality is that we are not going to know what the right price is for years," said Andrew Feltus, abond portfolio manager at Pioneer Investments, a mutual fund firm based in Boston. "It might be 20 cents on the dollar or 60 cents on the dollar, but we won't know for years."

While prices of most stocks are no mystery — they flicker across PCs and televisions all day — the troubled investments are not traded on any exchange. The market for them is opaque: traders do business over the telephone, and days can go by without a single trade.

Not only that, many of these instruments are extremely complex. Consider the Bear Stearns Alt-A Trust 2006-7, a $1.3 billion drop in the sea of risky loans. Here's how it worked:

As the credit bubble grew in 2006, Bear Stearns, then one of the leading mortgage traders on Wall Street, bought 2,871 mortgages from lenders like the Countrywide Financial Corporation.

The mortgages, with an average size of about $450,000, were Alt-A loans — the kind often referred to as liar loans, because lenders made them without the usual documentation to verify borrowers' incomes or savings. Nearly 60 percent of the loans were made in California, Florida and Arizona, where home prices rose — and subsequently fell — faster than almost anywhere else in the country.

Bear Stearns bundled the loans into 37 different kinds of bonds, ranked by varying levels of risk, for sale to investment banks, hedge funds and insurance companies.

If any of the mortgages went bad — and, it turned out, many did — the bonds at the bottom of the pecking order would suffer losses first, followed by the next lowest, and so on up the chain. By one measure, the Bear Stearns Alt-A Trust 2006-7 has performed well: It has suffered losses of about 1.6 percent. Of those loans, 778 have been paid off or moved through the foreclosure process.

But by many other measures, it's a toxic portfolio. Of the 2,093 loans that remain, 23 percent are delinquent or in foreclosure, according to Bloomberg News data. Initially rated triple-A, the most senior of the securities were downgraded to near junk bond status last week. Valuing mortgage bonds, even the safest variety, requires guesstimates: How many homeowners will fall behind on their mortgages? If the bank forecloses, what will the homes sell for? Investments like the Bear Stearns securities are almost certain to lose value as long as home prices keep falling.

"Under the current circumstances it's likely that you are going to take a loss on these loans," said Chandrajit Bhattacharya, a mortgage strategist at Credit Suisse, the investment bank.

The Bear Stearns bonds are just one example of the kind of assets the government could buy, and they are by no means the most complicated of the lot. Wall Street took bonds like those of Bear Stearns and bundled and rebundled them into even trickier investments known as collateralized debt obligations, or C.D.O.'s

"No two pieces of paper are the same,"said Mr. Feltus of Pioneer Investments.

On Wall Street, many of these C.D.O.'s have been selling for pennies on the dollar, if they are selling at all. In July, Merrill Lynch, struggling to bolster its finances, sold $31 billion of tricky mortgage-linked investments for 22 cents on the dollar. Last November, Citadel, a large hedge fund in Chicago, bought $3 billion of mortgage securities and other investments for 27 cents on the dollar.

But Citigroup, the financial giant, values similar investments on its books at 61 cents on the dollar. Citigroup says its C.D.O.'s are relatively high quality because they were created before lending standards weakened in 2006.

A big challenge for Treasury officials will be deciding whether to buy the troubled investments near the values at which the banks hold them on their books. That would help minimize losses for financial institutions. Driving a hard bargain, however, would protect taxpayers.

"Many are tempted by a strategy of trying to do both things at once," said Lawrence H. Summers, a former Treasury secretary in the Clinton administration. As a hypothetical example, Mr. Summers suggested that an institution could have securities on its books at $60, but the current market price might only be $30. In that case, the government might be tempted to come in at about $55.

Many financial institutions are so weak that they must sell their troubled assets at prices near the value on their books, Carlos Mendez, a senior managing director at ICP Capital, an investment firm that specializes in credit markets. Anything less would eat into their capital.

"Depending on your perspective on the economy, foreclosure rates and home prices, the market may eventually reflect that price. But most buyers are not willing to make that bet right now," he said. "And that's why we have these low prices."

Ben S. Bernanke, the chairman of the Federal Reserve, told Congress on Tuesday that the government should avoid paying a fire-sale price, and pay what he called the "hold-to-maturity price," or the price that investors would bid if they expected to keep the bond till it was paid off.

The government would buy the troubled investments with the intention of eventually selling them back to the market when prices recover.

The Treasury has suggested it might conduct reverse auctions to determine the price for securities that are not trading in the market.

Unlike in a traditional auction in which would-be buyers submit bids to the seller, in areverse auction the buyer solicits bids from would-be sellers. Often, the buyer agrees to pay the second-highest bid submitted to encourage sellers to compete by lowering their bids for all the assets submitted. The buyer often also sets a reserve price and refuses to pay any more than that price.

But Mr. Paulson told Congress on Tuesday that the government would use many other means in addition to auctions, suggesting that it would exercise wide discretion over the final prices to be paid.

Financial institutions will have an incentive to sell their worst assets to the government, a risk that the Treasury will have to guard against, said Robert G. Hansen, senior associate dean at the Tuck School of Business at Dartmouth College.

"I am worried that the people who are going to offer the securities to the government will be the ones that have the absolute worst toxic waste," Professor Hansen said. Even so, he added, the government could actually make a profit on its purchases — provided the Treasury buys at the right prices. Richard C. Breeden, a former chairman of the Securities and Exchange Commission, said the auctions could thaw parts of the markets that have been frozen since late last year.

"One of the problems that many institutions are having is finding any bid for some of these assets, even though they are not without value," said Mr. Breeden, who is chairman and chief executive of Breeden Capital Management, an investment firm in Greenwich, Conn.

"What are these assets worth?" asked Mr. Breeden. "Sometimes, because of fear or extreme uncertainty in the markets, you get in a situation in which there are no bids at all, or at least no realistic bids."