A decade ago, when Japan’s government was devising schemes to deal with its own mountain of bad debt, local bankers used to joke: “You can put rotten meat in a freezer, but it doesn’t remove the rot. It just takes away the smell – for a while.”

Wall Street would do well to remember that now. In recent days Hank Paulson, Treasury secretary, has been pushing for Washington to create the financial equivalent of a freezer, on a truly massive scale, via the launch of a bail-out fund. And, in so far as the details of this scheme are clear, it appears that the aim of this scheme is to freeze any assets in a manner that will give them a pretty flattering hue. On Tuesday, for example, Ben Bernanke suggested that the plan would probably pay “hold to maturity” prices for assets, rather than the current estimates of market value.