We've thrown around the terms "staggering" and "historic" a lot recent. But AIG's Q4 loss is truly impressive.

The company lost $61.7 billion in the fourth quarter of 2008. If you do the math, that works out to:

• $676 million per day
• $28 million per hour
• $7,825 per second

By the time you finish reading this sentence, they will have lost another $25,000.

Blink ($7,825). Blink ($7,825). Blink ($7,825).

And you thought David Boies had a good hourly rate ...

All of which gets me to Jim's blog about whether ETFs can save the world, because it's pretty obvious that the world needs saving.

Toward that end, I think the concept of using an ETF structure to provide broad access to subprime debt is very attractive. 

One of the biggest problems with subprime debt is that it is being marked down beyond what a rational, well-capitalized investor might pay for it. The reason you hear so much complaining about "mark-to-market" accounting is that it's being applied to an area of finance where there is no market. All the people who have historically bought subprime debt—large banks, hedge funds, HNW private investors, etc.—are frozen out of the markets. They're working hard to protect their franchises from default, and they don't have the risk capital available to buy subprime debt. 

Imagine, for instance, that you opened the paper tomorrow and it said that Citigroup had bought $10 billion in subprime debt. Even if they bought it at a ridiculously low price—say, 1 cent on the dollar—there would be a huge uproar, because the bank needs to be conserving capital and not risking it on vulture assets.  

The result is a buyer's strike: No matter what price is assigned to these assets, traditional buyers are not going to buy them.

The beauty of an ETF is that it would allow all investors—you, me, anyone—to participate in the market. It would create a liquid market where securities could find a decent price level. At some level, these things are a steal. But until we have something like an ETF that lets me access them, I have no way of expressing that opinion.

There's a risk that the market would price these securities so low that they would imply that the banks are insolvent. That could be mitigated by providing some sort of government guarantee to the bonds, to ensure that they have some minimum value. A number of the people looking at this matter have suggested the same.

There are problems with the ETF structure that need to be worked out. But it's an interesting concept, and one that has been gaining momentum on multiple fronts.