The bank's problem in one paragraph

Since the early days of the financial crisis, officials have struggled to unwind that knot. If the government buys the assets at prices that banks consider fair, the Treasury would take a huge loss when it ultimately sells the assets for much less. If, instead, the government insists on paying market prices, the banks may not survive their losses.
http://www.washingtonpost.com/wp-dyn/content/article/2009/02/03/AR2009020303782.html?hpid=topnews

So if the Government pays the price that the banks have these so-called"assets" on their balance sheet, then Treasury will take a huge loss.

How then, is the pricing of these "assets" on the banks balance sheet fair?

And if the government pays the price that the markets say the assets are worth, the banks then are insolvent.

So either you the taxpayer, buy hundreds of billions of dollars of toxic assets on balance sheets, or the banks go broke.

And only in banking, can toxic assets be sold for premiums to market prices!