Is the bailout for securities which were deliberately designed to be high-risk?

I've been hearing $5T as the real estimated amount needed just to cover the direct liabilities. So $700B is far to low and I'm still not clear if that includes the bailout of Fannie/Freddie so it may be $7-8T. And we're not even talking about money for stimulus or how it's going to suddenly get people borrowing or loaning out money again. And if the plan is to use installments, $100B chunks won't even cover a single Wachovia sized failure

I'm also hearing estimates of a 20% general default rate - on the low side and with total US debt up to $24T now...I think that's where the $5T estimate comes from. Is anyone seriously suggesting the covering of $600T+ notional value of derivatives?

we're definitely on the knife's edge now. I'm just glad my 401k is not locked out like so many of my friends.