Precisely. There are plenty of private buyers for those papers at 0.08-0.10 on the dollar but the banks are no budging since doing so will render them insolvent

Precisely. There are plenty of private buyers for those papers at 0.08-0.10 on the dollar but the banks are no budging since doing so will render them insolvent. So Paulson will use the taxpayers' money to buy the papers at above market price, ensuring survivability of the banks, while the taxpayers hold the risk of further depreciation of the papers.