Back on 25th March, I wrote in regard to the Geithner toxic asset PPIP scheme that:br /emspan style=”font-family:georgia;”‘The key issue isn’t investor appetite, but bank reluctance to face up to the true market value of their portfolios; less than 20% is currently marked to market, the rest at par or marked to model. Will they really sell into auctions that will explicitly confirm the inadequacy of their capital positions and undermine the credibility of their internal risk models?’/span/embr /Well, now we have our answer; they won’t. Astonishingly, the Treasury is quietly shelving the PPIP scheme, hoping that $100bn of equity issuance (including the imminent Citi deal) and the boost to earnings from a steep yield curve and economic recovery will somehow be sufficient to bolster bank balance sheets.br /br /That looks quite unbelievably reckless to me, and pretty much guarantees another solvency crisis sooner rather than later. Of the ten …