How the market works
To understand how the market works, supply and demand will usually determine prices.
If there are more buyers than sellers, prices will go up, if there are more sellers than buyers, prices will go down. Where there is an equilibrium, prices will be stable. With this simple approach, you can determine whether there is a buyers market or a sellers market whether you are talking about something close to home like home prices in the Charleston real estate market or the price of the toxic paper that no one on Wall Street or around the world seems to want to buy.
(except the Treasury and the Fed) 
When the price is attractive enough, someone will step up and make an offer. Buyers like JP Morgan picking up Bear Stearns and WAMU, Bank of America taking over Countrywide and Merrill Lynch or Warren Buffett making a major investment in Goldman Sachs are examples of buying distressed assets at bargain prices.
It seems to me that the government is looking to unnecessarily overpay for the toxic assets in the proposed bailout. After all, they should still be able to help out troubled financial institutions by paying the lower prices in the chart on the left instead of the higher prices in the chart on the right.
So ...
I certainly don't understand what the the Treasury and the Fed are thinking especially when their "rescue to save the world" doesn't address the root causes of the problem.
From the Washington Post, Away From Wall Street, Economists Question Basis of Paulson's Plan.
"There is a kind of suggestion in the Paulson proposal that if only we provide enough money to financial markets, this problem will disappear," said Joseph Stiglitz, a Nobel Prize-winning economist. "But that does nothing to address the fundamental problem of bleeding foreclosures and the holes in the balance sheets of banks."