By now investors are having a Pavlovian response to word of forthcoming action from the government to recapitalize the struggling banks. Fresh off another round of yelling "Tarp lives," banking shares have recovered their swagger and are moving higher.

The latest plan involves some kind of aggregator bank, that would utilize private capital and government insurance to create an aggregated shell company (suggested headquarters include Yucca Mountain, Nev., and Three Mile Island) to purchase various debt obligations that the...