Toxic Assets are not only non-performing assets incapable of  paying interest, but are assets that are depreciating rapidly and are not likely to stabilise in the current environment. With more than USD 1.2 trillion of Sub-Prime mortgages written, most of them compounded via derivatives exposure, the US Treasury Secretary, Tim Geithner has the unenviable job of  leading the way in fixing this complex situation. The USA will look to allocate up to USD 100 Billion which is intended to assist private investors in purchasing these ‘Toxic Assets’  which can hold long term value. Ultimately the balance sheets could reduce by some USD 1,000 Billion. It’s a plan that could provide much needed stability in the financial sector. As far as market volatility goes, we should not expect these record high levels to drop off any time soon, very encouraging for  well thought out Option ‘Spread’ trading and trading in general with a non-directional bias.