Investors have a saying - your first loss is your best loss. In other words, if you think an investment sucks, swallow your pride, take your lumps, and get out entirely now.
This is NOT how we have dealt with the financial crisis. Through a series of bailouts, we have tried to keep failing financial institutions and countries on life support. We have dragged out the reckoning on mortgages, so we still have not had a real clearing in the real estate market. Worse, we have postponed, even entirely interrupted, financial accountability for those who made bad investments or took on too much debt.
Here is an interesting counter-example - Iceland, which basically went entirely bankrupt along with pretty much all their banks, is on the road to recovery.