Seriously. This is a national security issue.

If they buy that paper, they are rewarding the bad people, and there will be consequences.

You can count on massive protests in the streets if that happens.

And I, for one, will be leading them.

Let’s hope they aren’t that stupid.

Let the banks fail, and let the investment banks fail, and let new ones come up to take their places.

A short, sharp shock is better than 15 Japanese years of drudgery, and you will have preserved Law and Order.

Do not underestimate how the public will revolt on this issue if the US government buys that paper.

It might seem quiet now, but if that happens… all hell will break loose. Guaranteed.

Obviously,at least one shadow bank still feels that they are too big to fail. Is this the outcome of the BS bailout? If so, all of these so called Fed derived “safety nets” are likely to only make matters worse.

In fact, the best (least expensive, least morally hazardous, most fair and equitable, etc.) answer is to let the mortgage market mess (including the associated derivatives) work itself out through the marketplace.

I guess its not so banana republic when Grep Ip of the WSJ suggests the same options I did a short while ago.

# 1 in a more general way is also a standard feature in the implementation of central bank monetary policy, although usually done in a limited way. Any transfer of funds between the Treasury’s bank account with the Fed and its accounts with the commercial banks is mirrored as an change in commercial banks’ accounts with the Fed, thereby affecting reserve levels. These transfers, overseen by the Fed, can affect policy implementation as desired or can be offset by open market operations.

And # 2 is possible, although probably not necessary because of # 1.

Plant or not, Ip is correct.

—Axiom No. 1: “The Powers That Be must take no action which puts me out of business.”

—Axiom No. 2″ “The Powers That Be must make my hole whole.”

Proposals vary, but this is the invariable agenda. Such indescribable selfishness leaves me speechless. (Thank heavens I can still type.)

Don’t, _don.’t_, just DON’T ‘buy up’ MBSs on the open market. Here’s the program:

—Step No. 1: Find the insolvent concerns, seize them, wipe their shareholders and put other creditors in the queue.

—Step No. 2: _TAKE_ their toxic securities at a value _you_ determine back to the concern, and either re-float or run out that concern from that point with everyone getting a fair haircut if they won’t pitch in their respective chit as new stakeholders to float the boat

—Step No. 3: Put the MBSs and such like in public receivership (in effect under a contract conservator, much faster to source and go), and put a real value on them

—Step No. 4: We now have a market, and others holding MBSs can sell out at the market rate, if necessary to the public receiver if no one else, with _that action only_ financed by the public till as a market maker.

Every ‘plan-like’ proposal so far is premised on the idea that we the people have some bizarre obligation to get the rich man’s arse out of the crack with nought but a small red mark to it. Not so. Don’t ‘buy up’ their bad bets; run ‘em out. And fast, we need to _GET ON_ with this for the sake of the other 295 M of us. We have no obligation to spend our money to preserve your ill-hazarded wealth.