bernie bicoy

Wall Street Breakfast: Must-Know News

Has it occured to anyone there is a much simpler way out of this mess than bailing out ''Investment Banks'' (brokerage firms) that created the mess with $700 billion?

If, as Paulson and Bernanke assert, if they aren't bailed out money will not be available to make consumer and business loans, then why not make the $700 billion available for traditional banks (i.e. FDIC banks that existed BEFORE Wall Street ''Investment Banks'' were created by the repeal of the Glass-Steagall Act).

According to the FDIC chairman traditional banks are in fairly good shape. If so, then make the $700 billion available as 'emergency loan funds' at, say, half of the fed discount window rate so the banks can make the loans that Paulson and Bernanke are worried will collpase the economic level of activity.

The traditional banks could also, if they want, cherry pick the Investment Banks mortgage portfolios, and buy them at a price determined by the banks, and not by the government or the Investment Banks, both of which are likely to be way too high.

Then let the Wall Street probably-should-have-s... ''Investment Banks'' deal with the mortgage securities no one wants, and deal with the FBI.

Bernie Bicoy