How to use $700B on this crisis?

I really like the solution presented by Josh Rosner on Fast Money: http://www.cnbc.com/...60193473&play=1

Here are the key points of what he said:

• If you circle problem assets and unwind them over a period of time, there is nothing that cannot be unwind
• Financial institutions should open up their Level III and detail those assets (by collateral, vintage, size, tranche and how much they are marking them)
• In turn, we can give them one-time accounting compromise to amortize those losses over a long period of time
• This way, investors know what is there, so they can have a better idea of when the economy will recover. And they can give a proper price to these assets

This way, we can price these assets properly. The argument against this is perhaps that the Level III assets look so bad that opening them up would guarantee a run on the financial institution. In that case, insolvent financial institutions should fail. We can use the $700B to shore up FDIC/SIPC so that a bank run is not necessary. We can also use the money to buy up good assets of these institutions on a fire-sale, so that these assets can be disposed of in an orderly manner.

We need more transparency to restore public confidence. We should spend the $700B like a prudent investor.

Edited by risktaker, 21 September 2008 - 06:20 PM.

My guess is this won't be the prudent approach that will be followed. They'll pi$$ the money away in a fashion that will benefit the dealers assisting in the firesale. (Read Goldman, JPM, MS etc.) U.F.O.

Edited by U.F.O., 21 September 2008 - 06:28 PM.