Centerfield

Forget any bailout or CASH4TRASH, why not use our new assets and the solvent banks?

So the system is "clogged". There's not enough capital to go around to lend for home, car and other consumer loans, not a whole lot of money for business to use for expansion or even just ordinary operations. Hence the bailout. doesn't make sense. Why pay cash for trash that no one else seems to be buying?

Why not use Freddie and Fannie, along with components of AIG that we pretty much own or run as part of the solution? Why not use the 700 billion or so intended for bailouts for the loan capital this country needs instead?

F2 can be used as the initial conduit for an expanded distribution of home loans. AIG can provide the PMI and loan guarantees as needed. For all other loans the government can initially specify 20 or more banks with strong enough balance sheets like B of A, Wells Fargo, US National(sp?) and historically sane loan policies and make them conduits of government cash. For a small fee of course. Let's say Wells Fargo presents to the US Treasury a rough estimate of loans needed for the next 90 days in Northern California. Maybe 5 billion will allow them to fulfill customer loan needs for the next 30 days. B of A and other banks could present their numbers for that area. The Feds will supply the money at modestly below-market rates. Wells and other banks won't have to go to tapped out investors or China or anywhere else. If they need more money the Fed can supply it.

Repeat this around the country with other banks with solid financial footing. Expand as time goes on,

The loan processes may take a little longer because we'll enact tougher vetting rules. However it seems to me that the money would get out to the market faster and would provide both greater confidence in the market and less of a sense by the American Public that we're screwed again.

Now if someone wants to buy up the trash, that's fine. They can get loans for their efforts, with suitable collateral of course. But I see no reason to bail out a bunch of investors who lost their gamble.

This came to me this afternoon while listening to Randi Rhodes talk about how the bailout benefits a lot of people who got us into this mess in the first place.

Fire away. I know there are holes in this and missing details such as the role of the Federal Reserve, but maybe somewhere is an alternative to Trash4Cash AKA bail us out of another "BushCluster%*@#Part20-something". BTW, that's not a swearword, that's strong encryption.