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Cramer: Man of "Steele" Watching Over Wachovia

America lost an important civil servant -- a hero of the masses -- when Bob Steele gave up his post of Treasury Undersecretary to take over the reins of the troubled Wachovia Bank . Cramer worked with him at Goldman Sachsand praises him simply a "brilliant man," not a compliment Cramer gives often -- with the exception of certain dead classical composers. Steele is a "visionary and a hard worker," someone who "gets" that the banking system is in dire straits.

While Cramer hoped he would stay at his government post to continue helping from behind the scenes (he was in integral player in the Bear Stearns- JPMorgandeal, "an important save" for the banking world), perhaps if he saves Wachovia, he'll be accomplishing the same thing through different means.

Bob Steele is familiar with many streets, not just Wall Street. He's familiar with Granite Street. Are you? Back in 1988, the storied Mellon Bank hit a wall due to bad real estate loans (sound familiar?). The bank was saved from the brink when it innovatively split into two entities: "Good Bank" and "Bad Bank." Good Bank continued using the Mellon Name while Bad Bank got spun off as Granite Street, a new company created to be Mellon's landfill of bad loans.



Then, Granite Street was sold off on a "non-recourse" basis -- meaning it wasn't responsible for any bad loans involved with it. So Mellon managed to raise capital to keep itself afloat. People who believed the mortgages "weren't all bad" were given chances to buy shares in Bad Bank, a.k.a Granite Street.



Bob Steele knows his stuff, including the Granite Street "strategy," and he knows that a deal would require approval from several agencies, including the Federal Reserve, FDIC and bank examiners. It takes special talent to spin off and sell a "Bad Bank." Cramer believes Bob has the talent to put that strategy in motion at Wachovia -- and to sell Wachovia's Bad Bank to the public.

A save like that would keep Wachovia alive -- perhaps even prosper. It would take time, but if it's a success, it could serve as a model for other banks to follow the same path. It's a far-reaching plan, and we're lucky to "have the one man who has enough credibility and the contacts to pull it off."


Questions for Cramer? madmoney@cnbc.comQuestions, comments, suggestions for the Mad Money website? madcap@cnbc.com

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