GO
Loading...

The Capitalist Solution

Friday, 26 Sep 2008 | 7:13 PM ET

As lawmakers struggle to determine what’s best for Wall Street, we couldn’t help but wonder what the market thinks?

Republicans and Democrats can’t seem to agree on anything, least of all a rescue package for the beleaguered banking industry.

Currently the proposal from the White House would:

- Authorize the government to buy distressed debt from private firms,
- Limit pay packages for executives of firms that seek assistance,
- Allow taxpayers to profit if the bailout plan works.

Liberals by and large support the President’s plan. However conservatives balk at the idea of government bailing out private enterprise and using tax dollars to do it. They’ve made alternate proposals in which:

- Wall Street and not tax payers fund the bailout,
- Private capital and not tax dollars are injected into the financial markets,
- Immediate transparency, oversight and market reform are implemented immediately.

Waiting On Deal
Discussing what's a market-based solution, with Jon Najarian, OptionMonster.com and the Fast Money team.

Dylan Ratigan has a solution. He advocates “using this opportunity to take the public dollars that are going to be at risk to demand a public market for these currently opaque mortgage backed securities. Make the Fed or Treasury the first bidder and then post them on public markets around the world so that anyone who has an interest in buying them can post a price."

"We need a price discovery mechanism and a centralized marketplace where people can come and see this information," adds Jon Najarian on Fast Money. In other words trade them in much the same way stocks are traded. Or post them like people post concert tickets on StubHub.com and see what price they bring.

Karen Finerman doesn't buy it. She thinks the trouble is with the asset itself and not the degree of transparency it has.

Sounds like a disagreement. Kind of like Congress.

For more on the pros and cons of this solution please watch the video.




______________________________________________________
Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap! If you'd prefer to make a comment but not have it published on our website send your e-mail to fastmoney@cnbc.com.

Trader disclosure: On Sept. 26, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (MSFT), (WMT); Seymour Owns (AAPL), (EEM), (MER), (MSFT); Seygem Asset Management Owns (VIP); Seygem Asset Management Is Short (RSX); Finerman Owns (GS); Finerman's Firm Owns (MSFT), (MO), (PM), (RAI) ; Finerman's Firm Is Short (IYR), (IJR), (MDY), (SPY), (IWM); Terranova Owns (AAPL), (EOG), (FCX), (FTO), (GS), (KOL), (NOV), (POT), (X), (YHOO); Terranova Is Long Mini S&P Futures; Terranova Owns (AIG) And Owns (AIG) Puts; Terranova Owns (MS) And Owns (MS) Puts; Terranova Is Long Crude Oil

Terranova Is Chief Alternatives Strategist Of Phoenix Investment Partners, Ltd.
Phoenix Investment Partners Owns More Than 1% Of (ABD), (ARE), (BIG), (BRE), (CNTY), (CNW), (CLB), (OFC), (DLM), (DRH), (DLR), (EPR), (ESS), (EXR), (AGM), (FL), (GBL), (GNET), (IGE), (LNET), (MAC), (OIIM), (PSPT), (DBC), (DBV), (SLB), (GWX), (SSYS), (SKT), (UA), (BIV), (VV), (BLV)
Phoenix Investment Partners Owns More Than 1% Of Goldman Sachs Financial Square Fund - Money Market Fund
Phoenix Investment Partners Owns More Than 1% Of Seagate Technology Tax Refund Rights

Terranova Is Co-Portfolio Manager Of The Phoenix Diversifier PHOLIO; Phoenix Diversifier PHOLIO Owns (IGE), (DBC), (DBV)

GE Is The Parent Company Of CNBC

Featured

Contact Fast Money

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET
  • Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

  • Scott Wapner is host of the "Fast Money Halftime Report," which airs weekdays from 12 p.m. to 1 p.m. ET.

  • Guy Adami is a contributor on CNBC's "Fast Money." He also is managing director of stockMONSTER.com.

  • Najarian, the "Pit Boss," is cofounder of optionMONSTER.com, a news site for options traders.

  • Finerman is president of Metropolitan Capital Advisors, Inc., a company she co-founded.

  • Founder of EmergingMoney.com

  • Chief Market Strategist for Virtus Investment Partners & CNBC Contributor

Halftime Report