What Else Can Be Done?

Just one day after the government announced it was taking ownership stakes in 9 banks the Dow plunged lower capping a tough Wednesday for Wall Street.

It was only yesterday when the government introduced details of its historic plan to inject $250 billion into the battered financial services sector. The plan also provides federal guarantees on new bank debt for three years and FDIC insurance for non-interest bearing accounts, mirroring measures taken by other members of the Group of Seven nations.

Are Ben Bernanke and Hank Paulson running out of options?

Former Federal Reserve Governor Wayne Angell says the Fed has the power to make the stock market attractive and he has a few recommendations. Specifically, he thinks two things need to happen.

Step 1: Treasury Secretary Paulson needs to admit he made a mistake when he took Freddie and Fannie shareholders to zero. And Angell expects that step will be taken. It ruined the government sponsored enterprise which we’ve always used to subsidize housing.

Step 2: The Fed should take the funds rate so low that the highest earning capability comes from dividend paying stocks.

“I think the lack of confidence in the markets is due to honest mistakes that have been made,” Angell concludes. “But I don’t think this is the time for scapegoating,” rather we need solutions.

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Trader disclosure: On Oct.15, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Seymour Owns (AAPL), (MER), (MSFT); Seygem Asset Management Owns (RIO); Seygem Asset Management Is Short (PBR); Najarian Owns (AAPL) And (AAPL) Puts; Najarian Owns (C) Put Spread; Najarian Owns (GS), Is Short (GS) Calls, Owns (GS) Put Spread; Najarian Owns (MS) And (MS) Puts And Is Short (MS) Calls; Najarian Owns (NOK), Is Short (NOK) Calls, Owns (NOK) Puts; Najarian Owns (RIMM) Call Spread; Terranova Owns (AAPL), (EXM), (FCX), (FTO), (MA), (NOV), (POT), (X), (VLO); Terranova Owns December Dollar Index Futures;

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

Terranova Is Chief Alternatives Strategist Of Virtus Investment Partners, Ltd.; Virtus Investment Partners Owns More Than 1% Of (ABD), (ARE), (BIG), (CNW), (OFC), (DLM), (DRH), (DLR), (EPR), (EXR), (FL), (SLB), (LNET), (MAC), (DBC), (DBV), (SKT), (UA), (BLV), (VV), (CLB), (GWX), (IGE), (FSMXX); Virtus Investment Partners Owns Seagate Tax Refund Rights; Virtus Investment Partners Owns Seagate Technology Tax Refund Rights; Virtus Investment Partners Owns More Than 1% Of Shares Of Incitec Pivot Ltd.; Virtus Investment Partners Owns More Than 1% Of Shares Of Essex Property Trust Inc.

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