here's what financials and the market needs...why won't the fed and the white house act?

a multi-part fix is needed: is anyone in power listening?

cut rates to levels through the 2 year treasury so banks have a chance to borrow short and invest a little longer to make some money.

give the fed the authority to buy ALOT of aaa paper that everyone says is worth a lot more but is logjamming the system like crazy. the fed can actually make money on this stuff.

have the fha guarantee mortgages once they have been refinanced, which they can be at the shorter rates.

have the treasury take warrants from the monolines in return for the vast majority of the equity stakes.

the treasury makes the implicit guarantees for agencies more than just implicit.

without these important changes, it may be that we will sustain some major bank failures, as with the possibility of the monolines and the reits. maybe then the fed and the rest would wake up. maybe it would even motivate the treasury to be proactive beyond instilling a nice volunteering system that, of course, is totally meaningless.