Jim:     Is hope unreasonable, after a day like today?... A day when, at one point, we were down 800 points, before finishing down 370...

Am I wrong in suggesting that you should take some money out of stocks, and put it into a savings account, insured for $250,000 by the federal government, to meet the needs you might have for the next five years... Is that some sort of yahoo thing?...

And no... let me make it very clear, particularly for Today Show viewers... I am not saying to sell everything. I've never said that, I never will say it. I didn't say it on the Today Show, and I won't say it on Mad Money...

And I won't... Why would I say don't sell everything?... Because it would be wrong!

Yes!... Absolutely, positively ride things out if you don't need the money for the next five years... Again, what I said this morning...

But I am telling you... we are now in a "hope for best, but prepare for the worst" situation... And selling enough to be sure you're not in a cash bind is not only prudent, it would be foolish not to, really, given these uncertainties and the fact that a market rally... you might get a better chance (to sell) the next day. It's okay. You know I don't like to do it in one big chunk.

So, tonight... what I'm going to do... It'll be two-fold...

I'm going to tell you how things could go right, with the government's help... but also how you can prepare yourself and your nest egg if things go wrong... which frankly seems in this perilous time to be a realistic worry to this veteran, who does try hard every single night to find those bull markets for you...

I've liked the market since Dow 1300. I'm just trying to make some sense of it, like you.

So how can the government make things better in this country?...

Look, we know the Federal Reserve (rate cuts) won't save us. Are they even involved anymore? I mean, they seem to have taken a permanent intellectual vacation...

We know the European central banks look like they want to destroy Europe's economy in order to save it...

But we do have a hope, and that's the U.S. Treasury, and the question there is how do we get that $700 billion troubled asset relief program to work?

Now, I know a lot of you believe that it can't... So far this has been a "Murphy's Law" market... whatever can go wrong will go wrong... but, on the off chance anyone from the government is listening... and that is, by the way, a very off chance, since it seems that the only people who don't listen to me are the policy makers, and they haven't since I went nuts last year...

I think there's a way for Treasury and the FDIC to cordon off the damage...

None of what I'm about to propose will make stocks a buy right here... Some stocks, yes, but overall stocks, no.

I'm talking about a plan to make sure the Dow doesn't fall 20% from here. That's my worry, okay... If things don't do right, well, then you could have another Depression. If things go right, we have a short and sweet recession. That's okay...

Here's what I'd do if I were coordinating this package at Treasury...

It's a job, by the way, that I'd take... People email me (and ask), Jim, would you take it?... In a heartbeat, but there's probably 399,999,999 people who would have a better shot of getting that job than me (he compares to the 400 million people that are in America), because I'm not liked... and that doesn't hurt my feelings...

First, I'd call in that rogue operator, Sheila Bair, that "confiscator in chief"... of the FDIC... who seems to be adopting a purely Leninist game plan right now... and I'd tell her that, after you seized the two small banks still making toxic loans - and there's no need to name them anymore, because I am not an alarmist - you're done... You're done, Sheila... No more seizures. No more appropriations... and you will tell the world you're done. You get up on your platform, and you say, "I'm done. We don't need to do it anymore." This is the woman who insanely would prefer a plan where the government is on the hook for billions, and Citibank takes over Wachovia for a song... to a plan where it gets bought by Wells Fargo, and because of a change in tax law on the very day she made that decision... Wells won't have to pay taxes for years, thanks to this acquisition... Citigroup has so many losses, it wouldn't help them...

The taxpayers lose nothing under the Wells plan, and the shareholders get something. Bair doesn't like that...

She should be done with her confiscations, because we now have the higher $250,000 deposit insurance limit, and the TARP (Troubled Assets Relief Program) facility. The rest of the bad banks will be worked out with TARP, rather than be closed in shot gunned, and the confidence keep going lower...

That alone should allow money to flow back into the banks. They can raise new money and then start lending, which is the real issue right now, which is what Bank of America is doing tonight...

With the FDIC in line, here's how I'd run TARP, in order to take a second Great Depression off the table...

First, if I were running this program, I'd buy whole loans... the whole mortgages... the whole bad mortgages... the ones that are actually individual mortgages...There's a lot of bad mortgage paper out there, but a lot of it will be hard to buy and locate. Whole loans, like the ones that are brimming on the books at Wachovia and Washington Mutual, will be easy to buy. When the government buys a whole loan, it can immediately end foreclosure proceedings, and begin working out the loan. There are potentially $100 billion of these, and all sorts of exotics. I don't care... pay option arms... those can all be bought very quickly. Those can all be bought in weeks... they can be taken off the banks' balance sheets and taken off our foreclosure pool. Can you imagine how great that would be?

We need to get banks back on their feet so they can start lending again. The Paulson Plan should do this for the Wells Fargo/Wachovia non-shotgun marriage, as well as the Bank of America/Countrywide/Merrill merger which, by the way, Bank of America, again, raising a lot of capital. I think that's a good move by them.

After whole loans, the next step in averting a Great Depression is to buy these toxic CDO (i.e., Collateralized Debt Obligations). These are horribly complicated instruments. They should never have even been allowed. You can't buy the whole trust... the government can't buy the whole CDO. It can buy pieces of it for banks, hedge funds, pension funds, and whatever poor suckers happen to own them...

We'll have to set up a scale by year - by vintage, they call it - because geographically, each CDO is too diverse, where we just try to figure out what they're worth. We hold onto them for a number of years, we hope the taxpayer gets more back than we bought them for, just by sitting on them until they come due... mortgages do come due... Hopefully, the government will put a floor on this stuff so big pension plans and hedge funds can come in off the sidelines and buy them, knowing they can always flip them back to the government.

That's a win for us... something that takes us one step further away... again, I want to keep emphasizing... we've got to take this Great Depression off the table... we've got to!

We can do this right!... The government can do this right... it can stop foreclosures with this plan and stop home price depreciation...

Despite protestations by Congress and the media that there's no quick way to figure out prices for any of this stuff... that's just untrue! Untrue historically, untrue empirically... I think we'll be able to pull this off relatively quickly... I think six months... In six months, we can get a lot of these done...

And, in six months, when the Great Depression Part 2 is off the table... well, then all I can say is... "hallelujah!"...

Is that fast enough to free up much-needed capital? No... Does it leave some very big bankruptcies on the table? Yes... Does it make stocks a buy right here? No...

But the bottom line is...