Jim (cont'd):

Treasury Secretary in hiding Tim Geithner has done it again… in his latest move, clobbering the preferred share holders… he has created the slippery slope that could, the way I see it, allow Bank of America to go to $2... possibly followed by US Bancorp… and even one time Cramer fave but now worried about, Wells Fargo… there is no rhyme or reason to these plans… it is just outrageous… somebody needs to stop this madness… what should Geithner have done with Citigroup… if CEO Vikram Pandit went to Washington hat in hand, which is how Washington is portraying it to the media… then Geithner should have said go back to New York, you are fine… we are not going to worry… we aren’t going to worry… we will make you good on your losses and you pay us back when things are better.

As I have said over and over and over again on this show… you hand the bank a piece of paper with the full faith and credit of the government that gives them what they need to get out of this morass… and they hand you a piece of paper simultaneously in return that forces them to pay you back when things get better… how many times do I have to scream about this forbearance plan… which unlike what Geithner is doing is a plan… the banks need some time to breath… to work things out on their own… we are not giving it to them… there is no doubt among anyone who trades residential mortgage paper that the marks, the prices, the values, the ratings even of many of these bonds are now well below what they could be worth… even if everything goes wrong… these crummy pieces of paper, and I am calling them first lien, particularly the all day… could generate surprisingly bring positive returns if they could only be left alone to pay.. that is what we are up against.

The Treasury is refusing to let things alone… it will not agree to do any of the things that I have advocated on this show… the forbearance plan, that will give the banks a piece of paper that is as good as money, as far as the regulators are concerned, it takes the capital pressure off so they can take their time fixing things… in exchange for a note that says that the government will be paid back eventually… gets around the capital rules… that is what worked in the 1980’s with the S&L’s… it could work again… so why won’t Geithner see reason… why is the government punishing the preferred shareholders and the banks themselves as it did to Citigroup… I think that part of that is that Geithner is endlessly chatting with reporters, who are telling him that the public will not stand for a bailout of bankers… and the rich people who own the preferred shares… remember, he was upset about Lehman Brothers.. he was worried about the moral hazard of helping out the rich, apparently he has still got that in his blood.

See, the reporters are telling him not to help the banks… and he is complying with them… another part of it is the believe that the stocks are saying that things are bad… even as the shorts are doing a lot the knocking down to say that they are bad… so Geithner is saying, listen we got to panic, we got to act… that is what our policy… and I use the term very loosely… comes to right now… we all know it is disastrous… that we aren’t giving the system time or space to breath… it is simply beyond believe… we all now where it is going to lead if the government doesn’t get its act together… you know we have seen this bank confiscation method before… I had to search thru the histories but I have got it… it is when the Bolsheviks looted the Russian banks at the time of the revolution, in the name of the good of the motherland… now that is some game plan to follow…. now, if you don’t believe me… here I want you to do this… you can find the game plan by Googling Bolsheviks and the banks… second entry down… someone take away Geithner’s pc…. because he obviously Googled the site, where else would he get such a ridiculous preposterous road map to national seizure.