TARP Could Cover the Regional Banks

We have a crisis in regional banks, a bad one. We have a bunch of banks with their bonds trading in the 50s -- that's right, the 50s -- which has me very concerned, and should have the FDIC concerned, too, if they look at such things, because they are great measures of who is about to be in trouble next, or is in trouble now.

That's why it is really important that Key (KEY - commentary - Cramer's Take), Sovereign (SOV - commentary - Cramer's Take), Regions (RF - commentary - Cramer's Take), First Horizon (FHN - commentary - Cramer's Take), Fifth Third (FITB - commentary - Cramer's Take), Comerica (CMA - commentary - Cramer's Take) and Nat City (NCC - commentary - Cramer's Take) all go to TARP as soon as it is open for business. I hope these banks don't say, "We don't like the stigma." I hope they don't say, "This is a wait-and-see situation." I hope they take their whole loans, their bad whole loans, both fixed and floating, and get them off the books. They will be able to survive and even thrive, even with stock given to the government.

These are the kinds of companies that TARP is made for. I don't know their CDO exposure, but I know they are loaded to the gills with problem mortgages, and TARP is truly their only hope.

Once they sell the bad loans, they can be bought by a Goldman (GS - commentary - Cramer's Take) or a Morgan Stanley (MS - commentary - Cramer's Take) that needs deposits, or they can go it alone.

That's just terrific. It is one of the first good things that could come of this deal, and it needs to be done tomorrow when TARP starts.

Random musings: Fed buys commercial paper from issuers, but not from holders. Another not-well-thought-out plan that Bernanke gets a kiss from the media for, once again. This guy is charmed! ... How in heck can people be ignoring Royal Bank of Scotland (RBS - commentary - Cramer's Take)? This is a huge, huge bank, and people should not be yawning about this, any more than they should be yawning about Hypo. ... Run to read Tony Crescenzi's piece on the market clamoring for rate cuts. He is so right, and yet all I hear from others is that it doesn't matter. You must read Tony. You must. He is so right. Meanwhile, it should be obvious that the market has no faith in Bernanke whatsoever. ... The covering from down 350 is obvious -- shorts are still worried about the coordinated rate cuts plus the bounce off of yesterday's lows give or take 100 Dow points.

At the time of publication, Cramer was long Goldman Sachs and Morgan Stanley.

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