Dylan Ratigan hosted CNBC's "Fast Money" Thursday night. He kicked off the show with a discussion of the news that the Treasury is planning to put to use the Resolution Trust Corporation (RTC) to allow banks to take bad debt off their balance sheets and save the housing market.
Karen Finerman said that in concept and theory, the plan isn't a bad idea. "I am really unclear to the specifics of this plan, but something needed to be done," she said. Pete Najarian says the reaction today was "unbelievable." He pointed out that the
moved 1,200 points today in total. "I love the way Wall Street reacted, but we still don't know the details," he added.
on-air contributor Steve Liesman joined the traders to discuss late-breaking news that
Chairman Ben Bernanke and Treasury Secretary Hank Paulson will meet with the full congressional leadership tonight to discuss possible solutions to the financial crisis.
Jeff Macke said the market reacted today because what the government is doing is bailing everyone out. He says it makes the stock market a rigged game. "The government can make the market jump, but you can't make it fly -- welcome to crazy town," he added. Finerman says that something has to stop the death spiral in the markets, and even though the RTC plan isn't the most "free-market" solution, it could end it. Guy Adami says it could end up being the best trade in history of trading. "The Treasury or Fed could completely score with this whole thing," he said.
Najarian pointed out that
were in a death spiral today. "At least for now, we have a pause," he said.
Adami said to look at
, which made an all-time high today, and
for plays in the financial space.
Ratigan asked the traders what's going on at banks like State Street. Adami mentioned that State Street owns 17% of
Jon Najarian joined the traders to discuss some stocks that look strong despite the financial crisis. He says the volatility in the market has gotten out of line because of the financial and energy stocks. He says certain stocks are working here, such as
For a financial play, he said to look at
Bill Fleckenstein of Fleckenstein Capital Management joined the traders to discuss the controversy around short-selling. He says naked short-selling isn't the problem with the financial stocks, because none of those stocks were hard to borrow. "Short-sellers have been warning about the problems with financial stocks. The real problem is their financial statements were such nonsense," he added.
Fleckenstein explained that the
is changing the rules in the middle of the game because they don't like the outcome. "To change the rules almost overnight on the day before an expiration is almost like market manipulation on the part of the SEC!" he exclaimed.
The traders spoke with Josh Rosner, managing director of Graham Fisher & Co., to discuss the possible government RTC-type plan to save the housing market. Rosner explained that it's more likely we see a funding corporation plan that lends money to the insolvent institutions. "There's a lot of distressed asset money on the sidelines waiting for that to be released largely from Level 3," he added.
He says the best solution is to give financial companies a one-time chance to "open the kimono" and detail their Level 3 assets, and in return we can amortize the losses over some longer period of time so investors can know what they're dealing with. "This will give us a view of when the economy will recover," he said.
Finerman said she has a problem with the government's approach to the short sellers right now. Najarian said keep an eye on the "good banks" like
. Adami said look at
, which hit an all-time high today.
This article was written by a staff member of TheStreet.com.