Dylan Ratigan hosted CNBC's "Fast Money" Thursday night. He started the show with a discussion of the stock market crash today. He mentioned that over the last 10 days the Dow has gone from 11,000 to below 9000. Ratigan says there's a total crisis of confidence in the U.S. financial system. He says the debate now is when U.S. banks will be able to start lending in a rational way. Joe Terranova says the U.S. government needs to step in and be a buyer of futures. Tim Seymour says the plunge protection team is already buying futures.

Jon Najarian says he would love to trade against the government and he hopes they do it. "I don't think it's a good idea because they can't manage anything," he said. Frequent guest Zachary Karabell, a chief economist with Fred Alger Management, said this is a run on the equity markets. "This is the only liquid place to go globally for money on a daily basis," he said.

Ratigan asked the traders what a rational investor in the U.S. stock market should do now. Karabell says rational investors in this environment shouldn't liquidate all of their holdings. "If you don't need the money tomorrow, you don't need to run to your bank or computer and sell," he said. Terranova says we need the market to find stability and we need a convicted buyer in the market. Seymour said unless you have to sell, you shouldn't be selling here. He explained the big sellers are hedge funds with redemptions and big mutual funds. Najarian said investors don't trust the market right now.

Terranova says we are in the process right now of deleveraging and it will stop at some point. "I guarantee you three years from now we will be higher than we are now," he added. Seymour said the market doesn't trust the regulators. He says hedge funds have thrown their playbooks out the window because of things like the short-sale ban.

Ratigan pointed out that General Motors' ( GM) trading action today was the center piece of the American stock market story. Karabell said the S&P downgrad of GM's debt was backward looking. He says new-economy companies like Apple ( AAPL) and Research In Motion ( RIMM) did well today and that's a sign that this market isn't completely indiscriminate.

CNBC's Hampton Pearson joined the crew to discuss the government's possible plan to take a direct equity investment in the banking sector. He said the government is looking at taking stakes in banks to help free up the credit markets. Karabell says the government needs to get involved here. Terranova said they will have to let some banks fail as part of this process.

CNBC's Mary Thompson joined the traders to discuss the latest developments between Citigroup ( C) and Wells Fargo ( WFC) over their merger battle for Wachovia ( WB) . She said Citigroup is now saying it will not be able to reach a mutual agreement with Wachovia.

However, she pointed out that Citigroup says it remains willing to complete its first offer of $2.2 billion for Wachovia's banking operations. She also reported that Citigroup says it has strong legal claims against both Wells Fargo and Wachovia.

Terranova says at the end of this Citigroup will get a settlement. Najarian says Citigroup should walk away and "shut-up" because the American tax payer will win with the Wells Fargo deal.

Jeffrey Harte, an analyst at Sandler O'Neill, joined the traders to discuss the latest news on Wachovia and Citigroup. He said Citigroup will fight the deal. "The best result would have been if they had come to quick terms and raised capital right away," he added. Harte said at the end of the day it's very hard to do a financial takeover. He says the likely outcome will be a merger between Wachovia and Wells Fargo while Citigroup will get a settlement. He says the government is going to do whatever it can to prevent major players like Wachovia or Morgan Stanley ( MS) from going under.

Action Jackson

Strategic investor Dennis Gartman joined the traders to discuss the action in the stock market today. Gartman says it's probably not a bad idea to have the government come in and start buying U.S. stock futures. "My friends who are libertarians will be throwing things at me when I go home, but this has to be done," he said. Terranova says the removal of the specialists has exasperated the momentum trade. Gartman agreed and pointed to the action in General Motors today as an example. Gartman suggested the government should close the market for a few days.

Trades for a Bear

Ratigan asked the traders for some bear market strategies. Najarian says you can play consumer staples like Procter & Gamble ( PG) and Colgate-Palmolive ( CL). He also mentioned he bought Wells Fargo, Wachovia and Bank of America ( BAC) today.

Terranova said he wants to see the stock market plunge so we can get it over with. Seymour says a cash-rich company like Exxon Mobil ( XOM) looks very interesting here. Terranova said he likes MasterCard ( MA), Research In Motion and Potash ( POT) for plays on forced selling from hedge funds.

Short King

Noted short seller Bill Fleckenstein Capital joined the traders to discuss the plunging stock market. He says this is the consequence of having a credit and real estate bubble without any regulation followed. He said the situation got out-of-hand because the financial statements in America are so useless.

"The government can't stop the market from going where it's going to go. And prior interventions didn't work," he added. Fleckenstein says he wouldn't go short the market right here because he doesn't want to get caught in the turn that will come.

This article was written by a staff member of TheStreet.com.

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