Dow Jones industrials went up 400 points today following a report that the federal government may create an entity to absorb banks' bad debt.

It's reported that Treasury Secretary Henry Paulson is considering the formation of a vehicle like the Resolution Trust Corp. that was set up during the savings and loan crisis of the late 1980s and early 1990s.

"It's going to take a lot of the bad debt off the balance sheets of these companies," said Scott Fullman, director of derivatives investment strategy for WJB Capital Group in New York, commenting on the possibilities of an entity akin to the RTC. "It could alleviate many of the pressures causing the credit crisis, he said, and reopen credit markets." But Fullman noted, "the devil's in the details."

www.MortgageAdvisor.info & www.GregZaccagni.com

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