The Feds made yet another historic move in gathering the largest bank CEO’s to a meeting in Washington. The meeting was to go over details of the latest government move.

The Feds will purchase preferred stock in the nine largest banks and expand from there. Several of the banks were Citigroup, Inc., Wells Fargo & Co., JPMorgan Chase & Co., Bank of America as well as Morgan Stanley.

Not included in the statement was Goldman Sachs but I’d bet $1 that they will receive some of the initial money as well. Due to Treasury Secretary Paulson’s history with them and working on the rescue plan, it is probably a sensitive subject for the Feds. I think you will see the money quietly infused and announced after the fact. All of the named banks can use the capital but the next wave of banks who receive the help will be the ones really needing the assistance.

Some more details of the rescue plan were disclosed including FDIC insuring all non interest bearing deposits. Large companies have been severely challenged in moving funds around trying to figure which bank is most healthy. Smaller regional banks welcome this move.

Additionally, the Feds will now insure all bank to bank loans for 3 years hoping to help the credit gridlock. The Feds will be charging an insurance premium to the banks.

This current credit environment will go down hopefully as the most financially historic challenges ever to hit our capitalist economy even beyond the Great Depression. We are fortunate that we have some who did learn from history.

Politically speaking, I think all of congress should be booted out and lobbyist outlawed to ensure they get our message. Members of Congress now attract tremendous special interest money and power the longer in office. Limiting terms and banning lobbyists may get the majority of them acting in our best interests instead. Make them come out in the real world to live for awhile.

Americans biggest challenge now is fear. Fear of too many things. One of our biggest virtues is our mental toughness. We do what needs to be done and I am proud to be an American.

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