The Market
They say on NPR that the problem with the economy right now is a crisis of trust. The analogy was that we are at a McDonald's drive through and there are the two windows. People don't have confidence that if they hand over the money at the first window they will get their burgers at the next one. Thus people don't want to hand over the money, and McD's doesn't want to make burgers unless they get the money, and we are at a stalemate.
The way I see it, what the banks need to do is be really honest. Audit yourselves and figure out what your position really is - how much are you at risk. Then make it public. Even if it's worse than the experts were expecting and the stock goes down in the short run, if the rest of the market believes you they will be willing to lend to you and you will be able to get back to business. Then you start doing better than everybody else, and people will start buying your stock.
And the Truth shall set you free.
The way I see it, what the banks need to do is be really honest. Audit yourselves and figure out what your position really is - how much are you at risk. Then make it public. Even if it's worse than the experts were expecting and the stock goes down in the short run, if the rest of the market believes you they will be willing to lend to you and you will be able to get back to business. Then you start doing better than everybody else, and people will start buying your stock.
And the Truth shall set you free.