Guidance for Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke:

Use the failed securities market to fix the credit crisis.

Banks and investment firms packaged groups of mortgages and loans into “securities” and created a market and traded these securities.
The crisis came when the limited players of this huge dollars market no longer wanted to buy but only wanted to sell these securities.
This could be related to Paulson (and everyone) being lied to by holders of these securities about how much value has been lost. Knowing some participants of a market are not honest is exacerbated by the limited number of participants.
The rest of problem is that the limited players of these markets are not using their own money. They are using the assets of their depositors and a huge and confusing (for those of us not in the business) combination of deposit funds, securities, short term loans, and one of the sources of the problem, margins.
I have seen discussion that it was not real financial losses from these securities that led to the credit crunch as much as it was an accounting rule known as “mark-to-market.”

Mark-to-market means that companies have to report what the fair value of their investments were if they sold them at the current time.

Allow sellers to re-value the securities based on each bid even if they refuse to sell at that price. They could sell, so it is a valid market value but they don’t want to because they think the securities are worth more than that.
Each bid price above previous current value increases the value of the securities for accounting purposes. This means that the financial institution holding the security can use that increase in the value in the complex margin and whatever calculations and more money is available for lending.
If Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke can use my guidance and be experts in the bidding process for this market they could relieve the credit crunch and possibly fix the problem without buying any of these securities. Since the holders of some of these securities are already known to be dishonest about the value of these securities this would certainly be the safest way. Each bid should be targeted to improve the “book value” of the security without it having to become a security owned by the U.S. Treasury or Federal Reserve.
If some securities have to be purchased, using the market would give U.S. (the taxpayers) the best chance of getting securities at a value that would be beneficial in the long term.
Hopefully this approach would even get the rest of the limited players to once again start offering buy bids that could get the market back to a place where it is not the center of a financial crisis.