If I were the US government, what would I do?
I would have nationalized everything: banks, thrifters, and even home owners (?!). I would be the major shareholder of banks and make them continue to lend money. I would be the major shareholder of thrifters to gurantee all CDOs. I would, well, finance the home owners directly so that they can continue to pay the thrifters and banks.
However, if that is the case, will the stock market will be out of troubles? What will the investors think?