I suppose one of the downsides of bailouts is that once you start, you just don’t know when to stop.First, its liquidity injections… then, under the cover of darkness, you throw $50 billion over the wall to Countrywide….then leap dramatically to the rescue of Bear Stearns account holders… now you’re really getting going!
Next up… Fannie and Freddie, only this time things are a little more difficult so you don’t talk too much about how you’re going to do it… Just keep it between you and Congress… particularly those congressmen sitting on the House Financial Services Committee and Senate Banking Committee… you know the ones (except Ron Paul) who get all the financial services campaign donations and special treatment.
Now though you're exhausted, you start to get a bit sloppy… any opportunity to talk to the public and you blurt out some new bailout plan… all you see is financial crisis and ripple effects.
Or so it seems with Treasury Secretary Paulson.
This morning Paulson spoke at the New York Library on “Reinforcing Market Stability” during which he suggested that WE need “additional powers to manage the resolution, or wind-down, of large non-depository financial institutions, such as larger hedge funds, so as to limit the impact of a failure on the broader financial system”
Larger Hedge Funds?
Anyone want to guess what “manage the resolution, or wind down” means?
