Paulson: A Stabilized Financial System?

As reported on Bloomberg - "Paulson's Shift on Bailout Plan":

• Credit markets stabilizing.
• Interbanking credit markets are not frozen.
• The system has been stabilized.
  
• Original bailout plan was a good plan.
• What changed was our understanding of the magnitude of the problem.

Did we hear all of this right? Do they understand the magnitude of the problem now or will their understanding change yet again?

Perhaps Sarah Palin and Joe the Plumber could advise Bush on this matter to help shape and direct this financial policy.

We're definitely not in good hands. The endless incompetence of this administration tells us this every day. I guess if we were good American patriots, we would just keep our mouth shut in regards to these problems. Sorry.

Bloomberg - Reaction to Housing Starts / Building Permits Report

The Fed Steps Into The Commercial Paper Market

The Fed announced this morning, October 7, 2008, that they will enter the commercial paper market:

"... Fed will purchase three-month unsecured and asset-backed commercial paper directly from eligible issuers"

The Fed hopes this latest round of measures will help to liquidate the frozen business credit markets as many small businesses are increasingly feeling the pain of not being able to obtain business credit.


The short-term effects of the myriad of measures taken by the Fed over the past six months will undoubtedly begin to filter into the market over the next year. What will the long-term effects of pumping this unbelievable amounts of liquidity into the market?