As several have commented on the posting below, there is now more detail on the bailout package details.
I'm not sure how much value there is in analyzing all these moves and wrinkles, in part because I think the whole situation is just too complicated to predict, and partly because I doubt we are being entrusted with the whole truth.
Still, there's some interesting stuff here.
Joint Statement by Treasury, Federal Reserve and FDIC
Today we are taking decisive actions to protect the U.S. economy, to strengthen public confidence in our financial institutions, and to foster the robust functioning of our credit markets. These steps will ensure that the U.S. financial system performs its vital role of providing credit to households and businesses and protecting savings and investments in a manner that promotes strong economic growth in the U.S. and around the world. The overwhelming majority of banks in the United States are strong and well-capitalized. These actions will bolster public confidence in our system to restore and stabilize liquidity necessary to support economic growth
Translation: Boilerplate all the way. Nothing interesting here, except that it reveals a bias that economic growth will return once "liquidity is stabilized." I hold a different view. I happen to think that we were living on borrowed money and borrowed time. I do not believe that we can return to "the way it was" by simply restoring liquidity.
Last week, the President's Working Group on Financial Markets announced that the U.S. government would deploy all of our tools in a strategic and collaborative manner to address the current instability in our financial markets and mitigate the risks that instability poses for broader economic growth. This past weekend, we and our G7 colleagues committed to a comprehensive global strategy to provide liquidity to markets, to strengthen financial institutions, to prevent failures that pose systemic risk, to protect savers, and to enforce investor protections.
Translation: Okay, this is positively Orwellian in some places. I would dare say that "protecting savers" would include not forcing them to bailout rich Wall Street banks with direct subsidies and future inflation. Further, savers would certainly enjoy some free market interest rates (lots higher than the Fed's fictitious rates) that are higher than inflation. Allowing savers a positive return would be the best way to "protect savers," while negative rates would reward banks and speculators. Virtually everything done by the Fed and the Treasury to date has been at the pronounced deficit of savers.
And the part about "enforcing investor protections" is thoroughly duplicitous, given the recent mid-flight rule changes that the SEC has dropped on the market lately (e.g. shorting rules). And I won't even mention the options backdating scandal and other well-documented abuses that were never investigated or concluded.
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