Wednesday, November 12, 2008

Government doing what it does best...

...creating more volatility, causing participants to scurry about moving resources in a flurry of activity.

In this case, its the Treasury department and Mr. Paulson. I will repeat: proximity to governmental invervention and regulatory processes is the largest risk factor as well as largest assets companies have. The U.S. government has ensconced themself as by far the most important player in the development of the financial world going forward. The most important, most competitive market in the world right now is access to U.S. officials.

Paulson says troubled assets will not be purchased
Wednesday November 12, 12:40 pm ET
By Martin Crutsinger, AP Economics Writer
Paulson: bailout program won't purchase troubled assets; focus remains on financial markets

WASHINGTON (AP) -- The government has abandoned the original centerpiece of its $700 billion rescue effort for the financial system and will not use the money to purchase troubled bank assets.
Treasury Secretary Henry Paulson said Wednesday that the administration will continue to use $250 billion of the program to purchase stock in banks as a way to bolster their balance sheets and encourage them to resume more normal lending. He also announced that the administration was looking at a major expansion of the program into the markets that provide support for credit card debt, auto loans and student loans.

Paulson said 40 percent of U.S. consumer credit is provided through selling securities that are backed by pools of auto loans and other such debt. He said these markets need support.

"This market, which is vital for lending and growth, has for all practical purposes ground to a halt," Paulson said.

On the issue of using the $700 billion bailout package to provide help to ailing auto companies, Paulson said the administration preferred an approach that would accelerate support to that industry from other legislation Congress passed this fall.

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