Brian27

Will Paulson's Bailout Be the Last Request for Money?

"Prior to the establishment of the Federal Reserve in 1913, the United States would periodically experience events that are often referred to as "financial panics"."

And since 1913 the United States has not periodically experienced events that are often referred to as "financial panics"?

Maybe disbanding the fed and following a money growth rule would be a better policy.

Let the treasury deal with the asset swaps of government treasuries for cash flow impaired mortgage assets. Holding treasuries will improve tier 1& 2 capital ratios of banks immediately and reduce the yield spreads on 3 month CD’s and treasuries. What is important is the price paid for the impaired assets. A fair price can be constructed from expected loss and known loss ratios. If priced correctly the treasury department should have an expected loss of zero on the impaired assets (some may want to set prices that generate and expected profit.)

As for regulator’s they are like traffic cops. They always show up after the accident has happened. I do not believe any new regulatory regime will change this fact.