Back in the USSA
Paulson Says Treasury to Buy Equity in “Broad” Array of Banks
U.S. Treasury Secretary Henry Paulson said the U.S. will buy equity in a “broad array” of banks and other financial institutions to restore market stability and ensure economic growth. (emphasis added)
We’re not just buying banks, we’re buying anything that Paulson wants. Hundreds of billions of dollars of stock to prop up prices. I think that the Treasury might win the tug-of-war with hedge funds on Monday. I don’t think that will be a lasting victory, though. Hopefully the treasury will hold that stock for at least a decade.
Why not just make it illegal for stock prices to drop? Wouldn’t that be just as effective?
