A Systematic Trader's Journal

Paulson cannot be allowed a blank cheque By George Soros  Published: September 24 2008 20:28 - Last updated: September 24 2008 20:28 Hank Paulson’s $700bn rescue package has run into difficulty on Capitol Hill. Rightly so: it was ill-conceived. Congress would be abdicating its responsibility if it gave the Treasury secretary a blank cheque. The bill submitted to Congress even had language in it that would exempt the secretary’s decisions from review by any court or administrative agency – the ultimate fulfillment of the Bush administration’s dream of a unitary executive. Mr Paulson’s record does not inspire the confidence necessary to give him discretion over $700bn. His actions last week brought on the crisis that makes rescue necessary. On Monday he allowed Lehman Brothers to fail and refused to make government funds available to save AIG. By Tuesday he had to reverse himself and provide an $85bn loan to AIG on punitive terms. The demise of Lehman disrupted the commercial paper marke...

Seems like we can avoid another scene like that in AIA Singapore again.  No rate cut was made. The Federal Reserve is readying a loan of $85B to AIG, in exchange for an 80% stake in the insurer. Barclays is buying some of Lehman's assets, where the US bankruptcy judge approves "automatic stay" status for JP Morgan to continue providing trade-clearing advances to Lehman's broker-dealer unit. WAMU is also up 16% due to talks of fresh interest from a large institution.  Thus, has all these events salvaged the turbulence in Asia, and create a positive spur of sentiment for the international markets? Let's take a quick snapshot in early Asia and US closing markets in the morning. All Ordinaries  Australia 4,843.4 8:28AM SGT  43.600 (0.91%) Nikkei 225 Japan 11,830.34 8:28AM SGT     220.62 (1.90%) KOSPI  Korea 1,425.59 8:48 AM SGT   37.84 (2.73%) S&P 500 US 1,213.59 20.89 (1.75%) DJIA 11,059.02  141.51 (1.30%) Nasdaq 100 1,724.08   18.62...