Tufar on Finance and Economy

Contemplations on Finance and Economy

The Big Bailout

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A mortgage securities resolution trust is established. Short selling is prohibited until Oct 2. A flight from money market funds was observed, so the plan also insures main capital and not the interest of money market funds deposits.

Though the plan bears moral hazard, it is touted as the laset evil compared to what would have happend otherwwise: a total economic collpase with a total withdrawal of credit and finance.

Written by Nicolæ Tufar

September 20th, 2008 at 12:13 am

Posted in Learn