Wednesday, October 1, 2008

Trusting the bailout

That there is a crisis is something that basically 99% of the country is taking on trust. We have no direct knowledge of it. We have no indicators. The stock and bond markets don't count, as they are feeding off the same indicators. What we have here is a potential crisis that only a few people in the banking industry and regulatory system can directly perceive. I don't claim it's a fiction, only noting the phenomenon. It's a good (I think) that Bernanke and Paulson are convincing with respect to the existence of the problem, if not its solution. Otherwise, how would we know until it was too late?

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