Con-tango

Of mice and mousetraps

Mouse on a mission!
Courtesy of bluegreen.blog

Mr. Paulson recalls this foretelling conversation with Ben Bernanke:

“Going back a long time, maybe a year ago, Ben, as a world-class
economist, said to me, ‘When you look at the housing bubble and the
correction, if the price decline was significant enough,’ ” the only
solution might be a large-scale government intervention, Mr. Paulson
said. “He talked about what had happened when there had been other
situations historically.”

Mr. Paulson said he agreed but hoped it
would not come to that. “I knew he was right theoretically,” he said.
“But I also had, and we both did, some hope that, with all the
liquidity out there from investors, that after a certain decline that
we would reach a bottom.”

So, this odd couple, finally decided that holistic sweeping measures needed to be brought to the attention and approved by Congress in order to solve the financial crisis, –the one at a time institution approach was not working.

So, the $1 Trillion question is, are these measures the right ones?