Original post made
by Left of Boom, Another Palo Alto neighborhood,
on Sep 19, 2008
Many on these forums have decried the actions of the Treasury and Federal Reserve. I commend them for acting quickly and decisively to avert an loss of confidence in the U.S. financial systems which would have touched even lively Palo Alto :-) It wasn't pretty and some their actions seemed ad hoc but this week's meltdown would have been a lot worse if they didn't bailout AIG and insure money market funds. People who think that the Federal Government did not have to rescue Freddie Mac, Fannie Mae and AIG don't understand the implications if they failed. Once the retail investor sees that his money market fund is only paying 85 cents on the dollar, 3.5 trillion dollars would flee the market and make this week look like child's play.
In a few weeks, we shall see if the Committee of Three have averted the worst financial crisis in the last 50 years.