September 20, 2008
The State of Play
Posted by David Zaring

It's all about the bailout now, but:

  • Can AIG get out of its unfavorable deal with Treasury?  Steven Davidoff wonders.
  • What do we owe Lehman and Merrill, who would have waited for the bailout of everyone, if they it knew it was coming?  Larry Cunningham asks.
  • I'm still wondering how the Treasury Department could announce an insurance plan for money market funds.  It turns out the basis is another incredibly broad grant of Depression Era authority, which created the Emergency Stabilization Fund:
    • The legal basis of the ESF is the Gold Reserve Act of 1934. As amended in the late 1970s, the Act provides in part that "the Department of the Treasury has a stabilization fund …Consistent with the obligations of the Government in the International Monetary Fund (IMF) on orderly exchange arrangements and an orderly system of exchange rates, the Secretary …, with the approval of the President, may deal in gold, foreign exchange, and other instruments of credit and securities."
    • That "other instruments" is broad language indeed.  I assume the use of this foreign fund to insure domestic money market accounts is unprecedented, though - underscoring, in my view, the need for some principles on this stuff.

| Bookmark

TrackBacks (0)

TrackBack URL for this entry:

Links to weblogs that reference The State of Play:

Recent Comments
Popular Threads
Search The Glom
The Glom on Twitter
Archives by Topic
Archives by Date
January 2019
Sun Mon Tue Wed Thu Fri Sat
    1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30 31    
Miscellaneous Links