Paulson still has a hard time to force the banks to lend to each other.
I have to repeat myself here: there should be a mandate for the banks to conduct their business as usual during an apparent turmoil time.
On the other hand, what the Fed is doing these days is to keep an out-of-body circulation of the money in the financial system when they buy the CPs at a higher-than-the-market price. I don't know how much they need to do this but eventually, they need to sterilize the liquidity they injected when the credit market revived.
Magnus: China Must Reform or Bust - China's debt markets are looking more and more like the West, circa 2007. And it's not clear the government can intervene as successfully.
1 hour ago