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DOES HANK KNOW SOMETHING WE DON’T?

The disclosure Friday afternoon that the government has a plan in place to save banks such as Citi is both reassuring and alarming.   In October, Paulson disclosed that the government was prepared to deal with the failure of a “large” financial firm.  Within weeks full fledged panic had set in as we saw Lehman, Wachovia, and Citi all nearly fail within weeks of one another.   It’s comforting to know that the government is not going to let a vital institution fail, but are they simply warning us that there are other failures down the line?  Do we need to be worried about a Bank of America, JP Morgan or Wells Fargo in the coming 6 months?   I don’t know, but this Targeted Investment Program sounds like more of a preemptive shot than anything else.  At least they’re starting to be somewhat proactive….

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