$700 Billion Financial Bailout Plan Still Evolving: Part 2

Paulson’s TARP (Troubled Assets Relief Program) turnaround – he originally dismissed the bailout package as a recipe for “failure” -may demonstrate that his revised response is a gesture to public opinion.  At present, the bailout also seems geared more to help Main Street than Wall Street, a strategy that will play well with the general population.  Approximately half of the bailout money has been spent on emergency investments in banks and other institutions with the purpose of reviving the regular lending and borrowing that is vital to the nation’s economic health. According to Alan Ruskin, chief international strategist at RBS Global Banking and Markets, “This hasn’t done the Treasury’s credit a world of good.  Basically, they found that the market would applaud direct capital injections more easily than understanding the complexities of reverse auctions to buy more assets, so it’s a pragmatic choice.”

Who’s right?