Some light in the gloomy global financial picture.

[Cronopio]

Looks like Gordon Brown is saving his political ass by not operating like a politician for once, and doing the right thing.

http://www.ft.com/cms/s/0/a3fb9670-951c-11dd-aedd-000077b07658.html

Brown says UK leads world with rescue

By Alex Barker, Political Correspondent

Published: October 8 2008 11:00 | Last updated: October 8 2008 14:52

Gordon Brown claimed on Wednesday he had “led the world” with a plan to part-nationalise Britain’s biggest banks in order to avert “unacceptable” damage to the economy by going to the “heart of the problem”.

Speaking at a press conference at Downing Street, the prime minister stressed it was “a tough deal for everybody but the right deal for the British public”. The radical restructuring of the banking system aims to kick-start lending over the short and medium term.

In return for injecting state capital into banks, Mr Brown said he would have to be “satisfied” on behalf of the taxpayer over executive pay, dividends, supervision and flow of lending at participating banks. “There are strings attached and conditions to be met,” he said.

...

But Mr Osborne warned the government to impose stringent conditions on any banks choosing to take up state capital. “I think people would be shocked if bonuses were being paid to the banks that take this money,” he said.


And some signs that Paulson might also be finally seeing the light. A lot depends on how he implements this.

http://www.ustreas.gov/press/releases/hp1189.htm

Specifically, the EESA empowers Treasury to use up to $700 billion to inject capital into financial institutions, to purchase or insure mortgage assets, and to purchase any other troubled assets that the Treasury and the Federal Reserve deem necessary to promote financial market stability. The new law also gives the Federal Reserve the authority to pay interest on reserves, and temporarily increases FDIC and NCUA deposit insurance from $100,000 up to $250,000.

[aquart]

1. "Shocked"? British understatement. Go with "enraged."

[Kaleko]

2. I saw Gordon Brown's speech last night.

The co-ordinated efforts to inject capital into banks to prevent more dominoes from falling in ever-widening circles are encouraging. This won't be a repeat of the 1930 Great Depression where bankers made the mistake of tightening the money supply at the crucial points.

This will be a different animal, but still scary as hell.

[On the Road]

3. Nationalization is an Extreme Measure

but it might be the best one in this case. Might even cost less than picking up the pieces.