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October 9, 2008

The Paulson Problem

Here is the Paulson Problem in a nutshell:

• If he doesn't speak, people panic because nothing is improving in the financial system
• If he does speak, people assume things are getting worse in the system, or that Paulson is doing a 180 on a prior plan (like TARP-to-equity-injection).

Paulson is rapidly losing whatever credibility he once had.

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