TARP IS DEAD, LONG LIVE TARP....Henry Paulson has apparently given up completely on buying up troubled assets, the original rationale for the $700 billion bailout fund, and instead wants to inject yet more capital into the banking system and expand the bailout program to other sectors:

U.S. Treasury Secretary Henry M. Paulson Jr. said he wants to expand the government's $700 billion bailout program to include credit card, student loan and car loan companies, part of an effort to ensure that households and businesses have access to a broad array of borrowing options.

...."This market, which is vital for lending and growth, has for all practical purposes ground to a halt," Paulson said.

But has this market ground to a halt because of capital losses among the lenders, or has it ground to a halt because there's no demand for new loans among consumers? If it's the latter, all the capital injections in the world won't make any difference.

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• Chart of the Day - 11.12.2008
• Rumors and Reports of Rumors

Kevin Drum

Political Blogger

Kevin Drum is a political blogger for Mother Jones. For more of his stories, click here. RSS | Twitter