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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: SouthFloridaGuy who wrote (76192)3/14/2008 8:07:06 PM
From: XBrit  Read Replies (1) of 116555
 
the intentions of the US Gov't, which is to bail out the counterparties.

Yes, the same applied in Northern Rock. There was a lot of reassuring noise from the govt. Eventually the govt removed the $50k cap on account insurance to try to stop the bank run. But until that was made explicit, the public (the counterparties) didn't trust the reassurances and kept queuing up at the withdrawal windows anyway. By the time the govt acted explicitly, the damage was done.

I bet that same thing will happen here.
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