Will UK rescue banks too?
It's a bit early for definitive judgements about Hank Paulson's plan to rescue Goldman Sachs and Morgan Stanley - sorry I meant the US economy - because today's statement from the US Treasury Secretary is short on detail and elaborates very little on what I published in my note early this morning.
Which is a bit uncharacteristic of this former banker who learned his trade at meticulous Goldman Sachs (that name again) and ended up as chairman of the bulgiest bulge bracket firm.
For us here in the UK the big question is whether what Paulson's proposing makes it more or less likely that our Government will have to launch a similar rescue scheme for our banks.
As of this moment, the thinking in Government is that Paulson's bail out should improve confidence throughout the global banking system, and thus reduce the likelihood that British taxpayers' money will have to be deployed on buying out stinky assets from British banks, or guaranteeing mortgage-backed bonds issued by them, or the other ways in which our banking system could be partly nationalised.
But ministers are taking nothing for granted. The Treasury is working on a contingency bail-out plan, just in case.
Because there is a risk that if Paulson succeeds in shoring up confidence in US banks, the doomsayers could turn their poisonous speculative attention on the economy perceived to be the next most vulnerable - in the way that the investment bank Lehman Bros became the target after Bear Stearns had to be rescued from collapse.
In that sense, the UK would be Lehman, in that the weakness of our housing market looks rather too much like the weakness of the US housing market - or at least it does in the eyes of the money managers who sit in air-conditioned offices all over the world and decide which banks receive their trillions of loose cash.
And if they withdrew more of their cash from the UK banking system than they did during the wholesale run on Northern Rock last autumn, well let's hope it doesn't come to that.
So what more is there to say about the Paulson plan?
Well it is extraordinary how beneficial for Morgan Stanley and Goldman Sachs the rescue package has turned out to be - especially the provision of insurance for investments at money market mutual funds, which should stem the withdrawals of cash from these funds, and reduces the risk that these funds will cease financing the last two bulge bracket firms left standing.
Or at least it helps Goldman and Morgan Stanley in the short term. Though as I implied earlier today, their originate-to-distribute business models - which helped to pump up the credit bubble that has been pricked with such devastating consequences - doesn't look so gleaming right now.
And their once-ginormous profits from servicing private equity and hedge funds, and also managing their own private-equity and hedge money, is likely to wither to something not so pretty: there's a strong likelihood that the hedge-fund and private-equity industries will be crushed under the combined weight of new legislation and the losses that some funds are incurring.
Perhaps Goldman and Morgan Stanley will become smaller simpler firms, suffering from fewer conflicts of interests, acting a bit less hubristically.
Which, you might say, wouldn't be such a bad thing.