Paul J. Markowski

A good source says that Treasury Secretary Paulson’s comments after today’s market close will outline a G-7 backed joint clearing effort. If that’s true, the channels of credit will open and Libor or some blended rate (Libor or fed funds plus a term & risk premium) will replace central bank rates as the principal lending rate. The ungluing of the market will open bank lending. Consumer discretionary should benefit. Is it inflationary? Let’s deal with that next summer.