"9. Foreign Banks Can Cash in Too
Or perhaps the fact that U.S. tax-payers look like they might also end up bailing out foreign banks will end up being a fly in the ointment.
Now, the U.S. bailout looks as if it is going global, too, a move that could raise its cost and intensifyscrutiny by Congress and critics.
Foreign banks, which were initially excluded from the plan, lobbied successfully over the weekend to be able to sell the toxic U.S. mortgage debt owned by their American units to the Treasury, getting the same treatment as U.S. banks.
On Sunday, Treasury Secretary Henry Paulson indicated in a series of appearances on TV talk shows that an original proposal introduced Saturday had been widened. "It's a distinction without a difference whether it's a foreign or a U.S. one," he said in an interview with Fox News.
He's right, in a way. There are no U.S. or foreign mega-banks -- just multinational financial
institutions with headquarters at home or somewhere abroad. If one accepts the logic of the plan at all, it might as well extend to multinationals with foreign-sounding names. The rabbit hole is only so deep, and we're already way down it."
We're going to bail out Middle Eastern sheiks who invested in Citigroup! Cool! This gets better by the second!