Paulson's Explanation Leaves More Questions

Second-guessing mounts over Henry Paulson's handling of the Treasury bailout fund, along with his answers for where and how the funds are being applied

To hear Treasury Secretary Henry Paulson tell it these days, the most effective use by far of Uncle Sam's $700 billion rescue fund is to rebuild the capital in U.S. banks and other financial companies by taking big equity stakes in those that the Treasury deems strong enough to survive the current turmoil. As the crisis has deepened, Paulson has abandoned earlier plans to buy up the troubled mortgage assets gumming up the balance sheets of banks.

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