Cowards of Congress and Foreign Central Bankers threaten Paulson's plans

The headline of the online Financial Times this morning, here, reads "Fears emerge over $700 billion rescue", but for the best analysis I have found follow this link to Resource Investor, here, their headline is the "The beginning of the end game" and some of the pithier points are these: "But at the same time the balance sheet of the Federal Reserve has now been loaded with so many assets of dubious value that the Fed itself may soon no longer be solvent; hence the Fed’s request for a recapitalisation by the Treasury. This means that the U.S. Central Bank has lost its independence, since it now survives on a life-line from the U.S. government.".............. "Thus, a formal default of AIG would have exposed European banks’ large gap of regulatory capital, with possibly devastating effects on their ratings and market confidence. Which explains why AIG’s problems had sent shock waves through the share prices of European banks. Thus, the U.S. Treasury has saved, inter alia, the European banking system. However, as AIG is to be liquidated, European banks will have to quickly shore up their regulatory capital.".........(Read my post of last Wednesday on this very point titled "US Taxpayers reprieve the Euro" here.) "The key problem on this side of the Atlantic is that the largest European banks have become not only too big to fail but also too big to be saved. For example, the total liabilities of Deutsche Bank (leverage ratio over 50!) amount to around 2,000 billion euro, (more than Fannie Mai) or over 80 % of the GDP of Germany. This is simply too much for the Bundesbank or even the German state to contemplate, given that the German budget is bound by the rules of the Stability pact and the German government cannot order (unlike the U.S. Treasury) its central bank to issue more currency. The total liabilities of Barclays of around 1,300 billion pounds (leverage ratio over 60!) surpasses Britain’s GDP. Fortis bank, which has been in the news recently, has a leverage ratio of "only" 33, but its liabilities are several times larger than the GDP of its home country (Belgium)."...... I trust these quotes will make the whole item worth reading and concentrate the minds of those who believe there remain any easy answers. The surge in the oil price yesterday evening European time of some $22 per barrel indicated clearly to me that somebody is playing hardball. The costs of the present crisis should best solved with national taxpayers bailing out the banks domiciled in their own nations - if the ECB manages to get all the nations of the EU to salvage the particular banks involved seems to me a very interesting but very much open question. Put more directly will the Banque de France step forward to help save the Bundesbank and will the latter step in to stave off financial meltdown in Spain, Greece or Italy. Britain, with its pound sterling, knows the answer to that latter question as the article in Resource Investor concludes: "The authorities in the UK and Switzerland –- who cannot rely on the ECB – can only pray that no accident happens to the giants they have in their own garden." I have faith in the Swiss, but will Gordon Brown even begin to face reality in his speech today and give warnings about Britain's massive EU contributions following yet another year of the EU accounts being not being signed off by their auditors? And will he merely offer more gimmicks such as free computers and internet time to school kids as trailered by the BBC?