Good news for the banks

Paulson told reporters in Washington yesterday that legislation Congress passed last week to rescue financial institutions gave him broad authority that he intends to use, beyond just buying mortgage-related assets on banks' balance sheets. He indicated that an option available may be boosting companies' capital with cash infusions.

``It is the policy of the federal government to use all resources at its disposal to make our financial system stronger,'' Paulson said. ``We will use all of the tools we've been given to maximum effectiveness, including strengthening the capitalization of financial institutions of every size.''

This is good news for the banks. It is clear that the Treasury wants and needs banks to be profitable. This is an absolute necessity if we want our economy to recover. It seems a superb investment theme.

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George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977