Its like Paulsons bazooka, said Nielson, Goldman Sachss chief European economist in London. Its a difficult balancing act -- saying something comforting to the market without committing money and hoping the market will take their word for it.
Default Threat
In 2008, Paulson won powers from Congress enabling a government rescue of Freddie Mac and Fannie Mae -- authority he likened to a weapon whose mere existence made it unlikely it would have to be fired.
After a three-month long plunge in Greeces bonds amid speculation it was facing the threat of default, the euro regions leaders yesterday ordered the country to slash its budget deficit and warned investors they would be willing to defend the country from speculative attack if necessary.