Credit Check Induces Panic Selling

Stocks took a tumble after Treasury Secretary Henry M. Paulson Jr. said yesterday that investment banks might be required to provide more information on their dealings in return for access to money from the Fed. Note that Paulson didn’t go as far to recommend the “R” word – Regulation.

But apparently any possible intrusion into the investment banking world merits panic.

This is all very rich, considering the financial services industry has been claiming for years that any regulation would freeze up the markets by drying up capital. Considering the scope of the credit crunch, they seem to have done a fine job of doing that all by themselves.