Here come the cavalry

Today, the Federal Reserve will become active in the commercial paper market in an effort to provide liquidity and bolster confidence.

Also, the TARP bank investments are coming out today. Each company will announce them on an individual basis so as not to create a list of haves and have nots. It's probably a bad choice to let banks reveal the information themselves. It doesn't help anyone -- it makes conditions murky. We need clarity, not obfuscation.

I wonder if the companies that receive assistance will not wind up being a hit list of companies in critical condition -- that these programs may in fact have the opposite of their intended effect.

As we know, the problem here is one of confidence. We have seen plenty of companies assure us of their balance sheet strength and credit worthiness one day and go belly up the next. If the market decides these companies that receive direct government assistance have solvency risk, the bailout programs could run into serious jeopardy.

The treasury investment program has been chosen as the primary rescue mechanism. The Fed has never been so far out of bounds mucking about in capital markets. If the companies that receive assistance do not hold today, we could spiral lower.