RTC-2 effect on US dollar

http://bigpicture.typepad.com/comments/2008/09/baillout-plan-t.html

"The combination of spending $700 billion on soured mortgage-related assets and providing $400 billion to guarantee money-market mutual funds will boost U.S. borrowing as much as $1 trillion"

"traders will again focus on the twin budget and current-account deficits and negative real U.S. interest rates."

"Warning: Your currency may be smaller than it appears in the mirror . . ."

How true.  Let's rush for Jap Yen and Swiss Franc!

More Capital for Banks

http://gregmankiw.blogspot.com/2008/09/more-capital-for-financial-system.html

"First, the government should tell banks to cancel all dividend payments. "

"Second, the government should tell all healthy banks to issue new equity. "

"Banks don't do that on their own because it would signal weakness; if everyone knows the dividend has been canceled because of a government rule, the signaling issue would be removed."

Actually, this makes a lot of sense.  But man, if I am Wells Fargo, why would I want to raise equity?