Ok, so here's the deal on Paulson. We are living through a time when the wall between perception and reality has broken down. Investors, consumers, businesses, the media etc anticipate terrible news and in responding to this in such a coordinated way create and perpetuate the reality they are most scared of. It's like shouting 'fire' in a crowded ballroom: people are panicking and getting crushed in the stampede.

This scenario both exonerates and indicts Paulson. He too is responding to the market and trying to be pragmatic - which would be the correct response under 'normal circumstances'. But he has seriously miscalculated the level to which his actions are under the microscope and the ease with which the 'perception' of weakness can suddenly become 'real' market weakness. That's what happened yesterday. I can't advocate placing PR over pragmatism but he needs to pay more attention to perception because in this new world order there is no longer the same divide between what we fear and what we experience.