Paul Krugman, who won this year's Nobel Prize for economics, told CNBC that the Treasury Department's move to inject banks with $250 billion is better than the original bailout plan. He said, "In the last six days this thing has come together with a plan that really does address the critical problem of inadequate capital at the banks (and) addresses the need for guarantees to calm the markets down. We don’t know this is going to work, I wish we were sure, but this is a much better. For the first time I’m starting to feel that policy is really getting some traction on the crisis.” more ›

This morning, President Bush announced that the Treasury Department would take a $250 billion stake in U.S. banks. The money comes from the $700 billion bailout plan, which originally did not include any bank investment. USA Today reports, "The government will temporarily guarantee new loans between banks and offer to insure unlimited deposits in accounts that don't pay interest, such as checking accounts. The new guarantee goes beyond the $250,000 federal insurance that generally applies to bank deposits." (More on the FDIC's temporary liquidity program.) more ›