Comment: Hank does it the Goldman way but the problems remain

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While that has gone some way to reassuring the markets - these two enormous institutions with $5.3trillion of US mortgages under their guarantee will not go under - it does little to assuage underlying unease. Quite the reverse: things must be awful for the US Treasury Secretary to do what he did.

Paulson may have avoided sparking a global economic collapse almost too awful to even contemplate - such is the size of Fannie and Freddie and such is the position they occupy in the American psyche - but whether it is enough remains to be seen. There is daring in the plan, not just in the decision to go with it in the first place but also in the detail.

It carries all the hallmarks of the cleverly structured, no-holds barred package for which Paulson's former employer is famous. But when Paulson left Goldman Sachs he could not have imagined he would be behaving in such a radical fashion in government.

However, a President bereft of ideas and popularity and determined to end on a high, plus a worsening domestic economic situation have seen him intervene.

This is America getting a grip and taking charge - and for that, banks around the world that have so much of their money tied up in the US mortgage industry, and their customers, must be grateful. As to the ultimate bill for the US taxpayer of all this - that's for John McCain or Barack Obama not George Bush.

There is a presumption that the downturn is entirely due to the credit crunch. If that were the case, then Paulson's gesture could be the answer.

But while it might restore liquidity, it does not do anything about rising oil and commodity costs and inflation in China pushing up prices in Wal-Mart.

Those show no sign of going away - and they will not be solved by a shored-up Fannie and Freddie giving people the means to borrow and run up debts again.