This is another naked attempt to grab federal insurance - aka a bailout - for their liabilities. Some creative accounting will move the debt from one place to another.
They're probably hoping that with Paulson's planned new superpowers they won't be held accountable.
But given that no one is buying Paulson's beatification - not even Newt Gingrich - the plan may not be the success they're hoping for.
I think that's right. The key is this line from the FT story I quote in my parallel comment:
During the transition period, the Fed will make loans to both entities and to the broker-dealer subsidiary of Merrill Lynch against collateral acceptable for posting either by a bank or a securities firm.
