Reverse gears please Mr Rudd

Not happy that the government has stuffed up the financial markets to the extent it has, its now looking at extending government guarantees even further:

TREASURY officials are working on options to extend the Government's bank guarantee to some cash management funds under which the funds would open their books to prove that their assets are bank quality.

Regulators then would assess whether the bank deposit guarantee should apply to the funds, The Australian reports.

The plan could provide an acceptable compromise to Kevin Rudd's reluctance to extend the $1.2 trillion bank deposit guarantee to market-linked investments and offer greater security for cash management trust investors.

Expect more market distortions and more pleas from investors to extend the guarantee to *their* investment. I fear this government is not going to learn The Lesson until one of the guaranteed financial institutions goes bust and the taxpayer has to pick up a billion dollar bill.