Politico: Yap trap: Pols talk, markets dive
2/24/09
It was a perfectly reasonable question, and on the surface it seemed like a perfectly reasonable answer. But when Senate Banking Committee Chairman Chris Dodd went on Bloomberg TV Friday and mused about the possibility of bank nationalization, panicked investors sent the Dow plummeting a hundred points in the next hour.
Whoops.
Dodd’s casual remark and the not-so-casual consequences it caused were among the most vivid examples of a new Washington phenomenon. The city’s sudden status as the de facto world financial capital means that briefings and interviews that once would have passed with a yawn can create instant terror on Wall Street and Main Street alike.
[...]
“Sen. Dodd’s ‘nationalization’ comment wins the Oscar for most irresponsible remark by a U.S. official,” said Tony Fratto, a financial spokesman at the White House and the Treasury Department during the Bush years. “The last thing markets need is to have officials speculating about hypothetical policy choices.”
This may provide some insight on the topic: