With global plaudits still ringing in his ears for the rescue of US mortgage lenders Fannie Mae and Freddie, another monster has landed on his desk.
Lehman Brothers, the fourth-largest US investment bank lost half its value in trading on Wall Street yesterday as talks over a rescue bid from the Korea Development Bank were thought to have broken down.
Lehman has been teetering on the brink all year because of its huge exposure to US real estate. What's worrying Wall Street most is the $30bn it has tied up commercial property, a sector that's unlikely to benefit from Paulson's injection of funds into domestic mortgages via Fannie and Freddie.
There have been a string of closures among smaller US regional banks this year (although depositors have been protected) but the US authorities moved quickly earlier this year to prevent investment bank Bear Stearns going bust because of the knock-on effect this would have had on other big banks and also the foreign investors who have been bailing out Wall Street.
In Bear Sterns' case, rival JP Morgan was persuaded to play the fairy godmother.
Will anyone ride to Lehman's rescue? And does it matter if they don't?
Lehman is bringing forward its third quarter earnings announcement today to try to reassure the markets but the earnings on their own won't allay fears about the debt on its books.
And Reuters reported this morning that talks with KDB, backed by the Korean government, might be back on, this time with the Koreans looking for a controlling stake.
Were this to happen -- a Far Eastern bank controlling a Wall Street giant -- it would be almost as big a shock as Lehman going bust.
The Dow Jones index fell sharply yesterday on the Lehman news, bringing the Fannie bounce to an abrupt end, and the S&P Index of smaller companies (very large companies by UK standards) also fell sharply, suggesting that there may be other US companies in trouble.
Markets in Asia responded less dramatically, indicating that, unlike Fannie and Freddie whose demise would have had global implications, this is seen as primarily as US problem.
Paulson will be hoping his new best friends the Koreans ride to the rescue.
Steve Jobs bounces back with cheaper iPods
The renaissance at Apple since founder Steve Jobs returned to head the company has been nothing short of remarkable and yesterday (Tuesday) he bounced out of the traps again to announce he was cutting the price of the 16GB and 32GB versions of the iPod touch by $100.
This is the iPod that does everything an iPhone does apart from make calls (and who does that these days)? Some iPhones were cheaper so it's an obvious enough move.
But it also signals Jobs' determination to make Apple a volume brand. The price cuts are timed for what manufacturers fondly hope will be the Christmas buying season.
Jobs also appeared on good form, allaying fears that his pancreatic cancer had returned (one news service ran an obituary of him by mistake the other week).
The focus on Jobs' health is seen by some as distasteful but to a large extent Jobs is Apple.
The company obviously has hordes of capable people running it and working for it but he's the inspiration.
With Apple now one of the largest US companies (for a short spell in August its market value overtook Google) it's unusual for one person to be so dominant, even in a country which usually combines the roles of chairman and chief executive.
Jobs needs to identify a successor for the good of the company. But is there another Steve Jobs out there?
Opec acts to shore up oil price
This would have seemed a pretty unlikely headline a couple of months ago as the oil price soared to $147 but that's what the cartel of oil producers is doing.
It's going to curb what it calls "over-production" by 520,000 barrels a day to prevent the price falling below $100, it hopes.
Last night the price of US crude oil rallied to $104 from $102. At one point the price of Brent crude oil fell below the magic $100.
520,000 barrels a day is just about the amount by which the Saudis agreed to increase production a few months ago after a plea from George Bush, so it's really business as before.
When the oil price soared beyond $140 there were accusations, hotly denied, that speculators, particularly hedge funds, had driven the price skywards.
Since then the global economy has slowed a bit and the US dollar has risen a lot (oil is priced in dollars so a fall in the dollar helps).
But it looks like Harry Hedge Fund (the Daily Mail's useful description) had his fingerprints all over this one.
UK retailers soldier on
European markets opened lower this morning (Wednesday) although a big sell-off looks unlikely unless more disasters emerge from Wall Street.
In a dire consumer market Next beat some expectations with a 13% slide in first half profits and Mike Ashley's Sports Direct produced flat sales and profits, a great relief to many in the market.
The colourful entrepreneur, currently embroiled in a row with former manager Kevin Keegan at his football club Newcastle, has been just about the most unpopular person in the City since floating his business, trousering a cool billion and seeing the shares tank.
But Ashley is a canny retailer and the hitherto unloved Sports Direct is now on many brokers' buy lists.
There were also some buyers nibbling away at ITV in early trading, despite its almost certain imminent expulsion from the list of top 100 shares.
CEO Michael Grade will be keeping a close eye on his share register.
Stephen Foster is a former news editor of Campaign, former editor of Marketing Week and Evening Standard ad columnist. He is a partner in Editorial Partnership and writes the blog www.editco.net and Politics of the Media for Brand Republic.
This article was first published on brandrepublic.com