By Paulson’s own admission during testimony the Government will not be buying these securities at ‘market value’ (ie, the fire sale price of 20 cents on the dollar). In his testimony Paulson said the plan was purchase the securities at ABOVE the ‘market value’ (which nobody really knows) in order to create some type of ‘confidence’ in mortgage backed securities (‘see look, there is somebody willing to buy a penny for a dollar, let’s all jump in now). So they will be buying these securities at a premium seriously decreasing the taxpayer’s chance to see any returns.

And let’s not forget the fact that this bill does NOTHING to address the underlying problems with the derivatives market, the failure of ratings agencies, the lax oversight environment over reliance on leverage (debt) etc etc etc. and, by injecting yet more good money after bad will drive up inflation.

Let’s assume liquidity is needed in the market. I’ve been saying for days it is a mistake to give the liquidity to the same people who made all the bad bets to begin with. There are still plenty of financial institutions that are relatively insulated from the derivatives market. Let the government lend them money (at a good rate) so they have the liquidity needed to buy up the good assets from their fallen brethren.

And interest rates should be HIGHER. Savings are in the toilet precisely because interest rates are so low. Let the banks raise rates and move people away from borrowing their way to prosperity to saving their way prosperity.

McCain has been running ads in Indiana. A state that has been solidly Republican for decades and that no Republican candidate has had to spend any time on in years.

The McCain camp is being forced to spend money to defend what should be secure strongholds. Its no wonder they are cutting resources in places like Michigan and other 'battleground' states.

It's FAR to soon to start celebrating (a lot can happen in four weeks). But team Obama's steady campaign, sticking to their message, not getting bogged down in the day-to-day dramas and slow uptick in attacks against McCain/Palin appears to be working.

I fully expect McCain will try another 'Hail Mary' play in the next couple of weeks. At this point the only real option he has left is some kind of dramatic game changer. The question is; what will try next?

If it does not address any of the underlying causes of the problem. I will continue to repeat myself ..

The bill does NOTHING to deal with the deravitives market, the failure of ratings agencies, the over reliance on leverage (debt), the loosening of capital requirements, the lax regulatory environment etc etc etc. There is NOTHING here that will stop Wall Street from coming back in six months to a year when the Hedge Funds start to collapse and asking for another trillion to bail them out or we all face DEATH!!! DEATH!!!!!.

Handing out $100+ billion or so in new tax breaks (a couple of which I support) without any offsets, Paulson's admission that they will buy these securities at ABOVE market value, all the other crap tacked on to bill, more than doubling its page count.

I've said before NO good legislation is written in week and passed under these conditions.

And whether this bill passes or not Main Street is still looking at an ugly year (I got a 1.5% raise this month, doesn't even keep me even with inflation), layoffs and cutbacks are guarateed.

Bush has been a disaster of a President but there have been one or two times when he actually managed to hit the target. Most likely it was by accident but it happened.

1 – AIDS in Africa. I have to give Bush credit for putting America money and the bully pulpit behind getting more funding and attention for combating the crisis of AIDS in Africa. He ain’t perfect (this is Bush). Cutting family planning programs and stressing abstinence programs over condoms is mind numbingly stupid but it is more than most other world leaders are doing and more than the US has done in a long time.

2 – I’m sure there was something else but I can’t think of it now.

And here we are.

After the 'rescue plan' passes the world still collapses and the 'credit crunch' still persists. Not the mention the dollar is starting to go into free fall (hello inflation).

As I kept repeating last week, the bailout did nothing to address the underlying problems with the deravitives market, the complete failure of the ratings agencies, the over reliace on levarge (and in fact encourages even MORE borrowing).

Is anyone actually surprised that the world reacted with a collective sneeze.

Some of the costal manufacturing hubs are seeing increased wage rates in China. That's one of the reasons manufacturing is starting to move deeper inland. They are looking for cheaper labor pools. China is also feeling the sqeeze at the higher end of the market (high skill jobs).

Some businesses are also starting to look at other emerging economies in Asia (Vietnam, Thailand etc) because wages in those countries are actually cheaper than China.