Bailout - Yeeeeaaaaaaaahhhh

Can't let $700 Billion go by with out a little critique. First off, I don't really think it's all that much; it's only about $2,300 per capita. Next if people way smarter than the average person are the ones proposing this maybe we should listen. Henry Paulson did manage to run the most successful investment bank for quite some time (one that is still around).

The politics of the plan are at best despicable. First the blame game, then they play savior of the Free World (Nancy Pilosi & Barney Frank should kiss off, they've had plenty of chances to regulate and both were around during the Clinton administration when many regulations were lifted). This is also not the time to implement every populist regulation legislators can think up either, put those in on their own merit later.

Who knows what the economics of the plan are, no government has ever spent $700 Billion in a week. Proponents claim financial disaster if we don't act and detractors claim skyrocketing inflation and an untamable deficit. It's unlikely either is completely correct in their views, although I would error on the side of some of the smartest bankers in the World. Finally, the gov't is not really spending $700 Billion, they are buying these "worthless" securities and are going resell them at a later date. Once a market returns for the securities whatever the price, they will be sold back possibly at a loss or potentially at a gain.

The bailout could be too small - If the $700 Billion is not enough to provide a sufficient market in these securities, competition in the auctions will be too much and they will still sell at a depressed value. Once these auctions begin they will also serve as a "market price" for similar securities that some banks may not want to sell or be able to sell due to the size of the bailout. Similar securities may then have to be marked down further due to these auctions.