Yesterday's 777 point drop in the DJIA was the 18th steepest percentage decline in history, nestled between the drops on July 20, 1933 and July 30, 1914. The drop on October 26, 1987 was worse, as was the drop on October 27, 1997. Eventually, we rebounded from all the drops, and we'll rebound from this one too. (Stocks are headed higher at the opening.)

But it wouldn't hurt for our government to do something to make things easier.

I was pleased that the "Paulson plan," modified as it was, still failed yesterday. My fear is that Congressional leaders won't make the substantial changes the plan needs in order to be a good one. One place they might turn is to Rep. Jim Marshall (GA-8). Contrary to what is becoming conventional wisdom, that people in "safe" distrcits voted yes yesterday while those in tough races voted no, Marshall voted yes despite being in a tough race.

Then he wrote an op-ed piece that is available on CNN's website. I think his ideas could be exactly the right way for government to go, and would also be politically feasible.

More to come as things develop.

The bill went down, 205-228.

The stock market tanked at first, but is rebounding somewhat. The DJIA was, at one point, down over 700 points, then rebounded to recoup half that loss as word went around that arms were being twisted on the House floor (remember the prescription drug bill?), then dropped again as the votes seemed to be impossible to get, and is now (as I write this) off by about 460 points. We still have two hours of trading left today, and all day tomorrow (and tomorrow, and tomorrow) to go.

The other good news -- crude oil prices are off by over $8/bbl.

I have read the 110-page bailout plan (available from the NY Times), and have a few comments:

First, the Treasury Secretary can buy almost anything he deems to be a troubled asset. This is more than a little too broad for my comfort. In addition, the first "oversight" committee consists of the Treasury Secretary (huh?), the Fed. Chair, the Director of the Federal Home Finance Agency, the SEC Chairman, and the Secretary of HUD -- in other words, five people appointed by the President, including the guy who's in charge of the program.

Another problem -- the Treasury Secretary can waive parts of the "Federal Acquisition Regulation," specifically those parts that require minority participation and opportunities, very easily and with almost nobody allowed to complain about that.

We're just getting started; there's more.  read more »

I'll have more (much more) to say about the current financial situation, but for now...

John McCain, after having stated that "the fundamentals of the economy are sound," being against the AIG bailout before being for it, and not read the three-page outline that is the "Paulson plan," decides suddenly to "suspend his campaign" and fly to Washington (dissing David Letterman while taking the time to speak with Katie Couric) in order to fix the problem. (Check out the video of Letterman's reaction on YouTube!)

He even goes so far as to demand a delay in the debates, which would also (conveniently?) delay the VP debate.

So he finally gets to Washington, and what happens? Chaos.  read more »