Tomorrow

Congressional Budget Office head says not only will this plan not work, it's likely to make the situation worse.

It's the problem I alluded to a week ago, and several times since. Most holders are still carrying this toxic trash on their books at unrealistically high values, to avoid a big problem: If the assets were written down to their actual values, these holders would apparently be insolvent. Our buying the sh*tpile at this actual value has the very same result: Bankruptcies.

The Feds would have to pay a fantasy premium (at taxpayer cost) to accomplish anything. But $700 billion isn't near enough when the total sh*tpile has a face value of more like $50 trillion. One and a half percent? The only possible way this could work is that the psychological effect of that first $700 billion is positive enough to start the heart pumping fantasy values through the system again, until years from now everybody might have slowly worked the sh*tpile out of the system.

I ask again, is this the best way to use the ammo? Besides, the five biggest Wall Street losers have already rolled over.

We need to protect cash deposits, homes, jobs. That's where Main Street lives.

Quite apart from all of this, there's a political problem: Now that everybody's panicked, we have to do something, even if it won't work. Nobody wants to go back home and campaign on a do-nothing record.

Tonight's bad news is that Washington Mutual was declared insolvent and seized by the FDIC -- the largest bank failure in US history. JP Morgan Chase then bought the assets, and taxpayers didn't lose a cent. Looks like the market is still taking care of itself.

Tomorrow should be fun. There's no bailout plan agreement, and frankly there's not likely to be one by Monday. Dow futures are down 178.