Thank God we got a "NO" vote today folks.

No, not because the market tanked. 

And no, I was not short up to my eyeballs.

I scalp traded the morning but was out when the blowup came, as I didn't expect it - I really did think the bill would pass, my and many other's efforts to stop it notwithstanding.

No, the real news is found here:

"Sept. 29 (Bloomberg) -- The Federal Reserve will pump an additional $630 billion into the global financial system, flooding banks with cash to alleviate the worst banking crisis since the Great Depression.

The Fed increased its existing currency swaps with foreign central banks by $330 billion to $620 billion to make more dollars available worldwide. The Term Auction Facility, the Fed's emergency loan program, will expand by $300 billion to $450 billion. The European Central Bank, the Bank of England and the Bank of Japan are among the participating authorities.

The Fed's expansion of liquidity, the biggest since credit markets seized up last year, came hours before the U.S. House of Representatives rejected a $700 billion bailout for the financial industry. The crisis is reverberating through the global economy, causing stocks to plunge and forcing European governments to rescue four banks over the past two days alone."

Now let's think about this folks.

The Fed threw $630 billion into the market before the vote, and yet the S&P 500 was down 40 handles anyway, and in fact tanked after the vote.

Note carefully - Paulson's plan was $700 billion, and Bernanke spend $630 billion - almost the entire amount proposed - and failed to fix the problem.

Got it?  Good.

Now do you see what I've been saying? 

We were about to piss $700 billion into a tornado and lose it forever.

Fortunately sane people prevailed in The House of Representatives and voted NO.

If they hadn't, we'd have had our proof but the money would be on its way into the vortex and you the taxpayer would have been utterly screwed.

IF we are truly facing an economic catastrophe you have just seen proof that Paulson's $700 billion will do nothing.  It is my contention that to actually arrest this mess we'd need up to $5-7 trillion, and taking on that sort of debt would essentially destroy the value of our currency, cutting it in half (which means your cost of living doubles); that is, "fixing" this mess will be worse than doing nothing at all!

IF we are indeed facing a deep recession (or worse) then we will need that $700 billion to feed and house the displaced Americans here in our nation, and cannot afford to hand it to a bunch of rich (and pissed-off) bankers around the world who made bad bets and now are screaming with their hand out like a 2-year old who wants another candy bar.

Now let me make clear - I am not suggesting we do nothing, but I am stating clearly that we cannot print (or borrow) our way out of this. 

The petulant child Hank Paulson, the very same petulant child who was largely responsible for causing this mess by creating subprime securitization in the first place while at Goldman Sachs (never mind Goldman shorting the same thing they were selling!) continues to insist that "his plan must be what is passed" even after The House - which is beholden to the people - said NO!

Not only that, we now have "foreign interests" ranting and raving that we should do this.  Well if this is so, how come these same foreign interests have given the finger to passing bills like this on the backs of their own taxpayers for their institutions?

Ben and Hank made the mess over the space of several years, they have had over a year to clean it up, they have refused to do so, instead choosing to throw money at the problem instead of resolving the issue and now having been told "Not no but hell no!" by the United States public they are continuing to stick to a proven failed policy!

Additionally we have a President and Treasury Secretary that have committed the unprecedented, irresponsible and puerile act of intentionally inciting panic in the public and Congress as a means of attempting to ram-rod through a bill that effectively crowned King Henry and was doomed to fail - either outright or, if it was followed with yet more desperation-style expansions of the facility could have led to the collapse of our currency and ultimately our government.

Finally, a large part of the decline today was due to the lack of shorts.  I saw multiple instances this afternoon of bids literally disappearing on individual stocks - that's something that is the direct result of forbidding shorting, and it happened only on non-borrowable stocks.  My best bet is that a solid 100 points - and maybe as much as 200 - of the DOW's decline was specifically due to the shorting ban.

How does Henry Paulson not wind up ejected from the administration - or brought up on impeachment - over his acts in this regard?  Is not this sort of incitement a gross dereliction of office?  He has been reported to have told Congress that but for immediate passage of his bill we would see 3 million or more lost jobs within weeks!  An additional 3 million lost jobs over what is happening anyway? That's pure nonsense.

How does the media excuse themselves - especially media such as CNBC - which was parading around this afternoon calling opponents of this (now proven to be ineffective) bill "financial Tim McVeighs", not to mention CNBC calling for a circuit-breaker size crash so as to force Congress to give them what they want?

It is time for Congress to lock up the children and let the adults come into the room  so we can get a bill that not only can pass but will work.

There are plans to solve this problem that will work and which involve either no or very little taxpayer money.  I've got a plan I believe will work and there are many others.  We must address the trust problem - not throw money at irresponsible and even criminal bankers who created the mess in the first place.

It is time for those of us who have other ideas to be invited to Washington DC to discuss, debate, and hammer out something that will actually work, then put that to a vote.

Period.

BTW, there's a new web site up to track this bill if it resurrects itself (and they will try) - its at http://supportedthebailout.org