It Passed

It's official. The US Congress passed a $700 billion dollar bailout package today, and it was later signed into law by president Bush. In one of the most interesting moves by government that I've ever seen, this thing actually failed earlier this week. I was a little shocked, though a little bit cynical. I suspected that it would lie dormant until after the election, after which it would be shuttled through in pieces with little fanfare. Instead, greater than thirty congressmen changed their votes in less than a week with the only changes being some random tax cuts and changes to the FDIC limits on accounts that will barely impact anyone (who the heck with >$100k in liquid cash keeps most of his money in a savings account?). Apparently two more days of talking about "greedy" people and a couple of woe is me's on the stock market is enough to convince more than half of the representatives of the people to do something that is both stupid AND clearly against the will of most of the people. This isn't even a case of the people being stupid.

In other news, Wachovia is attempting to ditch its still incomplete deal with CitiGroup in favor of a deal with Wells-Fargo of San Francisco. The CitiGroup deal required a large influx of capital from the FDIC (aka the taxpayer). The Wells-Fargo deal gives Wachovia and its shareholders more money, more autonomy, saves everyon's deposits, AND requires ZERO government intervention. Wells-Fargo, which is an entity that didn't invest heavily in sub-prime mortgages and is not going under, is currently in a market position to gain market share, largely due to more intelligent financial decision making. The FDIC is challenging the change, apparently ever eager to waste taxpayer money. First we blame the market for central bank failures, then we prevent the market from fixing the problems that we blame on it. Brilliant. I'm still not optimistic.