Bailout Approach - Stock Market Reaction

Property Republicans this week denied the bailout plan introduced to Congress by Chairman Bernanke and Secretary Paulson. The initial plan might have provided Paulson $700 billion dollars to use as he saw fit with no oversight and no reporting requirements.The House changed the plan to provide oversight, pay only $250 billion in advance with yet another $100 billion probable with Presidential approval. The past $350 million might be refused by Congressional vote.Many influential people, including Warren Buffet, believed the program might pass. The issue is not, is really a plan needed, but instead what is the very best plan to include place. Absolutely, giving Paulson or anyone else for example, a blank talk with no oversight isn't a good idea. What made Paulson think this would travel anyway? But what is a great strategy? Well, to write a great plan you need to take a look at the root cause of-the issue. The problem began with the housing situation and the subprime mortgages.So, does buying $700 thousand pounds of foreclosed houses solve the problem and incent banks to begin financing again? Does-it make banks more liquid? I am certain that it makes them feel a lot better that they don't really have those dead loans on the books nowadays, but will it make them throw caution to the wind and begin lending income with no change in their former credit practices?Banks won't need to get into this case again. Their credit procedures will become much stronger, which makes it exceptionally problematic for the average person to get a loan. the rates banks are lending to one another has improved significantly, meaning they have surely got to make up the extra expenses someplace interest rates are likely to improve simply. And what does a small business do when their costs increase? They pass it to the consumer. Therefore is purchasing $700 million worth of foreclosed houses going to ignite a lending madness to boost the economy?And how about these foreclosed houses? The us government is hoping to buy these things at a reduced rate and turn around and offer them...for a profit. Have they read about the housing market lately? They declare that they may have to sit on these houses for awhile, possibly years before they provide and recoup their (our) money.If you are a home owner you understand that maintenance and preservation on a home is continuing, a daily project if you want to keep it looking good. So, who is going to complete maintenance on numerous properties until they sell...and who is going to fund that? What does the property become worth then, In the event the government needs to level them and fundamentally condem the houses? Do they really have any hope of regaining the $700 billion or possibly a fraction of it? Will this plan eventually bankrupt the country?How can the rules for stock trading react to this plan? Possibly really initially. If the approach does not restore confidence it will make the current historical 777 position dive appear to be a day at-the playground. The newest plan requires FDIC insurance to be raised to $250,000 from $100,000. I've got to let you know, I feel a lot better knowing there's $30 million in FDIC insurance to cover the $9 billion dollars in deposits.