In one fell swoop, after having already committed PUBLIC FUNDS equaling $600 billion to bailout PRIVATE businesses and their bondholders, King Henry (Paulson) and his Crown Prince, Fed Chairman Bernanke, have announced a new, far-reaching, allegedly systemic bailout of PRIVATE businesses with PUBLIC funds that could--and will-total the magic trillion dollar number.

The plan has several key but so far loosely defined components. The Federal Government (meaning us poor slobs) will become the final resting place for the essentially worthless securities--mostly mortgages--that the geniuses on Wall Street found themselves being strangled by. Before these securities became toxic, it would not be overstating the matter to say that their owners made 100's of billions of dollars in profits from trading and/or investing in these things over the past 5 or 6 years. There will be no attempt to re-claim those profits by the U.S. Treasury, of course. The price that will be paid for these pieces of toilet-paper has yet to be determined. Of course, if you don't own any of these bonds/securities, there's NO DIRECT BENEFIT TO YOU.

The Federal Government will also get into the business of guarantying Money Market Funds (MMF) for the first time, perhaps $100 billion worth of them. In postmodern Capitalism, MMFs became a de facto sort of bank to many: risk free places where excess cash could be parked with a minimal payment of interest. Of course, if you don't have any cash in a MMF, there's NO DIRECT BENEFIT TO YOU.

Finally, the Securities and Exchange Commission will henceforth prohibit short selling in the stock of any of the firms on a list of 799 names, including all of the powerhouse PRIVATE financial institutions out there. Unless you own some shares of one or more of those companies, there's NO DIRECT BENEFIT TO YOU.

So we see that there are DIRECT BENEFITS TO THREE CLASSES: (1) Holders of the toxic securities; (2) MMF depositors, and; (3) Holders of shares in the "special" list of 799, whom I'll call 799ers.

In other words, PUBLIC funds will DIRECTLY benefit three select and hardly underprivileged groups.

The PUBLIC, on the other hand, will benefit, we are solemnly told, INDIRECTLY.

The argument being advanced by CAPITAL, and those in its service, like now-King (and formally CEO of Goldman Sachs) Henry Paulson and Fed Boss Bernanke, is that the entire system was in jeopardy of collapsing, an event that would indeed have pernicious consequences for everyone, rich, poor and in the middle. That's the justificatory argument for these actions in a nutshell.

Is it a valid argument? The collapse of the financial system would have unimaginably malign consequences for all inhabitants of modern or near-modern societies. That proposition is beyond debate.

The three questions that are open to debate are: (1) Would the financial system have collapsed without these specific actions? (2) Will these specifics actions prevent the system's collapse? (3) Has there been adequate input into the decision-making process so as to ensure that other approaches were presented and evaluated before the Paulson Plan was adopted?

Russia, two days ago, closed their stock market in the face of a two-day decline of of approximately 27%. That market has not yet re-opened for trading.

What can be expected next in the United States?

Today's trading on the New York Stock Exchange saw the Dow Jones Index lose 450 points.

Shares of the venerable and sole-surviving independent investment banks, Morgan Stanley and Goldman Sachs fell as much as 44%(!!!) and 27%, respectively. Morgan is doomed for sure, Goldman, most likely too.

As the logo's in the post below this one indicate, these two firms have plenty of company.

Does the USG dare halt trading? Do they dare call a "bank holiday," as was done during the other Great Depression in the 1930s? Will such actions only exacerbate the problems?

As of now, there have been no indication of a 1930s-style run on the banks taking place. The public, either because of ignorance or blind faith, has yet to line up at their local bank branch and demand their money. Right now, the first priority of the USG is to prevent such a scenario from developing.

One can surmise that the USG in concert with the Federal reserve System has realized that they cannot be the "lender of last resort" to EVERYONE.

The question now is: Who shall be allowed to fail and how can the consequences of these failures be mitigated, if at all?