We won't have to wait long for the answer to this question. If the Libor (London Interbank Offering Rate) which reflects the willingness of banks to lend to each other and the TED spread (the difference between the Libor and 3-month Treasury bonds) which reflects the fear factor in credit markets don't show clear signs of easing in the next few days, then the answer is, "No."

If that's the case, expect a free fall in our economy.

Oh, and if that isn't enough to keep you awake, US inventory supplies of gasoline has fallen below 180 million barrels, which most oil industry analysts say is the bare minimum needed to keep an orderly supply flowing. It wouldn't take much for the supply problems plaguing the Southeast to spread nationwide, in which case grocery store shelves would be empty in three days.

it won't have anything to do with Paulson. Likewise if it gets worse it won't have anything to do with Paulson. For the past week volume increase at the FED discount window has run $180 billion per day. Paulson is not doing anything in the next few days that is going to put a dent in that. There is no test ahead for this bill, this bill was just a terrible destruction of the new budget, a bungle of incredible magnitude. It won't rescue anything, it won't affect the markets, it will just waste money. It will hurt us in the long, long haul... if we last to see the long, long haul. But it wont do anything to change or free up credit lines to main street or build new jobs... and they are still claiming that they just achieved that with this bill (I'm listening to Pelosi, Frank, and co. LIVE in my other ear)

TED and LIBOR will go the way of the market. I would dearly love to credit this bill's failure with their continued destruction; not because i want the bill to fail, but because i would love to have a gauge to measure the bill. But the sad truth is, it is a joke. This mini hedge fund is not going to do anything to the market, the market will go it's merry way. It is just an astronomical special spending bill that will guarantee that the deficit will continue to go up for the next two years. It was a knife to the budget. It was sooooooooooooo stupid, we managed to let the worst president that ever lived kill two more years beyond his term.

we are stupid, therefore we are.

It may ease credit flow somewhat and give markets a vague upward trend for a while. It may help stave off some conspicuous looming crises, like California's. But the damage is done: the whole world knows that we don't have it, we can't fix it, we've got no plan. Just as Iraq smashed the illusion of the American military giant who could remake the Middle East, this crisis is smashing the illusion of the American financial giant who can backstop the global economy. It's one more giant step into an increasingly confusing global regime which is not going to encourage confidence.

California is still gonna have to get a credit line from the Treasury cuz this $700 billion is so damn wasted it won't even work to provide the $40 billion they need to make payrolls. California has already filed for that.

If you want a perfect test for ineffectiveness, there it is.

to the story I heard day before yesterday that the Chinese banks are refusing to lend to ours? That could be shit of the very deep variety.

conflicting.

has been issuing statements to the effect that our dollar is shit and they need to work in a direction away from it for the last couple of years. Who can blame them? Look how heavily vested they are in it. But we remain their #1 customer for their exports... so they can't exactly dump us too fast.