The house passed the bailout today in round 2, and it was law a few hours later. I have always been for some kind of intervention like this, and I do think it will save the banking industry and prevent a catastrophic global banking failure. While I would have liked to see something along the lines of the Swedish Model I linked to before (recapatalize banks by buying stock - effectively nationalizing them for about 5-10 years), but someone pointed out that in order for that plan to work you need to have a functional government to save a dysfunctional banking system.
America, unfortunately, has dysfunctional everything.
So this is what we get. An imperfect, blunt economic tool that should allow banks to keep on at least functioning for now. But, I think that is all it will do. The world is heading into, or is already in, a global recession and I don't think there is a government in the world that can stop it. Big orders are way down, no one can get any loans to keep projects going, unemployment has shot up, and all this was before banks started failing. Yikes.
But a caveat to all this optimism, the TED is now at 3.87% - a new high and almost off the chart I posted below. So even with the news of this bailout, banks are more afraid than ever before to lend to each other.