Secretary Hank Paulson is doing the right thing in his afternoon testimony: he is arguing that this is not a bailout, it is an asset purchasing program. The $700 billion is for Working Capital to buy mortgages.
He's doing this to try to stem a tidal wave of add-ons that will dilute the effectiveness of the bill. Remember on the other side of this rabbit-hole, we want OPT IN, not OPT OUT.
President Bush will try to sell this plan tonight; unfortunately, he is not in a good position and is not the best spokesperson for the plan.
As for limits on executive compensation, traders are resigned that it appears to be a fait accompli -- but that it will also dramatically limit the talent pool working in the public sector.
Even independent of that, there's a sense that a good living -- not $30 million a year, but the $500,000 to $1,000,000 many mid-level managers DID make on the Street -- is now very limited.
- Poll: Did Bernanke and Paulson Make Their Case?
"We're all going to work in tennis shoes and make $30,000 a year," one very dejected trader said to me this afternoon.
Meantime, the market is quiet. No one is trading. This is the narrowest trading range we have seen in a month. Volume is less than half what is was last week.
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