$850 BILLI0N WALL STREET BAILOUT

The dust is clearing, but if won't be for a while for total clarification, particularly those curious add-ons. One would have thought that these picayune (but expensive) pork chops should have particularly infuriated those conservative Republicans in the House. Somehow, in this most perilous of financial times, the Senate had the nerve to tack on the following tax relief add-ons (generally over ten years):

- rebate on rum excise taxes in Puerto Rico and Virgin Islands = $192 million

- credit for expired tax credits in American Samoa = $33 million

- depreciation advantages for NASCAR = $100 million

- reduction of import duties for wool fabrics = $148 million

- film and TV production credits = $478 million

-

- loans for the auto industry = $25 BILLION

There were, of course, assorted small ones, with two of them being:

- tax advantages for parking bicycles = $2 million

- exemption of wooden arrow taxes = $2 million

-

Further, the stock market had already mostly recovered from that worst one day drop in history. So why was the House so compliant in rolling over and passing the Senate version of the rescue package? It is reported that the loan market was so paralyzed that even one more day of delay could have discombobulated the national economy. So, by passing the exact same measure, President Bush could immediately sign it without a conference, and he did within two hours of passage.

-

How large a sum is $850 billion? Well, as reported yesterday, that is equal to $8,000 per family...or $2700/person. More so, details can be found in my Huffington Post article on Billions and Trillions, but this bailout is more than three times the combined cost in 2008 dollars of the Manhattan Project, Marshall Plan and Apollo Project. Maybe the worst part of this all is that we don't yet know how the market and economy will react.

-

Tropical Storm Marie, now up to 70 MPH, is moving very, very slowly towards Hawaii, and is expected to attain hurricane status in a day or two. It is still expected to weaken before doing any damage. There is a brand new tropical depression at 35 MPH which just formed off the coast of southern Mexico in the Pacific. It is too early to predict much.

-