Wow

I thought last week with Frannie and Freddie was historic. That now seems quaint.

The number of measures announced last night and this morning are too numerous to document - you can hit CBSMarketwatch.com or CNBC.com for a list of the multiple actions taken - just be assured that all risk is being taken away from the financial companies in America and given to the American taxpayer under the guise of "well there is a good chance the US taxpayer makes a profit!" Obviously no private party was willing to make that bet on profit but we are being asked to.

I think the final straw was the run on money market funds by institutions - you know the "calm" ones (I say that in regards to how the conventional wisdom is the small retail investor is the one that panics - look whose talking). I really am simply amazed at the past year, the past month, the past two weeks, the past week, and the past 24 hours. Jack Bogle, founder of Vanguard Funds, and in the business nearly 60 years was on CNBC this morning saying he has seen nothing like this. The only question I ask is "if things are so fine" as we were assured, why the historic actions? Obviously things were not fine, nor near fine.

Now after the euphoria runs out, will people ask "why" were these steps necessary? That's the same question I asked after the Bear Stearns bailout. Remember, we were assured "it cannot get worse than this" and "the bottom is in financials". That didn't work out so well.

However, this time we have taken it to another level. We won't be doing a RTC type of bailout in my mind because in that instrument we took over failing financial institutions. This is more similar to the 1932 version (that's Great Depression era action) where we have the banks offload their toxic items to the American taxpayer. But don't worry - as long as we hold it until "calmer" times we'll make a mint off this transaction. Nothing is free in life - there is a cost in the long run for our "stock market victories" in the short run. The potential obligations of the American taxpayer continue to skyrocket. But purely from a Wall Street view that does not matter - risk has been offloaded away from Wall Street and into another entity. So that's a very large net positive.

Looking at the S&P 500 open as we near S&P 1250, we have rallied 7.3% in 1 HOUR since 3 PM yesterday.

As I said yesterday, "they" went one step too far - you do not mess with Goldman Sachs. Period. President Paulson... err Treasury Secretary Paulson showed them. I can only imagine how this would of worked out if it were Secretary O'Neil or Secretary Snow at the helm today.

Historic times. Head shaking times.