So much for “Band-Aid” approaches.

Well, surprise, surprise…
The markets didn’t immediately turn around after Congress finally passed the bail-out. They’ve gotten increasingly worse. What the politicians don't realize is that the problems with the economy and the markets are deep-seated. Yes, they originally emanated for the sub-prime debacle, but like viruses, they have mutated. Maybe if the mortgage situation was addressed responsibly a year ago there would have been a positive reaction, but it appears that addressing only one aspect of the problem won't fly.

Band-aids won't solve the problem, and putting duct tape on it won’t, either.
The base problem is that there is uncertainty about the value of investments, not just mortgage-backed bonds. Though many clamored for less regulation in the past, the result was not what they wanted. We need to find an equilibrium that works.

Wachovia
The situation with Wachovia points out truths about the market. The FDIC made a quick deal with Citigroup to rescue Wachovia, arranging a fire-sale price for the banking operations and agreeing to put a cap on potential losses. Then Wells Fargo came in and said that they would pay seven times what Citi would, and didn’t need government help. This shows that the market is able to work, even in this economy. It just needs time. Knee-jerk reactions aren't what’s needed. Time may cure all.