OK, we've had our little celebration now. The most recent iteration of the bailout bill went down in flames. But like Lazarus, or maybe Rasputin, it will prove very hard to kill. Back to reality. In the end, Tom Friedman, David Gergen, and the rest of the punditocracy will get their way.
Among the reasons is this: Assuming the theory that the Plunge Protection Team either allowed or engineered the 777-point Dow drop on Monday, it is having the desired effect: Calls to Congressional offices — which last week were reported informally as 50% "no" and 50% "hell no" — have begun to turn in favor of a bailout.
And chances are the new and improved version will be even worse than Version 1.0. The most baffling/outrageous/insane aspect of the new model is the plan to "temporarily" increase FDIC deposit coverage from $100,000 to $250,000. In the first place, I guarantee you any temporary increase, whatever the size, will become permanent. In the second place, is anybody, I mean anybody among the power elite even giving lip service to the fact the FDIC can cover — at best — about 1% of all insured deposits at the current $100,000 limit?
No wonder there's a run on gold bullion among the wealthiest investors. "Investors in gold are demanding 'unprecedented' amounts of bullion bars and coins and moving them into their own vaults," according to the Financial Times, "as fears about the health of the global financial system deepen." Still other folks, not as well-heeled, are checking out five alternative methods to invest in the yellow metal.