Thank You, Mr Paulson

So Congress caved in to Wall Street's hissy fit and gave the Treasury carte blanche to spend USD700bn on buying worthless mortgages. And just for good measure it added 150bn of unfunded tax breaks.

That was quite an expensive day, even by Washington's standards, coming to about USD4,500 for every US taxpayer. And what will it buy?

Well, how about a big steaming pile of moral hazard? Oh, and don't forget the blank check that Congress now has to shoot itself in the other foot by passing a whole raft of anti-investor legislation next year once there is a Democrat in the White House and a rock-solid Democrat majority in both houses.

The most remarkable thing, perhaps, about this whole sorry mess is that it has been instigated by a high priest of Wall Street who was himself at the top of the capitalist pile. He is an honourable man, Secretary Paulson, so I'm sure he didn't do it for his friends. But then who did he do it for? Not for you and me, it's clear.

The markets showed how they would have reacted to the bill's failure on Monday and Tuesday, after the House threw it out, and it wasn't that terrible. And just in case you missed the message, they fell again after the bill was signed into law on Friday afternoon.

It won't make any difference to what is going to happen, anyway; it will just transfer a trillion of our money into the pockets of the owners and operators of financial institutions once this is over and it all starts up again.

Meanwhile I for one won't be putting any money into the dollar or US stocks or bonds. There's only one way they can go for the next few years, and it isn't up! Perhaps I'll buy US bank stocks in 2010; they should be nice and cheap by then, and I'll reap my harvest in 2020, just before the next crash.