UPDATE...The House failed to pass the bailout bill. Poll numbers have consistently shown that average Americans oppose using taxpayer money to bail out Wall Street. Democrats and Republicans opposed the plan. Now, the Democratic leadership is going to be even more reluctant to come up with some plan. I suspect that if more time is taken to negotiate the package (especially if the markets fall dramatically and more big institutions fail), make some changes, then they will get the votes to pass something.

Over the weekend House, Senate and Administration negotiators finally came up with a Wall Street bailout plan. Here is a sketch of the plan. Basically, the bill would initially authorize $250 billion, with the President given the authority to spend another $100 billion. Another $350 billion could be obtained, but Congress would have to vote their approval. Assets would then be purchased by the Treasury Department (who would have the authority to hire experts to manage the process) and the taxpayers would hold ownership stakes in those companies from whom the assets were purchased. The bill has oversight elements, limits on executive pay packages (but not on already existing employment contracts), an insurance element (companies would have the option of buying insurance on their troubled assets, rather than selling them outright), and it allows the Federal Reserve to pay interest on bank reserves, which would help ease the credit crunch. The bill also mandates a study of so-called mark-to-market accounting standards, which are blamed by some for the current fiasco, and would allow the Federal Government to forestall foreclosure proceedings against homeowners whose loans are covered under the program.

Now comes the tricky part. First, Congress must pass the bill, which is already generating some opposition. My guess is that it will get done, now that it includes a little something for each faction (which, of course, is the way legislating works...thus, the old Bismarck line, "Those who like good laws and good sausages should watch neither being made"). Second, once it is passed, it needs cooperation from Wall Street. It isn't enough to just restore short term confidence in the markets, it also needs to actually help ailing companies, thus restoring long term confidence to the markets. Only time will tell.

Of course, our current economic model could be broken, according to Robert J. Samuelson.

Some investors are wondering why they can't get into the action of buying these assets.

There is, of course, other news out there. The New York Times has some good stuff this morning, including this story about resistance to Obama by union members. On their editorial page, three good ones. Bill Kristol has some advice for McCain on how he can win the election. Is Iran on the verge of a nuclear weapon? Is Gordon Brown about to go down to defeat in the next election in Great Britain?

David Gelernter has some thoughts on Barack Obama's fuzzy view of history in this piece in The Weekly Standard.

Obama continues to gain ground, as indicated by the RealClearPolitics Electoral Map. Obama has now taken the lead in Colorado, Virginia and North Carolina.

Some inside the Obama camp now believe they can win in a landslide.

Their optimism, which is said to be shared by the Democratic candidate himself, is based on information from private polling and on faith in the powerful political organisation he has built in the key swing states.

Insiders say that Mr Obama's apparent calm through an unusually turbulent election season is because he believes that his strength among first time voters in several key states has been underestimated, both by the media and by the Republican Party.

Apparently, the Obama people believe they can win states like Virginia, North Carolina, and even Indiana.

"Public polling companies and the media have underestimated the scale of new Democratic voters registration in these states," the campaign official told a friend. "We're much stronger on the ground in Virginia and North Carolina than people realise. If we get out the vote this may not be close at all."

Of course, the $64,000 question is whether or not these newly registered voters turn out, and the game changing question is whether or not a significant percentage of those voters who tell a pollster they will vote for Obama but really won't once they get into the privacy of the voting booth is large enough to swing the contest the other way.