Hooray!  The bailout plan has made it through Senate and the House of Representatives and is now on its way to President Bush’s desk to be signed into law!  We’re all saved!  Champagne and cigars all around!  Let the good times roll again!

Or is it slightly too early to celebrate?

Here’s what we know: the non-passage of this bill trashed the stock market on Monday (down 777 points on the Dow).  Passage of the bill did very little to help equity markets and it is highly question­able whether 700 billion will be enough ammunition to un-jam the credit markets.

Also, you and I are now on the hook for 700 billion dollars.  That’s an important little detail.  One thing is for sure: the flight of our economic phoenix will have a lower trajectory for quite some time because of this contagion and the acts of desperation our leaders are employing to try and contain it.

So, now that we’re all angry, who do we throw our Molotov cocktails at in a fit of rage?  Tough to say.  A large cause of this collapse was the many derivative markets that manifested due to poor regulatory oversight and the general disconnect between the risk-taker and the risk-maker.  For example, if I own a bank and I don’t have to hold on to the mortgages I originate, I’m not thrillingly concerned about their long-term performance.  I can just sell them to investment banks and let them deal with the risk.  That laissez-faire it-will-all-work-itself-out ideology, it seems, has bit us in the communal tail-end.

On the other hand, we can’t overly vilify Wall Street because, to a great extent, we wanted this.  American homeownership is an institute you can’t disparage.  So, in our frantic attempt to get every man, woman and child into a home of their very own, we overlooked things like “what if properties stop appreciating at this break-neck rate?” or “what if I don’t get a promotion by the time that my ad­justable rate increases?”  Remember, every time you point the finger at someone else, three other fin­gers are pointing right back at you.  There may be a lesson there.

The fact remains; this bill is on the fast-track to becoming law.  Renewed confidence in stocks will draw money away from mortgage-backed securities in the short-run, inflating mortgage interest rates.  However, the overall effect of this bill should be a smoothing out and a general decrease in interest rates, as the government will now start purchasing mortgage-backed securities en masse.  Hopefully, we will see this as a step towards reviving our ailing housing market and righting our economy.