Sullivan is surprised.  I’m not.

The TED spread was stuck above 2.0 for some time. The peak was 4.63 on Oct 10th. The TED spread has finally moved below 1.0, although a normal spread is around 0.5.

Other indicators are also looking better:

The A2P2 spread as at 2.23. This spread has seen a huge decline in 2009. This is far lower than the record (for this cycle) of 5.86 after Thanksgiving, but still way too high.

This is the spread between high and low quality 30 day nonfinancial commercial paper. Right now quality 30 day nonfinancial paper is yielding close to zero. If the credit crisis eases, I’d expect a significant further decline in this spread – although this is good progress.

No word yet whether CNN will trot out pundit after pundit to sarcastically deride anyone who thought the bailout wasn’t working.  Also no word whether any DKos front-pagers will be writing any I’m-not-quite-the-mr-smarty-pants-i-pretended-I-was posts.

The fact of the matter is, we did something really quick and dirty, and it probably saved the nation from a serious financial disaster.  Having said that, does this mean Paulson and Co. didn’t make any mistakes?  Absolutely not.  There are a lot of things that need fixing.  More emphasis needs to be placed on restrictions/conditions for financial institutions that receive government money.  We also need more help to mitigate home foreclosures.  But to dismiss the entire thing out-of-hand because of these errors is ridiculous.

But, you know, nuance and graphs of obscure financial indicators doesn’t really make good television, so…

Kos continues his blind hysteria re: bailout:

Those of us who argued against the $700 billion based that argument on that facts that 1) we didn’t have a good handle on what the problem was, so 2) it was stupid to rush to a solution that might not solve the actual problem. Throw in the additional fact that $700 billion is a whole fucking lot of money, and it seemed all so absurd.

And of course, we skeptics were right.

(more…)

Best part (at about 3:33):

If your neighbor’s house is burning, you’re not gonna spend a whole lot of time saying, “Well, that guy was always irresponsible. He always left the stove on. He always was smoking in bed.” All those things may be true, but his house could end up affecting your house. And that’s the situation we’re in right now. We’ve got to make sure that we put the fire out and then we’ll start making sure that these folks stop leaving the stove on. But right now our job is to put out the fire.  And we can’t forget that.

This is exactly what we need the presidential candidates to do.  Explain the situation to the American people, because they have the bully pulpit.  What we don’t need them to do is suspend their campaigns and try to wrastle Congress.

Barack Obama.  Ready to Lead.

Rep. Barney Frank, GOP crusher.

Yglesias points out that the House GOP has no real alternative to the bailout:

But the deal’s critics on the right have . . . an irrelevant capital gains tax cut? And perhaps a plan to suspend “mark-to-market” accounting so as to allow financial institutions to recapitalize themselves through handwaving and cooking the books. I’m fully in sympathy with people who have their doubts about the desirability of the bill that was brought to the floor today, but surely one has a responsibility to lay out some alternative course of action. Even spelling out “we should do nothing, let large banks fail, assume money will flow elsewhere, etc.” could qualify you to participate in the conversation. But just bleating vaguely about socialism and saying mean ol’ Nancy hurt your feelings doesn’t really cut it.

Now’s the time to quit being scared of the GOP.  We have them on the ropes.  Push the progressive version.  More equity in the companies.  More help for homeowners.  More restrictions on executive pay.  More stimulus for the middle class.

They have nothing to counter with.  Nothing.  The GOP is practically begging to get crushed here.  They’re egging us on.  Make ‘em complain.  Hell, make Bush veto it.  Then they’ll really be in hot water.

They had their chance.  Now it’s our turn to mop up.

So the bailout didn’t pass.  And the S&P fell 8 percent.  And what do the House Republican’s have to say?  Ambinder’s got it:

House Republicans are blaming Speaker Nancy Pelosi for quashing bipartisanship sentiment right before the bailout bill vote — and therefore deserves the knock for its failure.

“We could have gotten here today had it not been for a partisan speech on the floor of the House,” Boehner said.

Awwww.  Poor wittle House Republicans.  They had to listen to that big fat meanie Nancy Pelosi say this:

Today, we will act to avert this crisis, but informed by our experience of the past eight years with the failed economic leadership that has left us left capable of meeting the challenges of the future.

We choose a different path.  In the new year, with a new Congress and a new president, we will break free with a failed past and take America in a New Direction to a better future.”

Apparently, them wuz fightin’ words, and cause for playing partisan games with an economic crisis.  Do they really think this excuse is better?  I didn’t vote for this bill because Nancy Pelosi was mean to me?  That’s the excuse.  Not “well, you know, my delegation didn’t like the socialist overtones of this package and I couldn’t wrangle enough support for it.”  I might actually be able to respect that.  But Pelosi is mean?  That dog don’t hunt.

So now that we tried to play Mr. Nice Guy with this and worked with the House GOP to compromise, and they still didn’t get on board, I say we make a hard left on this thing.  Let’s add more help for homeowners facing foreclosure.  Let’s throw back in the bankruptcy provisions.  Let’s add a second stimulus package for the middle class.  We tried to play ball.  They weren’t interested.  If they want to pass this on partisan lines, then fine.  We’ll pass it on partisan lines.

Oh, and if you think the plummet of the Dow today didn’t just put the American public behind this thing, then you’ve got another thing comin’.

One other thing, as a nice little cherry on top when we go to pass our progressive bill, I think all of the Dems in the House should yield their time to Dennis Kucinich.  If they want partisan, we’ll give ‘em partisan.

(btw, none of this will ever happen.  ever.)

[Update]

A new Rasmussen poll is out on the bailout:

A Rasmussen Reports national telephone survey conducted Sunday found that 33% of Likely Voters now favor the plan while 32% are opposed and 35% are not sure.

That was before the market tumbled.  How do you obstructionists feel about your electoral prospects now?