Deal Breaks Down; that + WaMu = Look out below tomorrow

This is really getting good.

The bailout deal, proposed last week and sorta-kinda agreed upon Thursday afternoon, may be toast. In any case, it's unlikely to be sorted out before the weekend, meaning tomorrow is a bad day to be in the market. Not to mention that Washington Mutual failed.

The public may support the rejection of a deal. They figure they're screwed either way, and are ready to take a hit themselves just for the satisfaction of seeing Wall Street collapse.

But ultimately it won't come to that. It probably means that more punitive measures against the executives of troubled firms will be in the plan, plus a public stake in the companies. Or maybe the GOP will force a restructuring of the plan into more of a "Swedish-style" solution. Many, many options are in the air.

In any case, the "long and deep recession" Bush warned us about is, in my opinion, the best-case scenario. That's if we come up with a plan and pass it. Do nothing and we've got our first depression since the Big One.