"Mr. Paulson worked as Chairman and CEO of Goldman Sachs until he was sworn in as U.S. Treasury Secretary on July 10, 2006.  Exotic instruments created and peddled by Goldman around the globe while Mr. Paulson was Goldman's Decider have contributed to the collapse.  His former firm has also benefited to the tune of tens of billions from taxpayer money already doled out by the Federal Reserve.  Other firms like Merrill Lynch and Citigroup/Smith Barney that broke the backs of Fannie Mae and Freddie Mac by selling them billions in explosive derivatives have also seen their prior execs appointed to plum spots in the "rescue" mission.

"And expect the bailout proposal to become more corrupted as the days go by.  (The proposal reminded me of that cover of BusinessWeek back on May 13, 2002 when the publication posed this question about Wall Street: "How Corrupt Is It?" They answered their own question with a giant picture of a snake encircling the metal pole holding the street sign for Wall Street.)  The bailout proposal was so fluid that while I was reading its 106 pages at the web site of CNNMoney on Sunday evening, September 28, 2008, the screen went blank at 7:59 PM.  Minutes later, I was reading a different version of the proposal, which had now grown to 110 pages.  Fortunately, I had printed out a hard copy of the earlier version and went line by line to see what the Wall Street banksters were up to.

"Of particular interest, on page 6, where previously the new Office of Financial Stability would be headed by an Assistant Secretary of the Treasury who would require Senate approval, 13 more words were added at the end of the sentence: "except that an interim Assistant Secretary may serve pending confirmation by the Senate."

"Realistically, all they would need to do is keep sending conflicted candidates for confirmation hearings and many billions could be spent before the Senate vetted and confirmed the candidate. 

"But the most duplicitous and frightening aspect of the plan, as always, was to found, buried in the back of the document, located there in the hopes everyone would have  fallen asleep from the legalese before they made it that far.  There’s the innocuous sounding Section 128, which was in both the original and amended versions, and says simply:

"Section 203 of the Financial Services Regulatory Relief Act of 2006 (12 U.S.C. 461 note) is amended by striking "October 1, 2011" and inserting "October 1, 2008." 

"What would this effectively do?  It was intended to speed up the enactment of this section of the law from 2011 to this week.

"And what is the impact of the change in this law? (Take a moment to let this sink in.)  This wonderful bipartisan bailout proposal, negotiated into the wee hours of the morning by sleep-deprived members of Congress was designed to come with a furtive Trojan Horse embedded by Wall Street lawyers.  Banks already in trouble for lack of capital would get to hold as little as "zero" capital for transactions. 

"But it does solve one giant mystery.  All of Wall Street has been attempting to understand why firms like Goldman Sachs and Morgan Stanley, who have concentrated on mergers, acquisitions, stock and bond underwriting for more a cumulative 212 years, decided in a heartbeat to enter the bean counter world of retail banking and transform into bank holding companies.  (That's like asking General Motors to retool overnight for washing machines.) Now we know.  Effective this week, if this bailout proposal would have passed in its current form, these firms would have had a new best friend at the Fed that was going to let them hold zero reserves for transactions. No wonder the stock of both firms sold off yesterday when Congress rejected the plan: Goldman closed down 12 per cent; Morgan down 15 per cent.

"The Trojan Horse in the bailout plan also solves the mystery of how loss-riddled, serially corrupt Citigroup, now run by the former head of a hedge fund, was allowed by the FDIC yesterday to buy $400 Billion in deposits from Wachovia, giving this crippled global tyrant 30 per cent of insured bank deposits in America."

The stench from the current financial system is overpowering.

95 Democrats voted against this monstrosity for the right reasons: no protection for regular Amercans or accountability demanded of perpetrators; while most of the 113 Republicans voted against it for the wrong reasons: not enough forgiveness and tax giveaways for the wealthy Wall Streeters who caused this debacle with the help of the Bushite Hoover regime of the 21st century.

But the worst part is that those House members who voted for this dangerously flawed House compromise bill voted against the American people and for a business as usual, corrupt and rotten financial system.