For me the $700bn package is analoguous to topping up the oil on an engine thats on fire. You can oil it as much as you want but it's not going to make it run any better. In fact it may just burn into nothing before it even makes it into the engine...
It will be interesting to see how the government treats B&B. I know someone who had a Northern Rock mortgage and lost his job shortly after the takeover. Jobs in his sector are rarer than the proverbial rocking horse droppings at the moment so he's working as a postman, a pizza delivery boy and a barman. He wouldn't need three jobs if the Government hadn't jacked up NR's variable mortgage rate to try and force people to move their mortgages elsewhere. The idea is all well and good in principle but it's not particularly realistic in this climate. Banks aren't exactly falling over themselves to hand out mortgages at the moment.
For what it's worth, I don't think the $700bn bill passing will make much difference. It might starve off the breakdown for a couple of months but when you consider that the Treasury added $650bn of liquidity to the market yesterday and it made next to no difference, what chance does this initial $250bn tranche have?
Last thing, when the shorting rule ends on Thursday, there will be more pressure on Congress to pass the bill. Shorting will have an amplifying effect on the existing instability and could really make things "interesting". I just wish I had two ha'pennys to rub together as it will soon be a very good time to buy into the equity market...