Deal summary:

• Congress approved an unprecedented $700 billion government bailout of the battered financial industry on Friday and sent it to President Bush for his certain signature.
  
• The final vote, 263-171 in the House, a comfortable margin that was 58 more votes than it garnered on Monday.
  
• Bush was poised to make a statement on the historic vote.

IS THE PACKAGE TOO LATE AND TOO "SMALL" NOW?

News on bailout aproval from Bloomberg:

"Oct. 3 (Bloomberg) -- Congress passed a $700 billion financial-market rescue plan designed to unlock credit markets, reversing a rejection that sent global stock markets plunging and threatened to worsen an economic slowdown.

The legislation, a bipartisan effort to restore confidence in the nation's banking system, authorizes the government to buy troubled assets from financial institutions reeling from record home foreclosures. The bill contains $149 billion in tax breaks and affirms regulators' power to suspend asset-valuing rules that companies blame for fueling the crisis.

President George W. Bush wants to sign the bill into law ``as quickly as possible,'' White House spokesman Tony Fratto said before the vote. Bush will make a statement at 1:55 p.m. Washington time.

The House approved the measure in a 263-171 vote, four days after rejecting an earlier version. The bill's defeat on Sept. 29 caused a 778-point drop in the Dow Jones Industrial Average, prompting dozens of lawmakers to reverse their vote on the legislation, the government's largest intervention in the markets since Franklin Roosevelt's New Deal.

..."

Source: Bloomberg

I think the current $700 Billion bailout is now too late and too "small":

• US Congress clearly does NOT really understand that timing is everything to restore market confidence. Last week would have been perfect timing. Today...a bit too late.  $700 Billion package is not just about the size and detail of the deal. Timing is of the essence. So US Congress have missed  timing....lucky it is only a week late...but late nonetheless.
  
• Global confidence on the global credit market is very very low. The global credit market has been freezing since few weeks ago. So it is not just related to US credit market and US investors' confidence.
  
• Sinking confidence in the global market requires global rescue package that involve affected countries from all continents.
• The total size of global Credit market is in the trillion of dollars not just hundreds of billions and hence, restoring confidence in this market will require global bailout package not just US bailout package. $700 Billion may appear large to US investors, but very small to all global investors.
• Housing price will not quickly reverse its declining mode because of this package. European and Asian once super-hot real-estate market has also been declining. The size of the global real-estate market is also in the trillion of dollars
• US stock market does not go up significantly after the announcement which means investors expect further market volatility (on the bearish side) and additional bailout packages globally (most likely scenario).
• Short-term speculators and traders have lost their shirts on the market due to delay of the bailout package approval and hence, despite the news that bailout got approved today, market just went up a little bit. Apparently , there is no more money to bet big on risky market. Why? Hedge funds and private equity funds are sufferring their worst-ever performance since 1987 on aggregrate. Hence, conservatism is now IN big time. SOUND RISK MANAGEMENT and NO LEVERAGE WHATSOEVER are now the prevalent lunch words in Wall Street.
• Remember "It is ain't over until it is over." And it is not over until real-estate market is starting to stabilize which could be many years from now.
• More risky banks will fail and join the list of FDIC's failed banks not because US government is now ready to bail them out by buying all their toxic MBS and CDOS, but because depositors have already lost their confidence in the US financial system and now are in the process of withdrawing their money. Restoring confidence takes time especially when the regulators/congress also take a long time to approve a bailout.