Well, it looked as though Congressional Republicans were going to step up and stand on principal, but as it turned out, they moved a couple of commas around and pretended they looked after your interests. The bailout agreement has been reached and $700 billion tax dollars are about to be given away.
Of course, the healthy banks aren't going to participate. Better to absorb the loss than face the tax and equity consequences of participating in this rip off. The government will get bogus paper, issued by the now government owned Freddie and Fannie, by giving cash to the most incompetent lenders in the market. One of the stipulations in the bill is that the government renegotiate the loans that back this paper. In other words, they've been ordered to take steps to immediately devalue the investment they just made. If you are a mortgage holder and are not behind, you keep the deal you have. If you are in default, you get to negotiate a better deal. What do think that will do to the mortgage market? The feds get warrants in the companies that do participate (again, the weakest in the industry) and they'll have you believe we're all going to come out ahead on this venture.
They may be able to hide the losses since they now will own both the issuing authority and the bogus paper they issued, but you will NEVER see a return on this investment. Recall the Savings and Loan bailout was supposed to cost us around 50 billion dollars. In the end it cost 150 billion and that involved hard assets. There are many more middle men in this deal. Lawyers are going to make money. Taxpayers are going to get squat.
It was all designed to hide the fact that the government essentially ordered the give away of homes. Obama said today that the whole mess "started on Wall Street". Wrong. Wall Street is where it ended. They were the patsies intended to take the fall from the beginning. It started in DC. Now they're all laughing, all the way to the re-election campaign. They not only got away with it. They're going to be hailed as heroes for it.