Who Knows?

The market was way down yesterday? Well, it was way up, today! What does it mean? Who knows?

Overnight on Wednesday night, the Fed and the central banks of other nations put together a cash package of $180 billion that seemed to do nothing to put the markets back on an even keel, as they opened down. $180 billion that seemed to do nothing! Fortunately, there were rumors that the Fed was going to take care of everything, so the markets shot back up! How was this going to work? What did it matter? The government would make sure it was all going to be OK.

As it turns out, the government is working on some mechanism to solve the financial mess.

The government is working on a sweeping series of programs that would represent perhaps the biggest intervention in financial markets since the 1930s, embracing the need for a comprehensive approach to the financial crisis after a series of ad hoc rescues.

At the center of the potential plan is a mechanism that would take bad assets off the balance sheets of financial companies, according to people familiar with the matter, a device that echoes similar moves taken in past financial crises. The size of the entity could reach hundreds of billions of dollars, one person said.

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Details of the plan were still being worked out Thursday night.

See? Problem solved! We can worry about how it will work and how much it will cost later.