[Ghoulish Delight]

Finally got around to listening to the episode of This American Life about the freeze and the bailout. While obviously an oversimplified view, it once again does an excellent job of giving an overview of the mechanisms involved. Their conclusion was that while nothing is ideal, the current method being used (the treasury getting actual stock in banks in return for bailout money instead of buying worthless debt at made up prices from them) has a much higher chance at success in terms of restoring market confidence and liquidity with relatively little risk to the treasury.

It also detailed how exactly things turned from investing to gambling, and how regulation might have had a chance at preventing this (the key thing being the lack of regulation on "credit default swaps", which I won't attempt to explain myself). And while regulating the CDS market doesn't guarantee that investors wouldn't have found some other way to do that kind of gambling, it would have been better than letting it run free. As someone on the show put it, just because there's still the risk someone might break your window, you still start by closing and locking your back door.