The Smell Of Napalm In The Morning

Felix Salmon sizes up the current state of affairs:

No one is a winner here. Yes, JP Morgan looks as though it's got itself a good deal for WaMu -- basically buying the bank for $1.9 billion unencumbered by any corporate debt or preferred stock. JP Morgan also now owns the bank which was largely responsible for reinventing retail banking over the past decade, and WaMu's abilities on that front will be very valuable at for the Chase brand. But unless House Republicans start getting constructive on bailout negotiations today, no financial institution is going to look very healthy. (And top management at Goldman Sachs will look like geniuses for raising $15 billion just before everything fell apart.)

The vague sketch of the House Republican proposal in the NYT shows something miles removed from the bailout as it has been understood until now. Bush, Paulson, Bernanke, Obama, House Democrats, and the Senate all seem to be on board with Plan A; only House Republicans are supporting Plan B. And where McCain stands on all this is anybody's guess. If House Republicans thought they were doing him a favor by waiting for him to turn up before blowing up the negotations, they miscalculated badly.