Today it seems more likely that the revised plan, HR1424, summarized in this letter from Dr. Peter Orszag, Director of the Congressional Budget Office to Sen. Chris Dodd, Chairman of the Finance Committee (http://management-consultant-at-large.googlegroups.com/web/hr1424Dodd.pdf?gda=PWOcikAAAAB1iikhPwrMaGtUQl2cT77vPXVEsKam0wN6cwFy2ZPqug7GdXbR4XadjXE3rLkRe5ptxVPdW1gYotyj7-X7wDON) will pass. As the details and intent of the Emergency Economic Stabilization Act of 2008 become more clear, we are learning more about the extent of this crisis. Breathtaking as the $700 billion number appears, it is small relative to the total amount of junk afloat in the global waters of the system. Credit default swaps alone are estimated to be in excess of $60 trillion (pause, take deep breath, and read that again).

Rather, according to Orszag, “The Treasury proposal appears to be motivated primarily by concerns about illiquid markets.” That makes sense. A lame duck Congress and a lame duck Administration would have no chance of passing a bill of this magnitude were it not a stopgap measure aimed at alleviating an impending crisis.

Let’s watch the movement in letters of credit over the next week to see if there will be any goods at all on retail shelves this holiday season. It would not be a good time to be selling airfreight capacity.

I’ve been following this crisis closely on my own blog, “A Management Consultant @ Large” at http://jpfarrell.blogspot.com.