When problem is severe, drastic solution could be better than bandage aid. I mean that getting in high unemployment and/or depressionary environment could be still better than printing another 700 billions and waiting for the point when this amount gets vaporized. It may happen quickly enough. Nobody (in politics) cares about fundamental problems. When Fannie and Freddy (i.e. government) buy every mortgage in sight and every foreclosure is never buyer's fault, what kind of accountability could be expected from the industry. I see only one implication to retail investment: long-term investing loses sense. As current crisis shows shareholders are the only guys suffering actual losses, and these crises will be more frequent in future.
I don't necessarily disagree. As I posted on another thread, this doesn't solve the problem, it just postpones it. The economy will get a lot worse before it gets better. A deflationary depression is harsh medecine, but may turn out to be better than the cure - I really don't know what the economy will do in response to this.
If it hadn't gone through, I would have known what to do (sell MFN, short the market), but this way, I guess I'll stay where I am.