The plan was rejected by the House of Representatives on Monday (Democrats as well as Republicans) as Congressmen, many of whom are up for election in November, responded to loud objections by Main Street voters.
Senate leaders reckon that adding tax breaks and insurance on a higher bank deposit level of $125,000 will mollify voters, many of whom were shocked by the sudden fall in their investments as the market plummeted on Monday.
If the Senate approves the deal, and it's still an ‘"if", Congressmen will vote again, probably on Thursday.
If the deal doesn't go through the US will be left with its current patchwork quilt of the government rescuing some institutions and letting others go to the wall, which backfired disastrously in the case of Lehman Brothers, while US lending remains gummed up.
The US government has already agreed to lend $25bn to trouble carmakers anxious to invest in lower energy models, acting as the lender of first as well as last resort.
Surely not even the most dyed in the wool Republican wants this to be the new lending reality?
Brown mulls UK bailout plan
PM Gordon Brown has hired bankers UBS (which has lost a fortune in the credit crunch) and NM Rothschild (which hasn't) to advise him (not Alistair Darling) on ways to bring back confidence in the banking system.
One of the things being mooted is an insurance guarantee on all UK bank deposits, a trifling £1.9tn.
As a first stage Brown says he'll lift the guarantee on current bank deposits from £35,000 to £50,000 (but only when the markets calm down, whenever that may be).
The UK treasury doesn't have £1.9tn (does anyone? What does it look like?) so the bankers evidently have some work to do to earn their fees.
Are the bean counters to blame?
So-called Fair Value Accounting was introduced a couple of years ago to provide more transparent and accurate auditing of assets.
In particular things like securitised mortgages, which got us into this mess in the first place, had to be "marked to market", ie valued on an ongoing basis of what you could sell them for.
And, of course, at the moment you can't sell them for love nor money.
The result is that writedowns of these assets have been much more severe than they would have been a few years ago (when auditors would have valued them on a longer term basis).
There is speculation in the US that this practice will be changed by legislation. The Securities and Exchange Commission and the Financial Accounting Standards Board have moved to prevent this by, in effect, relaxing the rules while the credit markets make valuation of such assets difficult or impossible (unless it's nil).
There's no doubt that Fair Value Accounting has made life harder for banks like HBOS in the UK too, not necessarily by making them raise more capital (which they needed to anyway) but making them do so in a rush and thereby spooking the markets.
Unfortunately not even the wizards of the accountancy profession can put the toothpaste back in the tube.
Doubts emerge over Lloyds/HBOS deal
HBOS shares have continued to tank despite the planned rescue merger with Lloyds TSB.
The deal was struck at 188p a share but HBOS shares sank to 122p yesterday, leaving Lloyds TSB room to renegotiate the deal if it so chooses.
It says it won't, and Gordon Brown said yesterday that it won't and he's the one waiving competition rules to allow the deal through, but Lloyds TSB shareholders might disagree.
Some of the bank's investors fear that HBOS's mortgage commitments will endanger the hitherto well-funded Lloyds TSB.
Most of the money it lends is raised from deposits whilst HBOS depends on the money markets for a big chunk of its lending, something the new merged bank would presumably still need to do.
Other investors fear that the merged bank would need to raise more capital (Lloyds TSB stayed aloof from the recent round of bank capital raising, a decision it might come to regret).
At the moment banks are raising most of the funds they require from the Bank of England not the money markets but that can't go on forever.
So this is a tricky one for Lloyds TSB shareholders.
Bank in the spotlight over interest rates
The Bank of England's Monetary Policy Committee has turned its face against interest rate cuts (with the noisy exception of Professor David Blanchflower), preferring to concentrate on reducing the inflation rate, currently at 4.7% against its 2% target.
But some big guns are taking aim at it now.
The latest was Sir Terry Leahy, CEO of Tesco, speaking in the aftermath of more strong results from the supermarket giant yesterday.
Leahy told the Today programme that food prices were falling (not stabilising, falling), leaving room for the Bank to cut rates.
Tesco also said it was planning to enter the mortgage market later this year, so you can't say Sir Terry isn't doing his bit.
Food along with energy has been blamed for the spike in inflation and if Britain's biggest grocer says the price of food is coming down then so, in theory, should inflation (oil prices have dropped sharply too, of course).
The Bank is expected to cut rates by a quarter point in November, when it produces its latest inflation report, but many are calling for a cut now.
The Daily Mail's respected City editor Alex Brummer wrote yesterday that a half point cut was needed now, which would have been warmly greeted by those keen Mail readers in Downing Street.
PM Gordon Brown and chancellor Alistair Darling can't say anything in public about the Bank and interest rates because Brown handed the decision solely to them, trumpeting this as his great reform through the good times.
But they did invite Bank governor Mervyn King to Downing Street for breakfast the other day, so maybe they had a word in his ear.
Surely even the Bank of England, whose coffers are rapidly emptying through lending as the money markets stay gummed up, will see the need for some radical action?
Stephen Foster is a former news editor of ±±¾©Èü³µpk10, former editor of Marketing Week and Evening Standard ad columnist. He is a partner in Editorial Partnership and writes the blog and Politics of the Media for Brand Republic.
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