The Rasmussen Poll reports that voters overwhelmingly reject the “Paulson Plan.” Amazingly, there may be intelligent life on the planet after all. This morning, Mr Bernanke confessed that the real goal of the plan was to re-capitalize the banks, which basically means overpaying for the assets so that the banks can show profits. If you want to re-capitalize the banks, why not just - put capital in? Just buy super-preferred convertibles, essentially as was done for AIG? The answer is, of course, that would hurt the shareholders. Ben and Hank’s buddies, in fact. If, as proposed, they pass the re-capitalization through the P&L, then of course it will yield profits. And profits yield - bonuses! And bonuses will yield - campaign contributions! speaking engagements! corporate jet junkets! interns! Voilà! Problem solved! Anyway, after the political theater in Washington is over doubtless it will be passed without substantial change.

Edit: Good piece by Martin Weiss (Weiss Research’s business is rating banks):

1. Disregard data based on the list of troubled banks maintained by the Federal Deposit Insurance Corporation (FDIC). The FDIC’s list currently has 117 institutions with $78 billion in assets. However, based on a broader analysis of recent FDIC call report data, we find that institutions at risk of failure include 1,479 FDIC member banks and 158 thrifts with total assets of $3.6 trillion, or 36 times the assets of banks on the FDIC’s list.

2. Think twice before providing a broad bailout for U.S. debts given the wide diversity of mortgage holders and the great magnitude of the total debts outstanding in the United States. Just-released Federal Reserve Flow of Funds data show that, beyond mortgages, there are another $20.4 trillion in private sector consumer and corporate debts, plus $2.7 trillion in municipal securities outstanding.

3. Recognize that, among banks and thrifts with $5 billion or more in assets, there are 61 banks and 25 thrifts that are heavily exposed to nonperforming mortgages.