Dow hits new lows ..

and the FT100's not much above last months low ... although they were lower in 2002-3.

It'll get worse before it gets better. I gather Japanese markets are up overnight, so today might see some respite.

The Northern Rock saga continues. As part of their sustainable business model they created a Channel Island company (or was it a trust ?) called Granite, sold it their mortgage book, and then Granite sold mortgage-backed bonds to global investors.

Now : "The government is orchestrating the wind-down of Granite, the complex web of companies created by Northern Rock to raise billions of pounds on international capital markets using its mortgage book as collateral. Granite's £35bn of assets will be sold and investors in the bonds it has issued will be repaid."

Presumably 'selling the assets' means selling on the loans to someone else. Correct me if I'm wrong, but this wouldn't seem to be the best financial climate for unloading £35bn of mortgages.

If they can't raise enough money ? "Taxpayers could face a loss of £3bn on the wind-down."

Remember the Paulson plan, to buy out 'troubled assets', rejected by Congress then passed because otherwise the entire world financial system would collapse ?

Since then, if Caroline Baum is correct, Paulson and his advisers have been making it up as they go along.

Every time Treasury Secretary Hank Paulson updates us on the government’s efforts to stabilize the financial system and announces the latest twist in the Troubled Asset Relief Program, I get a sinking feeling in my stomach.

I know he will introduce a host of new acronyms for new lending facilities to rescue new asset classes from new and anticipated distress.

And I know that, no matter how hard I focus on what he says or how many times I read the press release and accompanying stories, I won’t be able to get my arms around the details.

And then it hits me. There are no details. Only a set of loosely linked concepts -- something between a trial balloon and a hot-air dirigible -- that flows out in a stream-of- consciousness format, with the details to be filled in later.

There were no details when Paulson delivered a three-page draft of a bailout proposal to Congress in September, authorizing him to spend $700 billion buying “troubled assets” from banks, with no questions asked and no provision for oversight.

There were no details when Paulson announced in October that he was shifting gears and using the congressionally authorized funds to recapitalize the banks, a provision of the Emergency Economic Stabilization Act of 2008 and an option Paulson had dismissed weeks earlier in favor of buying troubled assets through some kind of reverse auction.

... Too bad it was a non-starter ...

Last week, Paulson announced that TARP, the program for buying troubled assets, was dead. (How can you have a TARP without the “T” and the “A?”) In its reincarnated form, the program will be reoriented toward helping the consumer.

There were no details.

Now to be fair, it may well be that what prevented ? postponed ? world financial meltdown eight weeks back was simply the fact that somebody was being given lots of money to do something. Markets are strange things. In that context the details aren't so important. But it certainly doesn't fill one with confidence to realise that the people at the top during the years when the disaster was being constructed don't seem terribly sure as to what to do next.