Nobody has nearly enough information to know with any degree of certainty if Bush’s massive 700 billion bailout and Obama’s approximately 800 billion dollar  stimulous packages are going to help or hurt us in the long term.  Clearly in the short term this will make the economy look better, but it will also leave us with all the unintended bailout consequences money can buy.   Big money means big unintended consequences and when you are talking trillions of dollars you are talking about Government spending unlike anything we have ever seen.

The New York Times has a good spreadsheet summary of who got the money, though I always hate it when charts use the smaller number “in millions” to reflect huge numbers.   e.g. on this chart the number is a million times greater than the number.

TARP Chart at NYT

Although the extravagance and fervor of CES 2009 made the economy look pretty good to me,  it was a huge contrast to  the barren corporate landscape in the rest of Las Vegas where commercial real estate is on hold, visitation is down, and you can begin to sense the trouble brewing throughout much of the economy there.   More significantly the broad numbers suggest we are firmly in the grips of recession and I think no responsible voices are suggesting things are going to spring back anytime soon.    In my view the markets are now waiting for Obama to take office.   If I had to try to call the shot here I think I’d predict we’ll something of  a “fake rebound” in the markets when Obama takes office and announces plans.   The high optimism will lead to higher prices but this will soon fade as more and more bad news pours in and millions more lose their jobs in 2009.    In my opinion the *best case scenario* in this economy is that we’ll have a bad 2009 and start to recover in 2010.    The *likely* scenario is that we’ll have a very bad 2009 and 2010 as the entire global economy shrinks, shredding the excess home values and company valuations of the past decade, and in 2011 or so we’ll start to stabilize.

However even though it appears the bailout money is not doing much so far I think the stimulous package will change the game very much in favor of public spending and companies that do infrastructure work.   We’ll see more bridge repair than at any time in history and a lot of spending on energy innovations, education, and health.   How this will filter into the broader economy nobody knows and the failure of the first $350,000,000,000 bailout to do much is not a positive sign.