Anyone who thinks Paulson's $700 billion bailout, which privatizes profits and socializes debt, will save the US economy, should think again.

London-based investment consultancy Independent Strategy says Paulson's package is just stupid. In its report here, it warns:

"Things have got worse more quickly than we expected. The 'second' Paulson package is even more stupid than the first, demonstrating that it is possible for humans, but not dogs, to have an inverse learning curve.

"It does nothing to write off the dud assets of banks in a meaningful way, close the hopeless and refinance (through temporary nationalisation) those institutions worth saving, while wiping out existing shareholders and management. The package continues to bail out banks at unrealistic prices and potentially their borrowers too, who need equally to be punished for over-borrowing and overconsumption, if the underlying causal flaws of the credit cycle are to not to be repeated ... All of this points to a continued freeze of credit markets, more insolvencies and a worse global economic recession. It is no time to bet on an optimistic outcome of misguided and tardy policy reactions."

As the International Herald Tribune notes, things are so far gone now that it will take more than belated policy activism to get things moving again.

And as Howard Davidowitz, head of Davidowitz & Associates Inc told the Los Angeles Times, we can expect to see up to 8000 stores closing in the next few weeks. "This will be the worst Christmas shopping season in a century", he said.