Finally, Washington agrees on a financial bail-out

Republicans and Democrats win concessions, but this crisis still has some way to go

American lawmakers have finally agreed on a bailout plan to take to Congress. While short of what of what the Bush administration initially sought, it still reflects a massive commitment by the US government. All sides seem to agree it's an improvement, being less of a blank cheque than it was.

Even so, as the Washington Post says, "The plan would give Paulson broad latitude to purchase any assets from any firms at any price and to assemble a team of individuals and institutions to manage them."

It's now on Congress members to vote aye. Even Warren Buffet has said it's a vital deal, but the Post's Business columnist Steven Pearlstein warns that it ain't over yet.

"Global investors no doubt will cheer the weekend's political breakthrough, focusing less on the details than on the perceived commitment by the United States to do whatever is necessary to prevent a meltdown in global financial markets.

But nobody should view even this effort as sufficient to keep the U.S. economy out of recession, stabilize housing markets or prevent the failure of additional banks, investment houses, insurers and hedge funds. Although more than $600 billion in private-sector credit losses have already been posted, a number of private and public-sector analysts now estimate that won't be even half the final tab from the bursting of the greatest credit bubble the world has seen."

The New York Times' Paul Krugman agrees, arguing that the next President will also have plenty of cleaning up to do. For a start, there are still plenty of American mortgages that are yet to fall over. Only now they'll be the government's problem.

But the shorter term question is how Wall St will react when the US markets open in a few hours. They may not have had much sway when it came to designing the bail-out, but they still hold a fair whack of power when it comes to deciding just how successfully it sticks.