The 700 Billion bailout failed to pass the lower and more democratic house (national character rather than federal) with those in tight electorates voting against. Despite this the fed pumped 630 Billion into the system anyway and markets still fell. The banking system is too big for one nation-state - even a hyper-power with the reserve currency - to effect. The money flows are simply too large.
It most likely means that the only way a nation-state can recapitalize failing institutions is by nationalization and taking over the assets like the US did AIG. This is not politically acceptable in the US, and rightly so, as it is considered socialism, however it leaves the other alternative that these bank fail via the free market and the remaining stronger banks and investment houses survive and expand in that environment.
This can mean economic turbulence within a voting cycle, and that means politics will get involved. Unfortunately for the US the republican party is without leadership and the White House is distrusted by Congress.
Update: The market indexes were down about 7% today. While dramatic, it will be earnt back quickly. It isn't the end of the world.
