bMighty vs. Bernanke - Good News Edition?

It seems that the $700 billion US bailout was just too puny to do the job. The global bank bailout proposed this weekend at the G7 conference raised the ante to more than 1 trillion euros, and sent Wall Street soaring. And it's not a moment too soon for business owners, as almost a fifth of US small businesses say the economic conditions threaten their very survival.According to the BBC, Germany alone will toss in 500 billion euros ($683B), while France will contribute 350 billion, Holland 220 billion, Spain 100 billion, Austria 85 billion, and Italy "as much money as needed."

This huge hoard of cash will help guarantee lending between banks and be used to take stakes in troubled financial institutions.

The initial results: Stocks are up an astonishing 936 points, with most indexes enjoying rises of 11% or more. And many tech stocks did even better: Microsoft bumped up almost 19%, Google gained almost 15%, and Apple jumped almost 14%. (Of course, these gains don't erase last week's 18% losses, and we don't know if the advances will hold.)

Overall, The rANT is impressed, but also a bit chastened to realize that the United States is increasingly becoming a bit player in the world economic scene. The NY Times quoted French President Nicolas Sarkozyputting it this way: Europe, a united Europe, has done more than the United States in total amounts... The time of everyone for themselves is over.

More to the point, though, it's also still too early to tell how this will affect the credit markets (like the Libor and the TED Spread), which remains the real danger spot. Initial indications were at least moderately positive, as the 3-month Libor rate fell to 4.75 percent Monday from 4.82 percent Friday, but that is still more than 4 points higher than the Treasure rates, keeping the TED Spread in uncharted territory. Look to see what happens to those numbers to know where this massive global effort will succeed in stemming the crisis.

You can bet business owners will be watching. According to a survey conducted last week by American Express OPEN, nearly one in five (18%) small business owners risk going out of business because of the economic climate. They survey also revealed that 63% of small business owners say the credit tightening has already has affected their business, with 79% losing sales, 51% tapping personal assets to pay business expenses, and 12% laying off staff. Almost a third (32%) believe they will have to downsizing in the future, while half (50%) say they'll have to work longer hours and cut back on marketing (52%). 58% expect lower profits while 33% say they will raise prices.

Some 55% said the US bailout would help stabilize the economy, but only a quarter said raising the limit on FDIC insurance of bank deposits from $100,000 to $250,000 will help them.

The rANT says we saw some progress today, but this ain't over yet.