Just a few quick observations tonight, after the worst point loss in Dow history.

First, I gotta point you to my new hero, Rick Santelli, who is for my money the straight-talkin’est man on the Street. His take on the bailout failure today was typically clear-headed: http://www.cnbc.com/id/15840232?video=872162980&play=1  His segment starts around 5:50 in. Santelli for prez!

Second, I should explain why I posted John Mauldin’s essay yesterday.  As long as we are working with conventional rules of the game and inside-the-box thinking, then I think his assessment was correct.

But for whatever reason, the voters rejected it about 30-to-1 and made their displeasure known loudly to their Congressmen, who caved to the pressure.

To be clear, I think the bailout proposal submitted was bad, and that the voters were right to reject it. It would have done nothing for the little guy and would have amounted to a huge bailout for the banks and their out-of-control leadership. This truly is a situation that calls for outside-the-box, unconventional thinking and conservative solutions, but those are complex issues beyond the ken of most laymen (and Congressmen) and I honestly didn’t think that the wishes of the masters of Wall Street could be overridden.  So it was a mixed, but pleasant suprise to see the proposal fail.

But that means we are now faced with the prospect of having to “go back to the drawing board,” as McCain put it today, and it will take days or weeks more to come up with an alternative proposal. We may not have that kind of time before another mega-meltdown on the Street. Due to the Jewish New Year holiday, no major votes are expected until Thursday. The next two days could feel like an eternity for investors.

I continue to advise that people remain in cash. Don’t buy anything, unless it’s a small short side position or gold. Unless you’re willing to ride out another wicked down-leg or three, selling might be the prudent course of action, even with many stocks dragging the bottom already. Because while they’re still changing the rules in the middle of the game, the safe move is not to play at all.

These are extremely dangerous times in the markets, and although many voters had the good sense to reject this bailout plan, I doubt that many of them understand the risk they took in doing so. We could have a long way to fall yet, and few appreciate how the pain on Wall Street can quickly trickle down to Main Street. Bailing out the “fat cats” may have been the wise choice after all, but we have turned our back on that option. I can only wonder what will happen next.

Good luck everybody–and keep yer fool head down.