US Congress has voted-out bailout package. It sends clear signals that US congress has little trust in Mr. Henry Paulson, who as chief of Goldman Sachs two years back, was a staunch advocate of lax regulatory practices. The opposing members see Mr. Henry Paulson's deal making tactics and drive for exorbitant profits responsible for current crisis as a leader on wall street at that point in time. I may be incorrect, however, timing of crisis and bailout could not have been worse when US is going to vote for next president.

If we take few steps back and look at USA, now it is time for congress to look at all expenditures and especially their defence expenditure where billions of dollars are being drained on war against terror. I don't know what is positive outcome, but it has certainly managed to bring Pakistan closer to Iraq. The time has arrived when USA should look at their own backyard and invest precious resources in their own country.

The US congress also believes that fundamentals of bailout package are flawed. A problem created by market should be solved by market. If we say regulators are participants of market in a way, then regulators should take moral responsibility and offer to tender their resignations. My guess is US congress is expecting more bad blood to come out before any medicine can take considerable effect to ensure survival.

The US congress also qustioned rational behind hurry shown in AIG bailout and they believe primary reason was 20% of Goldman Sachs liabilities with AIG. Clearly, AIG failure would have created similar conditions under which Lehman went for chapter 11. It may have also resurfaced mess created by CEOs and one of which happens to be current US finance secretary. It is also a case of conflicted interest. When situation turns from bad-worse-worst and wall street may force Oxford university to coin next word after 'worst', the parliament has a right to look into every step taken with sceptism and take a decision based not on short term relief but also on long term stability.

This whole debate has revised definition of capitalism and socialism. Does current crisis indicate that capitalism is nothing but human greed and can't survive on its own? Finally all capitalist are trying to hide under socialism cover from government. The crisis will host many brilliant debates in many parliaments and we may see world over financial framework being adjusted to accommodate capitalism under socialism. There is little difference between efficiency and milking out human element when sun promises to rise everyday. As darkness spreads, we ultimately find the balance between two was tilted in favor of later far too much as much as it can be fatal for not only market but whole economy.

We may find a detailed bailout package and not a blanket package proposed this time. US congress may also nominate few people to share responsibility with Fed Chief to prepare a bailout package. The package should provide quick relief on case by case basis keeping long term interests in mind. It should focus to relieve common man and this should be central point to bail-out financial institutions.

However, one question about extent of government control on markets remains open. At present, it may not be suitable to have a neutral debate on the topic because the current turmoil will pull more weight towards government control. One thing is certain - All financial risk analysis guidelines must be reviewed and re-written to evolve a robust risk model in future with an incentive process to adhere to it (There is potential business for Indian IT companies). It is truly surprising that top USA financial institutions, at the brink of failure, didn't even adhere to BASEL II norms and it certainly raises serious questions on current regulatory set-up. All the firms have not more than 3.0% Capital Adequacy Ratio.

I will not be going overboard if I recommend best financial minds in USA to seek inputs from Indian Banking regulation system which has kept a fine balance between regulatory bodies and market forces to keep an economy afloat for last 2 decades (I count period post 1991 budget) with minimum risk.