That was evident Friday when stock markets largely ignored passage of the legislation. The Dow Jones Industrial Average finished down 157.47 points, or 1.5 percent, at 10,325.38. The S&P 500 and Nasdaq posted similar percentage drops.

The stock market's continued slide and uninterrupted turmoil Friday in credit markets underscored that passage of the historic legislation is little more than a beginning to what is sure to be a long and complicated process of implementing the Emergency Economic Stabilization Act of 2008.

The rescue plan gives broad, unprecedented powers to Treasury Secretary Henry Paulson. Paulson, who was chairman of investment bank Goldman Sachs until 2006, can now purchase virtually any distressed asset he wants to help troubled banks return order to their balance sheets.

Critics view these powers as the antithesis of free-market principles, but the Bush administration persuaded lawmakers that having the government purchase distressed assets is the best and quickest way for financial institutions to regain trust in each other's balance sheets and in the companies that borrow from them.

"This is all about banks having confidence that they're going to get their money back," Commerce Secretary Carlos Gutierrez told McClatchy Newspapers.

In a statement after Congress approved his plan, Paulson warned that it won't be a panacea.

"There is no one-size-fits-all solution to alleviating the stress in our financial system. Each situation will be different, and we must implement these new programs with a strategy that allows us to adapt to changing circumstances and conditions, and attract private capital," Paulson said.

"The broad authorities in this legislation, when combined with existing regulatory authorities and resources, gives us the ability to protect and recapitalize our financial system as we work through the stresses in our credit markets."

With the guidance of a bevy of former Wall Streeters, Paulson must decide how to make the federal government a purchaser of toxic assets no one else wants. Most are bonds, and the mortgages of ordinary Americans form their underlying collateral.

The orphaned bonds are commonly called mortgage-backed securities. Few investors want them so long as home prices keep falling and foreclosures soar, raising doubts about the soundness of bonds supported by mortgages that may go unpaid.

Even after working feverishly over the past two weeks, the Treasury will not buy its first distressed asset from a bank for roughly six weeks, and almost certainly not until after the Nov. 4 elections, The New York Times reported.

"We would expect the Treasury to start ramping up the size of auctions over the next several weeks to fund the program -- with an initial target of perhaps $100 to $200 billion in the program account by mid-November, but ... actual purchases of securities are not likely until perhaps the second half of November," Brian Bethune, an economist with forecaster Global Insight, said in a note to investors.

Words into action

Over the next several weeks, Treasury must convert the legislation -- so vaguely worded that it amounted to a virtual blank slate -- into an action plan.

"They need to figure out how best to ensure there are no conflicts of interest; they need to think about accounting treatment, how sales affect balance sheets of firms that have like assets," said Travis Larson, a spokesman for the Securities Industry and Financial Markets Association.

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