According to reports late tonight, negotiators have (re-)reached a tentative deal on the bailout of the financial system. Full story here, but the gist as follows:

• $700-billion in total
• $350-billion immediately, with some of that earmarked for the insurance initiative championed by House Republicans
• "Reasonable" limits on severance packages
• Warrant coverage
• Some sort of tithing of the financial sector in five years if the bailout isn't profitable
• Government must renegotiate bad mortgages it acquires to try to keep people in houses
• Full text Sunday, as is a House vote, and then a Senate vote Monday

I'm sure there'll be oodles more details later, but this is seemingly the gist. There is not enough here yet to know how to really feel, however, so I'm going to have to hold my own fire/praise/indifference until the morning. I will say that the insurance scheme still strikes me as unworkable -- how do you get undercapitalized banks to pay into a scheme to bail themselves out? -- as does the transparently political tithing idea. And don't even get me started about the total dollar figure, which is far lower than will eventually be required.

Here is summary text of the bailout agreement, via Nancy Pelosi's office. Boasting about cutting the Paulson $350-billion is specious, as is crowing about the Democrats requiring reforms. I hate politics.

REINVEST, REIMBURSE, REFORM

IMPROVING THE FINANCIAL RESCUE LEGISLATION

Significant bipartisan work has built consensus around dramatic improvements to the original Bush-Paulson plan to stabilize American financial markets -- including cutting in half the Administration's initial request for $700 billion and requiring Congressional review for any future commitment of taxpayers' funds. If the government loses money, the financial industry will pay back the taxpayers.

3 Phases of a Financial Rescue with Strong Taxpayer Protections

    * Reinvest in the troubled financial markets … to stabilize our economy and insulate Main Street from Wall Street
    * Reimburse the taxpayer … through ownership of shares and appreciation in the value of purchased assets
    * Reform business-as-usual on Wall Street … strong Congressional oversight and no golden parachutes

CRITICAL IMPROVEMENTS TO THE RESCUE PLAN

Democrats have insisted from day one on substantial changes to make the Bush-Paulson plan acceptable -- protecting American taxpayers and Main Street -- and these elements will be included in the legislation

Protection for taxpayers, ensuring THEY share IN ANY profits

    * Cuts the payment of $700 billion in half and conditions future payments on Congressional review
    * Gives taxpayers an ownership stake and profit-making opportunities with participating companies
    * Puts taxpayers first in line to recover assets if participating company fails
    * Guarantees taxpayers are repaid in full -- if other protections have not actually produced a profit
    * Allows the government to purchase troubled assets from pension plans, local governments, and small banks that serve low- and middle-income families

Limits on excessive compensation for CEOs and executives

New restrictions on CEO and executive compensation for participating companies:

    * No multi-million dollar golden parachutes
    * Limits CEO compensation that encourages unnecessary risk-taking
    * Recovers bonuses paid based on promised gains that later turn out to be false or inaccurate

Strong independent oversight and transparency

Four separate independent oversight entities or processes to protect the taxpayer

    * A strong oversight board appointed by bipartisan leaders of Congress
    * A GAO presence at Treasury to oversee the program and conduct audits to ensure strong internal controls, and to prevent waste, fraud, and abuse
    * An independent Inspector General to monitor the Treasury Secretary's decisions
    * Transparency -- requiring posting of transactions online -- to help jumpstart private sector demand

Meaningful judicial review of the Treasury Secretary's actions

Help to prevent home foreclosures crippling the American economy

    * The government can use its power as the owner of mortgages and mortgage backed securities to facilitate loan modifications (such as, reduced principal or interest rate, lengthened time to pay back the mortgage) to help reduce the 2 million projected foreclosures in the next year
    * Extends provision (passed earlier in this Congress) to stop tax liability on mortgage foreclosures
    * Helps save small businesses that need credit by aiding small community banks hurt by the mortgage crisis—allowing these banks to deduct losses from investments in Fannie Mae and Freddie Mac stocks

You can't go very far without someone telling you how the credit crisis is being sprung on an unsuspecting electorate as some sort Bush Administration election surprise. I'm not sure how it helps McCain, but let's give that a pass for the moment.

Trouble is, most smart and reasonable people who follow these things knew there was something nasty coming -- and much it was tipped again in highly concrete terms last February at my Money:Tech conference by Nouriel Roubini and Rick Bookstaber. The credit crisis has been building for years, the drumbeats getting louder for a year, and deafening for six months -- and yet most people still had heard nothing.

(For my part, to personalize this, while I saw all the symptoms, and wrote and spoke about them, the severity of the credit crisis also exceeded what I initially thought it would be. Admittedly, I was not alone, but it still pains me immensely to say it. I was forced to play catch-up, when I should have known better.)

What didn't the general population know, and when/why didn't it know it? It's an important question. In a perverse way, the supposed "suddenness" of the crisis reminds me of this classic Hitchhiker's Guide to the Galaxy moment.

"But Mr Dent, the plans have been available in the local planning office for the last nine month."

"Oh yes, well as soon as I heard I went straight round to see them, yesterday afternoon. You hadn't exactly gone out of your way to call attention to them, had you? I mean, like actually telling anybody or anything."

"But the plans were on display ..."

"On display? I eventually had to go down to the cellar to find them."

"That's the display department."

"With a flashlight."

"Ah, well the lights had probably gone."

"So had the stairs."

"But look, you found the notice didn't you?"

"Yes," said Arthur, "yes I did. It was on display in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying 'Beware of the Leopard'."

Here is a sneak peek at some links from my weekly Weekend Reading column over at TheStreet.com:

• A (biased but interesting) comparison of all the Paulson plan iterations (Roy Blunt (R.))
• Black Swans and Market Timing: How Not To Generate Alpha (Journal of Investing)
• The Other Crisis: Food, Fuel Prices Pose Continued Risk (IMF)
• The reckless seizure of Washington Mutual (Bronte Capital)
• Peter Bernstein on not-so-free enterprise (NYTimes.com)
• IMF Says Crisis Marks Tectonic Shift in Financial Markets (IMF)
• US Mint suspends sale of 24-karat gold coins (S.F. Chronicle)
• How the U.S. became a nation of debtors (Report on Business)
• Bailout may be grand-daddy of all carry trades (Bloomberg)
• Approximately a half-million acres of San Diego County at wildfire risk (SOSD)
• JJB Sports stock takes big hit on call that was never made (Times)
• Found memo from the future on the credit market follies (Barron's/Barry)

Nice chart from NYT with the current U.S. banking leader list, post WaMu/JPM:

Full text is here of the Emergency Economic Stabilization Act. It is more than 40 pages long, and full of legalese, but it should be required reading. While I still believe we had no choice but to act, this is a sad, sad day.

If you're not already angry, feel free to get angry. Recognize, however, that while Wall Street was the credit drug dealer/developer, far too many among us were willing buyers of the pharmaceutical called easy money. I wish I felt confident that those days are gone forever, and the U.S. has turned a corner, but I don't. Instead I think we're seeing a pivotal moment in the arc of U.S. history, one where it's still possible to make changes to bring the system in line, but I see no sign anyone is thinking past Monday.

As a friend said to me the other, This is no economy for old men.