After yet another strong day on Wall Street, the Dow is now less than 400 points from 14,000. Today's gains are largely due to the Bush administration plan to freeze interest rates for subprime borrowers - another supposed sign that the credit mess is stabilizing (Countrywide Financial was up big-time on the news, as was KB Home and other homebuilders). Of course, fixing rates at lower levels also means that investors won't be getting the returns they had expected from reset interest rates. Ed Leamer, director of the UCLA Anderson Forecast, told KNX this afternoon that this shouldn't be the time for Washington to get its paws into the mortgage regulation game (where was the administration a few years ago when intervention might have done some good?). The market also rallied on November retail numbers that were interpreted in the best possible light (even though Target had a gloomy forecast), as well as what's expected to be a decent November jobs report (numbers out tomorrow morning). From David Gaffen at Marketbeat:

David Rosenberg, chief North American economist at Merrill Lynch, see the market move “as a major over-reaction to the problem at hand,” as it only addresses subprime, adjustable-rate mortgages originated between January 2005 and mid-2007. This larger entity is again, an attempt to contain what cannot be contained, as other state investments (like Florida) are facing lower-than-expected returns and panicked redemptions, while the subprime debacle is already spreading into auto loans, where defaults are rising, affecting borrowers, lenders, and those that bought the securities. Will this necessitate the production of The Entity III: Season of the Witch?

Here's a rundown on the administration's subprime plan from Bloomberg. Just keep repeating, it is not a bailout, it is not a bailout...