Not to be stuck in total denial of reality, if you squint at it there is a way that John McCain's comeback is inevitable and Republicans can fend off total slaughter come November. Assumption #1 congress has to pass a bailout plan. Assumption #2 In order to pass that bailout plan McCain has to play an integral part. Assumption #3 The McCain campaign realizes that their only chance of winning the election is to be seen playing a central role in brokering a successful bailout package. Assumption #4 possibly the white house also realizes that they need to let McCain broker the deal if they are to get a deal. (and, again, there will be a deal cuz there has to be.)
This is the exact sort of big issue, capitol gridlock situation that McCain has used to establish himself as a maverick by bucking Republican orthodoxy to achieve a bipartisan solution that just about nobody is happy with. (But its still better than the status quo!)
Having passed the bailout, the elimination of most worst-case scenarios will cause an immediate improvement in the market and the economy although the ripple effects of whats going on right now will be present through election day.
Not saying this will actually happen, just saying that if it does people will say that it was some amazing turn around but in reality it was inevitable and predictable with the proper model.
The scale of events these days is enough to make a US presidential election seem trivial. As such its a good time to mention some other inevitabilities. It is inevitable that the US will adopt appropriate fiscal and monetary strategies to cope with this economic situation. Its impossible that political leaders who are unwilling to act correctly according to economic theory will not gain power. They (collectively) know the theory. The theory is correct. It is also impossible that self interested actors would not choose to adopt correct strategy if they can, considering the advantage correct strategy would give them over their political opposition. (Correct as in avoiding disaster, although there is a lot of room for sub-optimal strategy.)
This will certainly be a period of increased concentration of industry in the hands of government, and possibly increased protectionism. However, the inevitable result will be the adoption of consumption increasing policies by the governments of the G8 ex-US plus China. These countries will all be forced both by politics (the US twisting arms) and economic circumstances to undergo reform. In the end they are too dependent on the US as an export partner to not give in to US demands and US demands will be increased consumption on their part which will ultimately free them from dependency on the US as an export market.
People who think that China is going to own the US and UK financial system need to realize that our financial problems are merely a precursor to their much more serious problems which will require an international bailout as they don't have the technical sophistication to engineer it for themselves. Therefore, the reverse,(China selling of large chunks of equity at in their banking sector at firesale prices to Western firms) is more likely.
Of course, I am probably wrong about all this, there are so many more ways to be wrong than to be right. The goal is to develop strategies to make a profit when you are right and break even the rest of the time.