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jpinpb
Posts:1450
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jpinpb
Posts:1450
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| 09/29/2008 11:20 AM |
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WASHINGTON - The House on Monday defeated a $700 billion emergency rescue package, ignoring urgent pleas from President Bush and bipartisan congressional leaders to quickly bail out the staggering financial industry.
Stocks plummeting on Wall Street even before the 228-205 vote to reject the bill was announced on the House floor.
When the critical vote was tallied, too few members of the House were willing to support the unpopular measure with elections just five weeks away. Ample no votes came from both the Democratic and Republican sides of the aisle.
Bush and a host of leading congressional figures had implored the lawmakers to pass the legislation despite howls of protest from their constituents back home.
Even as the electronic roll call began, Democratic and Republican leaders were uncertain about having enough votes to pass the politically unpopular plan. It's the most sweeping government intervention in markets since the Great Depression.
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jpinpb
Posts:1450
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| 09/29/2008 11:21 AM |
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"unprecedented federal program to buy up rotten assets from cash-starved firms. The goal is to free up choked credit that was threatening to cause broader market turmoil.
"Many of us feel that the national interest requires us to do something which is, in many ways, unpopular," said Rep. Barney Frank, the Financial Services Committee chairman, before the vote. "It is hard to get political credit for avoiding something that has not yet happened."
The bill was the product of marathon bargaining over the weekend among various House and Senate representatives.
President Bush urged the bill's passage, saying in a White House appearance Monday morning that "every member of Congress and every American should keep in mind that a vote for this bill is a vote to prevent economic damage to you and your community."
"With this strong and decisive legislation," he said, "we will help restart the flow of credit so American families can meet their daily needs and American businesses can make purchases, ship goods and meet their payrolls."
As debate opened, Frank, D-Mass., called the measure "a tough vote," but a necessary one to stave off a financial meltdown. It lets the government buy sour assets — mostly mortgage-backed securities — from struggling financial institutions in a bid to clear out clogged avenues of credit for businesses and individuals alike.
At the White House, spokesman Tony Fratto confirmed vigorous efforts to get the bill through.
"We're going to keep working with them right up until the vote," he said.
Fratto also said that Bush, Vice President Dick Cheney, Treasury Secretary Paulson, White House chief of staff Josh Bolten and other top officials were contacting House members in an effort to rally support, and that the president himself had call list of "a couple dozen members."
Fratto said Bush was telling aides some of those he'd talked to were committed to voting for the bill while "others remained skeptical."
With their dire warnings of impending economic doom and their sweeping request for unprecedented sums of money and authority to bail out cash-starved financial firms, Bush and his economic chiefs have focused the attention of the world and the markets on Congress, said Republican Rep. Paul Ryan of Wisconsin. Without the bill, Ryan added, "the worst is yet to come."
"We're in this moment, and if we fail to do the right thing, Heaven help us." he said.
As Democratic and Republican leaders hunted for votes, leaning on lawmakers to take a political hit for the good of the country, Ryan said, "We're all worried about losing our jobs. ... Most of us say, 'I want this thing to pass, but I want you to vote for it — not me.' "
Two leading players also spoke early Monday, lobbying on morning television news shows for approval of a package deeply unpopular with a public angry that taxpayer money will save Wall Street firms from heavy risk-taking. Thousands of angry phone calls, e-mails and letters have poured into Capitol Hill from constituents. Supporters essentially acknowledged that it was a hold-your-nose-and-vote matter.
Foreclosures are key element missing in plan
Massive financial bailout fails in the House
Wall Street plummets ahead of bailout vote
Full text of the Wall Street rescue plan
The winners, and losers in a post-bailout U.S.
Democrats got many concessions in bailout
Midnight in the Capitol: ‘Finally,’ a deal
Breaking down the proposal
Critics on the left and right said Congress was being stampeded into hasty action on a plan that wouldn't make a dent in the nation's economic woes, which have at their root a subprime mortgage meltdown and the bursting of the housing bubble, followed by a wave of foreclosures.
The legislation does not require any federal action to prevent foreclosures, although it mandates that the government try renegotiating the bad mortgages it acquires with the aim of lowering borrowers' monthly payments so they can keep their homes.
"Like the Iraq war and the Patriot Act, this bill is fueled on fear and hinges on haste," said Democratic Rep. Lloyd Doggett, R-Texas. " |
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jpinpb
Posts:1450
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| 09/29/2008 11:22 AM |
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"Republican Jeb Hensarling of Texas, a leading conservative, said the bill puts the country "on the slippery slope to socialism. If you lose your ability to fail, soon you will lose your ability to succeed."
The Senate planned a vote as early as Wednesday.
Sen. Chris Dodd, D-Conn., said that failure to act would spread the contagion of frozen credit markets even further. "This is not just about Wall Street," said the Banking Committee chairman. " |
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jpinpb
Posts:1450
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| 09/29/2008 11:22 AM |
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"Sen. Judd Gregg, R-N.H., told The Associated Press: "It's one of those situations where if it passes and works, people will never know how close we were to the brink."
Still, both men said the necessity of such massive government action is a sad day for the nation. They were speaking not just to rank-and-file lawmakers who are under a spotlight in the contentious, dramatic congressional debate, but to U.S. and global markets which have displayed nervousness about Washington's determination to act.
Investors worldwide and in early trading in the United States continued to show doubt about whether the bill would go through, much less go a long way toward curing the systemic problems that have unnerved financial markets across the globe for weeks. " |
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jpinpb
Posts:1450
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| 09/29/2008 11:23 AM |
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"There was a further sign of general economic deterioration Monday as the Commerce Department reported that consumer spending was unchanged in August — even worse than the small 0.2 percent gain that economists had anticipated. It was the weakest showing since spending was also flat in February.
Federal Reserve Chairman Ben Bernanke said the bill "should help to restore the flow of credit to households and businesses that is essential for economic growth and job creation."
Bush said he "fully understands" the bailout bill was a difficult vote. He and Vice President Dick Cheney took to the phones to corral individual members of Congress.
Lawmakers wrote a number of restrictions into the pending legislation, including oversight over the operation of the program, curbs on "golden parachutes" for top executives of firms getting help, and assurances that taxpayers would ultimately be reimbursed by the companies for any losses. But the government would have broad discretion to decide how to implement the rescue.
The legislation also requires that the government take ownership stakes in companies that receive federal infusions, so it could share a piece of potential future profits.
Foreclosures are key element missing in plan
House votes down massive bailout measure
Dow drops over 700 points on bailout fears
Full text of the Wall Street rescue plan
The winners, and losers in a post-bailout U.S.
Democrats got many concessions in bailout
Midnight in the Capitol: ‘Finally,’ a deal
Breaking down the proposal
Bush said the ultimate cost of the bailout will be much less than the $700 billion authorized.
Treasury Secretary Henry Paulson sought the unprecedented amount of money with little supervision.
Instead, the bill lets Congress block half the money and force the president to jump through some hoops before using it all. The government could get at $250 billion immediately, $100 billion more if the president certified it was necessary, and the last $350 billion with a separate certification — and subject to a congressional resolution of disapproval. Still, the resolution could be vetoed by the president, meaning it would take extra-large congressional majorities to stop it.
At the White House, spokesman Tony Fratto described vigorous efforts to get the bill through. " |
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jpinpb
Posts:1450
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lurknomore
Posts:270
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| 09/29/2008 11:43 AM |
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I think something like that bill will pass in the next day or two. The dems were, quite appropriately, not willing to take the heat among voters for passing the bill without substantial repub support. It is almost certain that if even 10 or so more repubs switched to vote for it, there would have been a "surge" (so to speak) of dem votes to pass it.
If you didn't think we were in an interregnum period this surely shows it. Bush has almost no influence with his own party--governance is fully in the hands of Congress and the two presidential candidates (soon to be the one president-elect). He has become irrelevant. |
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showboat
Posts:67
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| 09/29/2008 11:45 AM |
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| Amazing stuff! The representatives actually represented the people! We should mark this day down in history! |
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jpinpb
Posts:1450
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| 09/29/2008 11:47 AM |
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| My big question was would the 700 billion even be enough of a bailout? I'm thinking not. Maybe they're waiting for all the banks to go under, to then propose the ultimate, once-and-for-all bailout in the trillions. |
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Brian
Posts:2210
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| 09/29/2008 11:59 AM |
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Posted By showboat on 09/29/2008 11:45 AM
Amazing stuff! The representatives actually represented the people! We should mark this day down in history!
Yes, "thank you" to those legislators who didn't buy hype and the pressure from Paulson. We don't need bailout.
Housing prices adjusting to affordable levels are the best thing that can happen. In the future, home buyers won't have to take on toxic loans to afford houses. Housing is a "manufactured good" that shouldn't take up an ever increasing share of workers' incomes.
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artist
Posts:81
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| 09/29/2008 12:01 PM |
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| I have heard that the real price tag will be $5 Trillion. |
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artist
Posts:81
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| 09/29/2008 12:02 PM |
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| They should fire Paulson and hang King George (Bush) for trying to ram this down peoples throats. Yeah for the defeat. |
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jpinpb
Posts:1450
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| 09/29/2008 12:03 PM |
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Doing some major catch-up and reading today. Came across this post on BMIT's blog:
"Anonymous said...
This will 700 Billion will saturate and the forclosures will keep coming as alt and option arm loans are another 1 trillion wave to hit here in the next 4 years. Then the wave of loan Mods that will hit in 5 as all of those will reset and prices will be much lower with higher interest rates. And top that this little strategy may work in good economy but as prices go down unemployment goes up and the 78 million baby boomer's start to go on Social Security it will be a vicious loop that will keep feeding on itself. No thanks to you Paulson as you screwed the American taxpayer and protected all the Wall Street Whores and bailed them out. You sir will go down as the biggest piece of crap to go down in History." |
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jpinpb
Posts:1450
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| 09/29/2008 12:05 PM |
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And I was NOT aware of this. I don't know if others here were/are:
"The bailout is not $700 billion, it is unlimited. According to the language of the bill put out by the NYT
"Sec. 6. Maximum Amount of Authorized Purchases.
The Secretary’s authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time"
You see it will cost more then 700 billion but the Treasury can only hold $700 billion at one time. WHich can explain why this bill's life is 2 years.
"Sec. 9. Termination of Authority.
The authorities under this Act, with the exception of authorities granted in sections 2(b)(5), 5 and 7, shall terminate two years from the date of enactment of this Act. "
Also .. the Tresury can make any insider sweetheart deals to get rid of this debt and there will be no audit or review of this process
"Sec. 8. Review.
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency. "
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ilivehere
Posts:128
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| 09/29/2008 12:19 PM |
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I don't think all the banks are going under. As we have seen in the last few days there seem to be quite a few strong vulture's circling for the kill and buy on the weaker failing banks.
A question to all- I don't have an answer just looking for opinions..
If the bill doesn't pass and the banks are in the dire straits they say their in, would it not make sense to loosen the spigot to qualified buyers and people that want to refinance? Where will the money come from if they don't? They can't continue to sponge off the fed, they have to pay that money back at some point.
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lurknomore
Posts:270
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| 09/29/2008 12:27 PM |
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| I think there will be a solution to this, averting a major credit crisis. I have been willing to act on that belief--I just (within the last 10 minutes) bought about $150,000 more of several ETFs in the belief that within my timeframe (holding for 3-5 years, if necesary) this will prove to have been a good entry point. If there is another "emotional" sell-off of about 5%, I am positioned to buy more. Time will tell!! |
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jpinpb
Posts:1450
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| 09/29/2008 12:28 PM |
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| Don't crack open the champagne yet. I hear rumors of a re-vote on a new bill. We're not out of the woods yet. |
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tpc
Posts:498
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| 09/29/2008 12:28 PM |
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Failure to pass this bailout will mean thousands of viable businesses, big and small, will not be able to borrow short term or long term money. The commercial paper market alone is huge and allows companies like JC Penney (and many, many others) to pay their bills and meet payroll. If JC can't pay bills, then 1,000s of their suppliers won't be able to pay bills and meet payrolls. The smowball effect is going to have some very adverse effects across all segments of this economy. Expect car dealerships, boad dealerships, retail operations, small companies, etc to fail.
The puritans were right. Suffering is good. This will cause suffering. Therefore this will be good.
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jpinpb
Posts:1450
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| 09/29/2008 12:36 PM |
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| Someone has the money somewhere. It didn't evaporate (about 18 million went to WaMu's CEO). Punishing the taxpayers w/this bailout is not the answer. It will further burden us, not help us. |
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