From the Wall Street Journal:
U.S. House of Representatives lawmakers wary of growing signs of the nation’s economic distress voted in favor of a $700 billion Wall Street rescue package on Friday, sending the biggest government intervention in the financial markets since the Great Depression to President George W. Bush for his signature.
The vote was 263 to 171.
Update: the Dow, which had been up over 200 points before the bill’s passage, has retreated to a mere plus 34. Buy on rumor, sell on fact?
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Dow now falling like a rock, immediately after passage.
Why is dow not going up 700 points?
Thanks to all who worked so hard to stop this abomination. Especially you, Yves. You did a great job.
Why is dow not going up 700 points?
Because they have the bailout money. Only an idiot wants to be long the market right now. A lot of the ‘smart money’ actually is pretty smart — or at least not that dumb. This whole orchestrated market blackmail — give us the money or we’ll tank the averages and cause a depression — worked well enough. Mostly because the people in Congress aren’t that smart.
And a lot of those idiots in Congress actually think that the problem is solved because they passed this idiotic bill and are patting themselves on the back over it. Wait a couple of months until things reach crisis proportions again…..
“Wait a couple of months until things reach crisis proportions again…..”
Or a couple of weeks, or a couple of days. Seems we’re approaching some sort of financial disaster singularity.
The Dems were all over this with lots of pats on the back, mentioning bipartisan support but not mentioning hardly a Rep by name. When more money is needed how fast will this become Bush’s bill?
Nancy Pelosi signing the bill …and giggling.
“(S)he, who laughs first, laughs last”
The silver lining from today is:
So far, no politician has run his/her mouth and caused a panic in any business sector (that i know of).
But i can’t say that’s not going to happen tomorrow.
“Or a couple of weeks, or a couple of days. Seems we’re approaching some sort of financial disaster singularity.”
I am going to steal this, and tell everyone I coined it.
Now things get interesting hang on to your hats the ride ha begun
Down 160 after being up 300! I hope all these asshats on TV gong “We have to do something!” are happy now!
House Speaker Nancy Pelosi said about the terrible financial boondoggle for Wall Street,
“It is a vote we must win for the American people.” This proves you can go against the American people and reward the fat cat contributors to congressional campaigns and rationalize it to yourself. Lets talk turkey, Democrats in Congress practiced good politics to get a President Bush backed bill passed, so they remain blameless, which will get them elected in November, especially Sen. Barack Obama. Unfortunately, the Democratic action on the bailout bill will put America at greater risk and make the economic problems problem worse. Regardless what the fate of the nation is now, Wall Street bankers will just sit back on their newfound taxpayer money and laugh at our naïveté.
Democratics were gloating because the Prez just sealed his fate as possibly one of the worst in history….
October 3, 2008
Whoever ran the PR on this Bail Out, nee “Rescue Plan”, should receive a bonus, but then again they were probably working on a 10% commission. Let’s see $700 billion x 10% equals…. In the end it was simple. Just scare the holy beejesus out of the politicos, and make them think they were solely responsible for creating the ruin of civilization as we know it, with a mere 32 days before the elections. Yes no brainer, but slick beyond slick nonetheless.
And…the best thing they did was to conjure up the 750 plus drop in the market on Monday. You know that Monday before the House even voted. You guys and gals know better than me just how easy it was to pull that off with all of the vested-interest-in-the-bail-out-traders just sitting around twiddling their thumbs with no trade lines to play with. Think about it.
Earl L. Crockett
Feeling sold out,
At The Beach
Santa Cruz, CA
Are we approaching a number of singularities where the timing may be more causal than coincidental? Politically, whoever is sworn in Jan 2009 will see that by Nov 2009, there window for action will be closing as Congress gears up for the mid-term 2010 elections which may itself be an incumbant bloodbath thanks to this next likely singular event. The bailout is ill-conceived and dangerously dependent on too many ‘moving parts’ that must align perfectly to achieve even middling results including getting overseas sources to buy treasuries at a good enough price to commence work on the 1st tranche of $250. Thus, the bailout may actually be stillborn, born retarded or fail to get out the gate. Either way, more 2008 layoffs and more bankruptcy news, through 2009, will befuddle Congress and voters who naively thought the bailout was to stop the recession and layoffs.
The national swelling of humiliation and anger from a clearly stillborn or dead-in-the-water bailout will be historic as an already historically unpopular Congress comes out of the Nov 8 elections and in 12 months gears up for campaigning towards 2010 mid-terms. Vengeful taxpayers will not allow passage of anything in the 3-figure billions and an always-timid Obama will not defy them. A Prez McCain could pull a change-up, though financially-speaking, the choice of president is looking increasingly irrelevant, other than the reality they’re almost guaranteed to be a 1-termer thanks to another singularity, a debt-unwind-fueled “L’-shaped-recession that only deepens from 2009-2012.
I believe Paulson stated that it would take 2 or 3 weeks to setup shop before bidding or buying can begin with any bailout money. It takes time to setup a new bureaucracy that will only benefit a few and saddle the remaining with debt.
It would have been better for the people’s spirits to divert the funds into a lottery and dole out a cool million dollars to 700,000 instant millionaires over the course of a year.
We are so f_cked.
Say goodbye to the First Republic of the United States. It took but two weeks to throttle it with a purse string, then drag the unconscious weight to a golden bath tub and drown it in red ink. Salute, and throw a flag over the corpse: to the extent that we were ever a democracy, we are one no longer. Instead, we’re an oligarchic kleptocracy, operating within a framework of corporate fascism. Really, that’s been the case de jure for ten years (yes ten); now it is the case de facto. Sounds melodramatic, yes . . . no. The truth more often comes in on gray cats’ paws than with claws and trumpets. This is the way a failed state ends, not with a bang but a simper.
Eight hundred and fifty in costs to cozzen private parties, and not a cent of revenue dedicated means the Devil holds our note—and that one always collects, with interest. If this is the best our ‘dealership’ can get the public, we deserve to fail. It gives me no pleasure to say that, but I call it like I see it. [Even the word verification thinks this pigout payout is ‘ugola,’ and I couldn’t coin a better neonym if I tried.]
And that idiot Bush was just quoted on CNN saying:
“We have acted boldly to prevent the crisis on Wall Street from becoming a crisis in communities across our country”
I guess his handlers forgot to tell him that a deep recession is on it’s way REGARDLESS.
It makes me sick how this is being sold to the average American bumpkin – “don’t worry, I know it stinks, but we just prevented a nasty recession.”
No you didn’t.
Eh, it’s just the new way of shorting the market. If they won’t let the shorts happen, we get this insane volatility.
Ride it out. Yes, we’re going down for a while no matter what. They can add all the liquidity they want, doesn’t matter a bit when nobody is solvent.
We can’t monetize the shadow market, no matter what we try to do.
So what’s an investor to do? Wait a few days for a run up and sell off stocks and then sit on the cash? Stick it out? Buy? (just kidding on the “Buy”).
YA THINK ITS A BEAR MARKET?
“they” know as well as anyone what the numbers really mean -a downturn in everything.
This was a setup -a win-win. If the Democrats voted NO they would be blamed for a stock market down turn that was coming anyway, and since they voted ‘yes’ they will be blamed for the downturn.
Watch O’Reilly get the ball rolling in that direction:
http://www.huffingtonpost.com/2008/10/03/bill-oreilly-and-barney-f_n_131569.html
This bailout will go down in history as the last act of Congress in a Free America – they will not be coming back into session – stock up on the essentials: beans, rice, gold, ammo.
http://tinyurl.com/4zygyh
Hello Fascism!
$700,000,000,000 and no oversight to hire Bushies for every corner of the globe.
That’s why Larry Kudlow was yelling so loudly over the voice of the ‘the guy from Cato against the bailout,’ (thank you, I didn’t watch it -Kudlow’s been boot licking for a long time) -that’s why O’Reilly was yelling so loudly at Barney Frank, that’s why the sainted Warren Buffett is yelling so loudly with his money. All yelling for a place at the table. The Bush king is dead, Hail to the new king Paulson.
What a spectacle -the country going down in noise -up in flames.
I want to second FailEconomists thanks to Yves. You have been one of a handful of voices that has fought this thing with detailed and articulate discussion.
I could not turn on my computer for 12 hours after the bill passed (denial, bargaining…)
A lot of the electorate has been woken up. The fault lines are moving to Washington.
A small band of intellectuals can have disproportionate influence on policy. So please keep up the good fight.
Since 9/11 we have sent thousands of American troops to fight in Afghanistan. We have for the most part ignored and forgotten about them after our initial patriotic flurry. Instead we went on a borrow and spend binge. America is now worrying about the financial mess it has gotten itself into.
We worry about losing our comfortable way of life. Meanwhile, our troops are stuck in a increasingly hopless situation in Afghanistan. They need our help more than Wall Street does.
rememberafghanistan.net
Afghanistan, as “another example of how America can build a better world”?
Oh jeez, I laughed till the tears ran down my cheeks. Your deadpan delivery of these wacko sentiments just slays me.
The troops will come home from Afghanistan when their checks bounce.
DEATH TO THE DOLLAR!
— Juan Falcone