Bailout plan?

[open mind]

think this deserves it's own thread.

i'm not sure if it's the governments place to bailout all these companies in the first place but i've still got a few questions.

is it true that the bill as it's currently written puts all the power to disperse these funds in the hands of one guy?
i want to know the value of what the government is paying for and how how much it's auctually going to pay for it.
what sort of penalties do the companies getting bailed out have to pay? loss of lobbying rights? salary limits for company leadership? anything?

[A Love American]

The end of the world is near.

[oldwirehands]

S27yitK32ds

[oldwirehands]

America more Communist than China?

6gZuG-52js0

[timchoke]

If I wasn't scared enough before, I really think these bailouts might be the start of the end of America as we know it.

[passingtime49]

The plan will definitely use tax payers' money to fund this $700 billion dollar bailout. I haven't heard anything regarding any consequences coming against the companies that are being bought out. In the end, the middle class is really going to suffer if this plan backfires.

[nfgrocker16]

I heard an interesting plan on the radio the other day that would include putting tariff's on items from developing countries like China that would equate to what we would pay for labor here in the states. So lets say you pay an American worker $1 to make some kind of product here in the US. If we buy from China instead for cheaper, lets say 20 cents to our dollar, they then have to pay an 80 cent tariff when shipping it back to the US. Interesting.

[Steve Henderson]

Looks like Huckabee is more of a maverick than McCain will ever be:

Huckabee Comes Out Against Bailout
In a display of grassroots GOP opposition to the proposed Wall St. bailout, Mike Huckabee has sent out a scathing e-mail to his supporter list, opposing the bailout and the leaders who are pushing it: "Frankly, I'm disappointed and disgusted with my own Republican party as I watch them attempt to strong-arm a bailout of some of America's biggest corporations by asking the taxpayers to suck up the staggering results of the hubris, greed, and arrogance of those who sought to make a quick buck by throwing the dice."

[saysmydoctor]

What we think is irrelevant for what the Treasury Secretary does has been unreviewable.

Which is fucking beyond me.

[boykosaurus]

Definitely going to grad school for a few years this point. Screw trying to enter the workforce.

[saysmydoctor]

Same decision I came to. However, because of this I see college loans interest rates doubling.

[loveisdead]

Yeah I am considering going to law school now more than ever but I'm so terrified of loans.

[SoggY ThE OnE]

Next Phase: Invasion of the United States mainland by guerilla warriors...

[oldwirehands]

If you go to Congress' website, you can send a message to your senator and representative opposing the bailouts. I'm trying to find a ride to a protest going on at my representative's office. If I go there, I'm probably going to get arrested. Wish me luck!

[saysmydoctor]

I don't oppose the bailouts so much as the methodology of writing the Treasury a blank check.

[oldwirehands]

I don't oppose the bailouts so much as the methodology of writing the Treasury a blank check.

So giving away $700 billion to a failing business is totally cool? Might I add, $700 billion that we American citizens have to pay.

[AmarnaReign]

http://www.cnn.com/2008/POLITICS/09/24/beck.bailout/index.html

[saysmydoctor]

So giving away $700 billion to a failing business is totally cool? Might I add, $700 billion that we American citizens have to pay.
The alternative being we allow these companies to fail and allow the economy to fail with them sounds counterproductive. At least by boosting these companies up, we allow time to put back in place proper regulation where these companies can't go apeshit with their loaning and then collapse. I don't fully understand the economics of the situation but it's even more painfully obvious you don't either.

[GiggsOho]

WASHINGTON (AP) - JPMorgan Chase & Co. is acquiring Washington Mutual Bank, the nation's largest thrift, for $1.9 billion

[oldwirehands]

The alternative being we allow these companies to fail and allow the economy to fail with them sounds counterproductive. At least by boosting these companies up, we allow time to put back in place proper regulation where these companies can't go apeshit with their loaning and then collapse. I don't fully understand the economics of the situation but it's even more painfully obvious you don't either.

I understand the situation entirely and don't need it to be repeated. I believe we should let these businesses fail. These bailout outs are only going to postpone an inevitable economic disaster.

[Jason Tate]

I understand the situation entirely and don't need it to be repeated. I believe we should let these businesses fail. These bailout outs are only going to postpone an inevitable economic disaster.
Do you have any idea what would happen if these businesses fail? Do you honestly have ANY idea? Do you want your paychecks to bounce?

[Jason Tate]

So giving away $700 billion to a failing business is totally cool? Might I add, $700 billion that we American citizens have to pay.
That's not what happens -- we're not giving it away, nor is that the current number - provisions are for around half of that. If it works, we could make a profit on this.

[Jason Tate]

Anyway -- here's my thoughts on a solution:

http://hussmanfunds.com/wmc/wmc080922.htm

[oldwirehands]

Do you have any idea what would happen if these businesses fail? Do you honestly have ANY idea?

As much of a disappointing answer you think this is, I have to say yes. I have a general idea. Sorry that I don't agree with you.

That's not what happens -- we're not giving it away, nor is that the current number - provisions are for around half of that. If it works, we could make a profit on this.

Please explain further.

[Jason Tate]

As much of a disappointing answer you think this is, I have to say yes. I have a general idea. Sorry that I don't agree with you.



Please explain further.
And you're ok with those consequences? As someone with a bank account, and mutual funds, and at such a young age I'd like to continue having those things ... I can't agree with you.

Have you not read the proposal, especially some of the recent drafts? Shrinking it to the bare minimum: it's a buy low, sell high principal. It's not a "here's 700 billion, take it forever" proposal.

[oldwirehands]

And you're ok with those consequences? As someone with a bank account, and mutual funds, and at such a young age I'd like to continue having those things ... I can't agree with you.

Have you not read the proposal, especially some of the recent drafts? Shrinking it to the bare minimum: it's a buy low, sell high principal. It's not a "here's 700 billion, take it forever" proposal.

Well, I am okay with these consequences as I do not have a bank account or mutual fund. I keep the money I make in a box on my shelf. I've been doing it for the past year.

Which proposal are we talking about? To be more specific, I'd like links with it. Not that I don't believe you, I just prefer reading from the originator.

[saysmydoctor]

Let the businesses fail. Brilliant.

[Jason Tate]

Well, I am okay with these consequences as I do not have a bank account or mutual fund. I keep the money I make in a box on my shelf. I've been doing it for the past year.

Which proposal are we talking about? To be more specific, I'd like links with it. Not that I don't believe you, I just prefer reading from the originator.
Well, your money in that box won't be worth a whole lot if this happens. I don't think you realize what would happen to this country if that happened. The panic would be beyond anything we have seen in our lifetime. I promise that.

I believe it's this:

http://calculatedrisk.blogspot.com/2008/09/bailout-proposal.html

CNNMoney.com describes (http://money.cnn.com/2008/09/23/news/economy/bailout_hearing/index.htm?cnn=yes) the planned $700 billion bailout as follows:
The plan would allow the Treasury to buy up troubled assets from U.S.-based companies and foreign firms with big U.S. operations. The aim is for the government to buy the securities at a discount, hold onto them, and then sell them for a profit.


I'm not saying the current bailout is a good idea at all -- it's not. I'm saying that something needs to happen ... quickly.

I think Krugman's response is worth reading:

http://krugman.blogs.nytimes.com/2008/09/24/a-700-billion-slap-in-the-face/

[Jason Tate]

Let the businesses fail. Brilliant.
I honestly don't think anyone has followed that through to its logical conclusion.

[saysmydoctor]

I mean, really, it's a choice between bailing out the companies and the worst economic disaster ever? Both suck, but one clearly allows time to unfuck the situation. I'm not going to lie, NOW is when I want Newt Gingrich in Congress. At least he balanced the budget.

[oldwirehands]

Well, your money in that box won't be worth a whole lot of this happens. I don't think you realize what would happen to this country if that happened. The panic would be beyond anything we have seen in our lifetime. I promise that.

I believe it's this:

http://calculatedrisk.blogspot.com/2008/09/bailout-proposal.html

I think Krugman's response is worth reading:

http://krugman.blogs.nytimes.com/2008/09/24/a-700-billion-slap-in-the-face/

I completely understand that and am not bothered by it. If anything, I think it may be needed to get a select amount of people thinking. But again that is just me and completely respect your opposition. I'm pretty tired and wouldn't be able to hold any of the this information right now. But I will read both of those blogs and get back to you later on. Thank you for posting them for me.

[Jason Tate]

I completely understand that and am not bothered by it. If anything, I think it may be needed to get a select amount of people thinking. But again that is just me and completely respect your opposition. I'm pretty tired and wouldn't be able to hold any of the this information right now. But I will read both of those blogs and get back to you later on. Thank you for posting them for me.
I'm not really ready for chaos and anarchy quite yet.

[Jason Tate]

I mean, really, it's a choice between bailing out the companies and the worst economic disaster ever? Both suck, but one clearly allows time to unfuck the situation. I'm not going to lie, NOW is when I want Newt Gingrich in Congress. At least he balanced the budget.
I haven't liked what I read so far on his proposals.

I think there are clear alternatives to the proposed "bailout" - that can avoid market insanity - and I firmly believe Obama supporting the bailout will lead to his losing the election in November. However, I still see no reason why we can't have the debate tomorrow night.

[saysmydoctor]

I completely understand that and am not bothered by it. If anything, I think it may be needed to get a select amount of people thinking. But again that is just me and completely respect your opposition. I'm pretty tired and wouldn't be able to hold any of the this information right now. But I will read both of those blogs and get back to you later on. Thank you for posting them for me.
What?

[asmolitor]

you know, i really wonder what kind of deal jamie dimon made with the devil. or in this case, the devil being the OTS/FDIC. i mean, JP Morgan just got handed WaMu for pennies on the dollar for no concrete reason, other than media speculation of a bank run due to hearsay on liquidity and deposits.

if any part of the "bailout" as i understood it would've been agreed upon in the short term, WaMu would've been fine, as their speculative debts would've essentially been erased, leaving them with a profitable consumer banking unit at over 2,000 branches. instead, JP Morgan gets the whole consumer banking unit, control of all individual deposits, and barely has to touch WaMu's debt - leaving WaMu with all their debt in the short term, and without their consumer deposits.

i've been thinking all night about the legality of something like this, and i literally can't find justification for it. i'm perplexed as to how the government can assume control of a private entity, and deal it off to another private entity at a discounted rate - and what precedent allows them to do so. part of me thinks it's a powerplay by the administration to push the "bailout plan" through quicker, using the bank-run panic fear as motivation. the other part of me, barring any grand timberwolf-esque schemes, thinks this is government-sponsored anti-trust and collusion. they might as well just give jamie dimon a treasury press in his basement for handing him money at essentially no risk. and yet, another part of me thinks this is pure politics, in trying to hand mccain the election. or all 3 - honestly, i can barely make sense of this anymore.

if the dow doesn't travel down past 10,000 in the next few trading days, i'll be surprised - bailout or no bailout. then when the short-selling restriction on financials is lifted on october 2nd (i think)... i wouldn't watch CNBC for a while - things will most likely get incredibly ugly.

[Jason Tate]

you know, i really wonder what kind of deal jamie dimon made with the devil. or in this case, the devil being the OTS/FDIC. i mean, JP Morgan just got handed WaMu for pennies on the dollar for no concrete reason, other than media speculation of a bank run due to hearsay on liquidity and deposits.

if any part of the "bailout" as i understood it would've been agreed upon in the short term, WaMu would've been fine, as their speculative debts would've essentially been erased, leaving them with a profitable consumer banking unit at over 2,000 branches. instead, JP Morgan gets the whole consumer banking unit, control of all individual deposits, and barely has to touch WaMu's debt - leaving WaMu with all their debt in the short term, and without their consumer deposits.

i've been thinking all night about the legality of something like this, and i literally can't find justification for it. i'm perplexed as to how the government can assume control of a private entity, and deal it off to another private entity at a discounted rate - and what precedent allows them to do so. part of me thinks it's a powerplay by the administration to push the "bailout plan" through quicker, using the bank-run panic fear as motivation. the other part of me, barring any grand timberwolf-esque schemes, thinks this is government-sponsored anti-trust and collusion. they might as well just give jamie dimon a treasury press in his basement for handing him money at essentially no risk. and yet, another part of me thinks this is pure politics, in trying to hand mccain the election. or all 3 - honestly, i can barely make sense of this anymore.

if the dow doesn't travel down past 10,000 in the next few trading days, i'll be surprised - bailout or no bailout. then when the short-selling restriction on financials is lifted on october 2nd (i think)... i wouldn't watch CNBC for a while - things will most likely get incredibly ugly.
I fail to see the "no concrete reason"? I thought it was pretty clear why they, JP Morgan, bought them up ... as for a "bank run" - seeing as there's a WaMu across the street from me ... I can assure you, that's not a joke or fear - it's happening.

WaMu was under severe liquidity pressure.

[saysmydoctor]

Yes, asmolitor, please make sense of this for me. My economics knowledge is rudimentary and to be frank, reading articles concerning it is drier than the Sahara.

[asmolitor]

I fail to see the "no concrete reason"? I thought it was pretty clear why they, JP Morgan, bought them up ... as for a "bank run" - seeing as there's a WaMu across the street from me ... I can assure you, that's not a joke or fear - it's happening.

WaMu was under severe liquidity pressure.

http://eastbay.bizjournals.com/eastbay/stories/2008/09/22/daily77.html?ana=yfcpc

i know, i've heard the "insufficient liquidity" rhetoric for the last two weeks. but, perhaps my contrarian/cynical views are at the forefront, but when a company has $190 billion in deposits and $300 billion in assets... i'm not entirely sold on losing roughly 8% of deposits in the last week or two, and only writing down $6.1 billion in losses in all of 2008 being a fire-sale type of dire situation. the last paragraph of this article seems to me like they would've had a lot more capital to last longer than a week and a half: http://www.forbes.com/2008/09/16/washington-mutual-closer-markets-equity-cx_lal_0916markets42.html?partner=y ahootix

of course, i'll concede that my argument is about 8 hours old. if the "bailout" package had been approved as it was, it looked like WaMu's mortgage debts would essentially be zeroed out, leaving them with a fairly profitable consumer banking division (albeit, still with large federal loans to be paid). i'm simply stunned that the OTS would pull the plug on WaMu before the bailout could materialize, given that the whole premise of the bailout would've aided WaMu significantly.

and if i'm to believe the latest rumors out of washington, that mccain's campaign politics killed whatever stage of agreement was reached on the bailout, i'm inclined to dislike him even more.

[asmolitor]

Yes, asmolitor, please make sense of this for me. My economics knowledge is rudimentary and to be frank, reading articles concerning it is drier than the Sahara.

honestly, i wish i could - but i really just don't know anymore. there hasn't been a lot of detail on WaMu's takeover, or about how the bailout plan would've explicitly aided WaMu - but it sure seemed like WaMu just had to weather the storm for another week or so. but my timberwolf-senses tell me that there's something going on behind the scenes that not a single textbook could explain. i'm absolutely dumbfounded, given that WaMu released their quarterly numbers early last week, and the balance sheet seemed to be, well, do-able. not spectacular, not sustainable, but do-able in the short term.

for the OTS to seize the bank, hand it to the FDIC, then have them hand it off to jamie dimon and JP Morgan just doesn't make a whole lot of sense to me. the key word is "liquidity" - it's the rationale behind the OTS's decision, but i just don't see it numbers-wise. especially with a bailout plan that before like 5 hours ago, would've cleaned up WaMu's books quite nicely. i don't see why there was a rush to call WaMu a failure today, rather than give it another day, week, month, etc.

[saysmydoctor]

I'm talking about the crash overall. What the hell caused this?

[asmolitor]

I'm talking about the crash overall. What the hell caused this?

well, this is the popular article being sent around:

http://freakonomics.blogs.nytimes.com/2008/09/18/diamond-and-kashyap-on-the-recent-financial-upheavals/

they can, and are much more qualified to, explain it better than i can.

[Jason Tate]

http://eastbay.bizjournals.com/eastbay/stories/2008/09/22/daily77.html?ana=yfcpc

i know, i've heard the "insufficient liquidity" rhetoric for the last two weeks. but, perhaps my contrarian/cynical views are at the forefront, but when a company has $190 billion in deposits and $300 billion in assets... i'm not entirely sold on losing roughly 8% of deposits in the last week or two, and only writing down $6.1 billion in losses in all of 2008 being a fire-sale type of dire situation. the last paragraph of this article seems to me like they would've had a lot more capital to last longer than a week and a half: http://www.forbes.com/2008/09/16/washington-mutual-closer-markets-equity-cx_lal_0916markets42.html?partner=y ahootix

of course, i'll concede that my argument is about 8 hours old. if the "bailout" package had been approved as it was, it looked like WaMu's mortgage debts would essentially be zeroed out, leaving them with a fairly profitable consumer banking division (albeit, still with large federal loans to be paid). i'm simply stunned that the OTS would pull the plug on WaMu before the bailout could materialize, given that the whole premise of the bailout would've aided WaMu significantly.

and if i'm to believe the latest rumors out of washington, that mccain's campaign politics killed whatever stage of agreement was reached on the bailout, i'm inclined to dislike him even more.
I don't think the bailout is going to happen. I think that may be the reason for this -- they realized they can't wait -- the entire bailout situation is fucked up, now has presidential politics involved, and I don't think it's going through with McCain and the House Republicans fighting so hard against it. It just doesn't seem like a good idea with the massive populist resentment of the plan. The voters don't want it - at all.

[Jason Tate]

As opposed to trashing the value of the dollar? At which point people will stop trading in dollars and use Euros or Yen and European/Far eastern/Middle Eastern corporations will effectively buy up huge chunks of America at a fraction of the cost for themselves.

Plus the you've got masses of inflation which destroys the middle classes.

It's doom and gloom on both sides mate.
Pretty sure that's already happening.

[asmolitor]

I don't think the bailout is going to happen. I think that may be the reason for this -- they realized they can't wait -- the entire bailout situation is fucked up, now has presidential politics involved, and I don't think it's going through with McCain and the House Republicans fighting so hard against it.

with a bailout plan in place, as i thought it was earlier tonite, WaMu looked pretty good, or as good as a company in that state could've. then out of nowhere, the OTS seized WaMu (and timewise, i believe the seizure came before the deal-breaking?) so i was perplexed as to why the OTS jumped the gun on WaMu. but even in the wake of that, i hardly believe that given WaMu's statements just last week on liquidity issues, that they would've had to exhaust all "$50" billion of capital they said they had.

essentially, i don't know who or what to believe about this situation anymore. the only conclusion i can solidly draw is that jamie dimon is literally laughing all the way to the bank.

i've been at work most of the night - is there any good sources about mccain's involvement in the bailout negotiations - i.e. how there was some sort of agreement, then he showed up... and there wasn't an agreement?

[Jason Tate]

with a bailout plan in place, as i thought it was earlier tonite, WaMu looked pretty good, or as good as a company in that state could've. then out of nowhere, the OTS seized WaMu (and timewise, i believe the seizure came before the deal-breaking?) so i was perplexed as to why the OTS jumped the gun on WaMu. but even in the wake of that, i hardly believe that given WaMu's statements just last week on liquidity issues, that they would've had to exhaust all "$50" billion of capital they said they had.

essentially, i don't know who or what to believe about this situation anymore. the only conclusion i can solidly draw is that jamie dimon is literally laughing all the way to the bank.

i've been at work most of the night - is there any good sources about mccain's involvement in the bailout negotiations - i.e. how there was some sort of agreement, then he showed up... and there wasn't an agreement?
Mostly just talk ..

"If House Republicans continue to reject the President's approach, there will be no bill," said Rep. Barney Frank, D-Mass., the chairman of the House Financial Services Committee.

"What happened here, basically, if you want an honest appraisal of the thing, we have been spending a lot of time and I am tired. I have spent almost seven straight days at this in trying to come out with a workout plan for our economy a rescue plan," said Dodd. "What this looked like to me was a rescue plan for John McCain for two hours and took us away from the work we are trying to do today. Serious people trying to do serious work to come up with an answer."

Towards the end, McCain finally spoke up, mentioning a counter-proposal that had been offered by some conservative House Republicans, which would suspend the capital gains tax for two years and provide tax incentives to encourage firms that buy up bad debt. McCain did not discuss specifics of the plan, though, and was non-committal about supporting it.

Paulson, however, argued directly against the conservative proposal. "He said that he did not think it would work," according to the source. At another point in the meeting, President Bush chimed in, "If money isn't loosened, this sucker could go down" -- and by sucker he meant economy.

"We were told it came out of the Republican House. We were told at this one point that this was maybe John McCain was floating the idea that Hank Paulson was considering it," Dodd said of the proposal, which he did not elaborate upon. "And of course Barney Frank and I, along with Republicans from the House and the Senate, had spent three hours this morning working on a different core. We were told for the last seven days it was the core issue to give the Secretary authority to move with the crisis, but simultaneously protect the taxpayers and accountability and deal with foreclosure issues all of the things the president mentioned last evening were going to be important as well."

J0663DHLr58

[Jason Tate]

Interesting proposal:

http://www.washingtonpost.com/wp-dyn/content/article/2008/09/24/AR2008092403033.html

[asmolitor]

Towards the end, McCain finally spoke up, mentioning a counter-proposal that had been offered by some conservative House Republicans, which would suspend the capital gains tax for two years and provide tax incentives to encourage firms that buy up bad debt. McCain did not discuss specifics of the plan, though, and was non-committal about supporting it.

suspend capital gains? seriously? combine that with his tax policy if he were to win, and the spending incurred by his support... i could see a deficit coming close to a trillion a year. and hell, why provide tax incentives to those firms when you can just hand them other companies! not surprised about the non-specifics, because, well, what specifics can come from a man who would most likely admit to not understanding his own proposal?

gosh, i picked the wrong night to work. the economy is drastically different from when i was happily watching the office and sunny in philadelphia.

[Jason Tate]

To the Speaker of the House of Representatives and the President pro tempore of the Senate:

As economists, we want to express to Congress our great concern for the plan proposed by Treasury Secretary Paulson to deal with the financial crisis. We are well aware of the difficulty of the current financial situation and we agree with the need for bold action to ensure that the financial system continues to function. We see three fatal pitfalls in the currently proposed plan:

1) Its fairness. The plan is a subsidy to investors at taxpayers’ expense. Investors who took risks to earn profits must also bear the losses. Not every business failure carries systemic risk. The government can ensure a well-functioning financial industry, able to make new loans to creditworthy borrowers, without bailing out particular investors and institutions whose choices proved unwise.

2) Its ambiguity. Neither the mission of the new agency nor its oversight are clear. If taxpayers are to buy illiquid and opaque assets from troubled sellers, the terms, occasions, and methods of such purchases must be crystal clear ahead of time and carefully monitored afterwards.

3) Its long-term effects. If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, America's dynamic and innovative private capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted.

For these reasons we ask Congress not to rush, to hold appropriate hearings, and to carefully consider the right course of action, and to wisely determine the future of the financial industry and the U.S. economy for years to come.


Signed (updated at 9/25/2008 8:30AM CT)
Acemoglu Daron (Massachussets Institute of Technology)
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Kortum Samuel (University of Chicago)
Krueger Dirk (University of Pennsylvania)
Ledesma Patricia (Northwestern University)
Lee Lung-fei (Ohio State University)
Leeper Eric M. (Indiana University)
Leuz Christian (University of Chicago)
Levine David I.(UC Berkeley)
Levine David K.(Washington University)
Levy David M. (George Mason University)
Linnainmaa Juhani (University of Chicago)
Lott John R. Jr. (University of Maryland)
Lucas Robert (University of Chicago - Nobel Laureate)
Luttmer Erzo G.J. (University of Minnesota)
Manski Charles F. (Northwestern University)
Martin Ian (Stanford University)
Mayer Christopher (Columbia University)
Mazzeo Michael (Northwestern University)
McDonald Robert (Northwestern University)
Meadow Scott F. (University of Chicago)
Mehra Rajnish (UC Santa Barbara)
Mian Atif (University of Chicago)
Middlebrook Art (University of Chicago)
Miguel Edward (UC Berkeley)
Miravete Eugenio J. (University of Texas at Austin)
Miron Jeffrey (Harvard University)
Moretti Enrico (UC Berkeley)
Moriguchi Chiaki (Northwestern University)
Moro Andrea (Vanderbilt University)
Morse Adair (University of Chicago)
Mortensen Dale T. (Northwestern University)
Mortimer Julie Holland (Harvard University)
Muralidharan Karthik (UC San Diego)
Nanda Dhananjay (University of Miami)
Nevo Aviv (Northwestern University)
Ohanian Lee (UCLA)
Pagliari Joseph (University of Chicago)
Papanikolaou Dimitris (Northwestern University)
Parker Jonathan (Northwestern University)
Paul Evans (Ohio State University)
Pejovich Svetozar (Steve) (Texas A&M University)
Peltzman Sam (University of Chicago)
Perri Fabrizio (University of Minnesota)
Phelan Christopher (University of Minnesota)
Piazzesi Monika (Stanford University)
Piskorski Tomasz (Columbia University)
Rampini Adriano (Duke University)
Reagan Patricia (Ohio State University)
Reich Michael (UC Berkeley)
Reuben Ernesto (Northwestern University)
Roberts Michael (University of Pennsylvania)
Robinson David (Duke University)
Rogers Michele (Northwestern University)
Rotella Elyce (Indiana University)
Ruud Paul (Vassar College)
Safford Sean (University of Chicago)
Sandbu Martin E. (University of Pennsylvania)
Sapienza Paola (Northwestern University)
Savor Pavel (University of Pennsylvania)
Scharfstein David (Harvard University)
Seim Katja (University of Pennsylvania)
Seru Amit (University of Chicago)
Shang-Jin Wei (Columbia University)
Shimer Robert (University of Chicago)
Shore Stephen H. (Johns Hopkins University)
Siegel Ron (Northwestern University)
Smith David C. (University of Virginia)
Smith Vernon L.(Chapman University- Nobel Laureate)
Sorensen Morten (Columbia University)
Spiegel Matthew (Yale University)
Stevenson Betsey (University of Pennsylvania)
Stokey Nancy (University of Chicago)
Strahan Philip (Boston College)
Strebulaev Ilya (Stanford University)
Sufi Amir (University of Chicago)
Tabarrok Alex (George Mason University)
Taylor Alan M. (UC Davis)
Thompson Tim (Northwestern University)
Tschoegl Adrian E. (University of Pennsylvania)
Uhlig Harald (University of Chicago)
Ulrich, Maxim (Columbia University)
Van Buskirk Andrew (University of Chicago)
Veronesi Pietro (University of Chicago)
Vissing-Jorgensen Annette (Northwestern University)
Wacziarg Romain (UCLA)
Weill Pierre-Olivier (UCLA)
Williamson Samuel H. (Miami University)
Witte Mark (Northwestern University)
Wolfers Justin (University of Pennsylvania)
Woutersen Tiemen (Johns Hopkins University)
Zingales Luigi (University of Chicago)
Zitzewitz Eric (Dartmouth College)

[Jason Tate]

suspend capital gains? seriously? combine that with his tax policy if he were to win, and the spending incurred by his support... i could see a deficit coming close to a trillion a year. and hell, why provide tax incentives to those firms when you can just hand them other companies! not surprised about the non-specifics, because, well, what specifics can come from a man who would most likely admit to not understanding his own proposal?

gosh, i picked the wrong night to work. the economy is drastically different from when i was happily watching the office and sunny in philadelphia.
I was trying to wrap my head around it as well. I didn't understand the capital gains thing at all -- of course, if that applies retroactively to my taxes this year, I wouldn't complain out of pure selfishness. Haha.

Tonight has been insane. I can't stop reading about everything ... I've been playing with numbers, ideas, and different solutions from all different sides all night. It all looks like a giant cluster fuck to me at the moment. Every way I look at it - the market's going to take a hit. Something that's going to take 10+ years to get us out of ... and I still don't think either Obama or McCain should be getting involved in this right now. It's like 3 "Presidents" are masquerading around Washington.

[Jason Tate]

Yes it is and by bailout out these companies it will make that even worse.

I don't know which course of action is best.
Me either. I'm not liking where the Paulson plan is going without massive restructuring though. I just also have this sinking feeling that time is not on our side.

Or maybe it is and the market will correct itself while the government sits with its thumb up its ass.

[Jason Tate]

One thing I do know ... Warren Buffet believes in the need for a restructured bail out plan (and fast) ... and I tend to side with possibly the smartest man in the world when it comes to financial markets.

"Last week will look like Nirvana if they (US Congress) don't do something. I think they will. I understand they're very mad about what's happened in the past, but this isn't the time to vent your spleen about that,” the Independent quoted Mr Buffett as saying in an interview to CNBC. Terming the financial crisis as “economic Pearl Harbour”, Buffett further predicted that the taxpayer would make a profit on its investments in toxic mortgage debt. “If I had USD 700 billion on the government's terms to buy distressed assets, I would,” he said, and added, “Unfortunately, I'm tapped out.”

[asmolitor]

I was trying to wrap my head around it as well. I didn't understand the capital gains thing at all -- of course, if that applies retroactively to my taxes this year, I wouldn't complain out of pure selfishness. Haha.

Tonight has been insane. I can't stop reading about everything ... I've been playing with numbers, ideas, and different solutions from all different sides all night. It all looks like a giant cluster fuck to me at the moment. Every way I look at it - the market's going to take a hit. Something that's going to take 10+ years to get us out of ... and I still don't think either Obama or McCain should be getting involved in this right now. It's like 3 "Presidents" are masquerading around Washington.

i've been trying to find a solid number on how much tax revenue would be lost by suspending capital gains taxes for 2 years - and i'm coming up with somewhere in the vicinity of $250-300 billion over 2 years.

and i can't wait to read yahoo finance / cbs marketwatch when i wake up tomorrow morning. marketwatch says the dow futures are only down about 135 points at the moment, but that's assuming that most of "main street" wasn't paying attention to the developments tonite. and to be honest, i think it's entirely presumptuous that obama/mccain are even included in the talks as anything more than 2 out of 100 senators. how mccain could even offer a plan, without a formal vote on the previous agreement, is beyond me. but then again, apparently that "agreement" wasn't too strong afterall.

[oldwirehands]

Well, your money in that box won't be worth a whole lot if this happens. I don't think you realize what would happen to this country if that happened. The panic would be beyond anything we have seen in our lifetime. I promise that.

I believe it's this:

http://calculatedrisk.blogspot.com/2008/09/bailout-proposal.html

CNNMoney.com describes (http://money.cnn.com/2008/09/23/news/economy/bailout_hearing/index.htm?cnn=yes) the planned $700 billion bailout as follows:
The plan would allow the Treasury to buy up troubled assets from U.S.-based companies and foreign firms with big U.S. operations. The aim is for the government to buy the securities at a discount, hold onto them, and then sell them for a profit.


I'm not saying the current bailout is a good idea at all -- it's not. I'm saying that something needs to happen ... quickly.

I think Krugman's response is worth reading:

http://krugman.blogs.nytimes.com/2008/09/24/a-700-billion-slap-in-the-face/

So wait... are you for or against Paulson's plan? I understand immediate action is neccessary to possibly save the economy but giving the secretary what it wants without any review is not the answer.


What?

I know, I'm a cynical son of a bitch.

[saysmydoctor]

I'm totally against Paulson's concept of his actions being done without review, but to say we should allow these banks to fail is probably the most absurd thing ever.

[Jason Tate]

So wait... are you for or against Paulson's plan? I understand immediate action is neccessary to possibly save the economy but giving the secretary what it wants without any review is not the answer.




I know, I'm a cynical son of a bitch.

Review provisions have been put in place. As have provisions for oversight and to protect the tax payers.

[oldwirehands]

I'm totally against Paulson's concept of his actions being done without review, but to say we should allow these banks to fail is probably the most absurd thing ever.

For the record, I'd like to retract my statements before. I have realized it was an opinion based on my cynical emotions. I believe a fair bailout plan is possible. But I'm having my doubts it would be a permanent solution.

Review provisions have been put in place. As have provisions for oversight and to protect the tax payers.

I'll check it out. Did you read through Kucinich's plan yet?

[Jason Tate]

Wj_JNwNbETA

[open mind]

Wj_JNwNbETA

thanks for posting this.

only about 20 minutes in and i'm wondering how these companies didn't see this coming sooner or later.....all bubbles burst.....especially bubbles that you artificially inflate.

i'm also wondering if this is how all these big banks and investment firms operate, and if so WHAT THE FUCK!?! operating in this fashion is obviously high risk.

if anything this breakdown is making me anti-bailout so far.

[open mind]

one thing (well one of the things) that i don't understand is that people seem to agree that if this is going to be an effective bailout (and not just a treat to cheer up the high level employees of companies soon to be out of buisness) the government is going to have to pay a much higher price then market value, and that the housing market is far from bottoming.......and somehow the american people are going to profit from this? i can see that happening a decade or 2 from now when inflation has made those "profits" totally meaningless but nowhere in the near future.

[Nametekken]

one thing (well one of the things) that i don't understand is that people seem to agree that if this is going to be an effective bailout (and not just a treat to cheer up the high level employees of companies soon to be out of buisness) the government is going to have to pay a much higher price then market value, and that the housing market is far from bottoming.......and somehow the american people are going to profit from this? i can see that happening a decade or 2 from now when inflation has made those "profits" totally meaningless but nowhere in the near future.


i dont see how this can be effective either. I am no economist but it just seems like this would be like patching an 80 year old boat.

[the sky below]

anybody receive this in an email?

Subject: The Birk Economic Recovery Plan

I'm against the $85,000,000,000.00 bailout of AIG.

Instead, I'm in favor of giving $85,000,000,000 to America in a We Deserve It Dividend.

To make the math simple, let's assume there are 200,000,000 bonafide U.S. Citizens 18+.

Our population is about 301,000,000 +/- counting every man, woman and child. So 200,000,000 might be a fair stab at adults 18 and up..

So divide 200 million adults 18+ into $85 billon that equals $425,000.00.

My plan is to give $425,000 to every person 18+ as a We Deserve It Dividend.

Of course, it would NOT be tax free. So let's assume a tax rate of 30%.

Every individual 18+ has to pay $127,500.00 in taxes. That sends $25,500,000,000 right back to Uncle Sam.

But it means that every adult 18+ has $297,500.00 in their pocket. A husband and wife has $595,000.00.

What would you do with $297,500.00 to $595,000.00 in your family?

Pay off your mortgage ? housing crisis solved.
Repay college loans ? what a great boost to new grads
Put away money for college ? it'll be there
Save in a bank ? create money to loan to entrepreneurs.
Buy a new car ? create jobs
Invest in the market ? capital drives growth
Pay for your parent's medical insurance ? health care improves
Enable Deadbeat Dads to come clean ? or else

Remember this is for every adult U S Citizen 18+ including the folks who lost their jobs at Lehman Brothers and every other company that is cutting back. And of course, for those serving in our Armed Forces.

If we're going to re-distribute wealth let's really do it...instead of trickling out a puny $1000.00 ( "vote buy" ) economic incentive that is being proposed by one of our candidates for President.

If we're going to do an $85 billion bailout, let's bail out every adult U S Citizen 18+!

As for AIG ? liquidate it. Sell off its parts. Let American General go back to being American General.
Sell off the real estate. Let the private sector bargain hunters cut it up and clean it up.

Here's my rationale. We deserve it and AIG doesn't.

Sure it's a crazy idea that can "never work."

But can you imagine the Coast-To-Coast Block Party!

How do you spell Economic Boom?

I trust my fellow adult Americans to know how to use the $85 Billion We Deserve It Dividend more than I do the geniuses at AIG or in Washington DC.

And remember, The Birk plan only really costs $59.5 Billion because $25.5 Billion is returned
instantly in taxes to Uncle Sam.

Ahhh...I feel so much better getting that off my chest.
Kindest personal regards,
Birk
T. J. Birkenmeier, A Creative Guy & Citizen of the Republic
PS: Feel free to pass this along to your pals as it's either good for a laughor a tear or a very sobering thought on how to best use $85 Billion!

i think it's an interesting concept - would it work?

[oldwirehands]

That sounds cool.

[Jason Tate]

The math is wrong. It would be 425 dollars.

$85 billion divided by 200 million is $425 per person, not $425k.

[Until The Bombs]

Haha. U.S. math education fail.

[the sky below]

The math is wrong. It would be 425 dollars.

$85 billion divided by 200 million is $425 per person, not $425k.

damn, should have double-checked the math on that.

the concept is still interesting though.

[Jason Tate]

damn, should have double-checked the math on that.

the concept is still interesting though.
As an example of pretty pure socialism ... maybe. Hahah.

[the sky below]

As an example of pretty pure socialism ... maybe. Hahah.

haha my province teeters upon that line.

[Jason Tate]

haha my province teeters upon that line.
Hahaha, many of us do ... even if people don't know it. Hahah.

[the sky below]

Hahaha, many of us do ... even if people don't know it. Hahah.

haha so Canada isn't all that different from the US?

[circasuicide]

a friend of mine said that savage said something interesting on his radio show the other day. the jist of it was help out some, more necessary companies, but let others fall. but the most interesting part of what he said was that we are going to use something like 85 billion dollars to bail out aig alone. take that 85 billion, divide it up accordingly to all american citizens(not green card holders or illegals) and it would come to around 400,000 per eprson. the goverment would of course tax this money, resulting in 200-250,000 per person. what is the average american going to do with 200,000? pay off their debt. which in turn would, in all probability, keep many companies from folding. then they would buy a house, a car, etc. all of that money would be taxed, going back to the goverment, and the rest would go into the respective business, thus making our economy not only rebound, but flurish.

im sure this will never happen, but if you think about it, it really would fix things.

any opinions on this idea?

[open mind]

a friend of mine said that savage said something interesting on his radio show the other day. the jist of it was help out some, more necessary companies, but let others fall. but the most interesting part of what he said was that we are going to use something like 85 billion dollars to bail out aig alone. take that 85 billion, divide it up accordingly to all american citizens(not green card holders or illegals) and it would come to around 400,000 per eprson. the goverment would of course tax this money, resulting in 200-250,000 per person. what is the average american going to do with 200,000? pay off their debt. which in turn would, in all probability, keep many companies from folding. then they would buy a house, a car, etc. all of that money would be taxed, going back to the goverment, and the rest would go into the respective business, thus making our economy not only rebound, but flurish.

im sure this will never happen, but if you think about it, it really would fix things.

any opinions on this idea?

......it pays to read the thread you're posting in.

[circasuicide]

......it pays to read the thread you're posting in.

i did read alot of the thread. didnt see this point. sorry.

[open mind]

i did read alot of the thread. didnt see this point. sorry.

no need to apologize.

[circasuicide]

the point still remains. if they did give, lets say, even 50,000 to each 18+ citizen, it would help the economy unbelievably.

[open mind]

the point still remains. if they did give, lets say, even 50,000 to each 18+ citizen, it would help the economy unbelievably.

and/or cause inflation to run rampant.

[loveisdead]

and/or cause inflation to run rampant.
That's going to happen either way. It's a very interesting point.

[open mind]

That's going to happen either way. It's a very interesting point.

i don't see inflation going wild if we refuse to bailout wall street....but that seems to bring it's own set of problems.

[Jason Tate]

the point still remains. if they did give, lets say, even 50,000 to each 18+ citizen, it would help the economy unbelievably.
The definition of socialism. And it wouldn't help the economy ... basic macroeconomics here on that level of money -- you can't flood the market with that much money, you'll probably destroy the economy. Supply and demand still would matter in this case -- and you'd see skyrocketing prices, and out of control inflation.

[c_rob2700]

The definition of socialism. And it wouldn't help the economy ... basic macroeconomics here on that level of money -- you can't flood the market with that much money, you'll destroy the economy. Supply and demand still would matter in this case -- and you'd see skyrocketing prices, and out of control inflation.
you are one smart mo-fo

[Jason Tate]

I don’t, in the end, have much more to say about the plan. It passes my test of no equity, no deal; that, plus the danger of financial panic if it doesn’t go through, makes it worth passing, though celebration is not in order. I am surprised that they stayed with Troubled Asset Relief Program; isn’t everything these days supposed to be MPAPRA (the motherhood, patriotism, and apple pie reconciliation act) or something like that? Anyway, you know what comes next: an avalanche of TARP jokes. Say, throwing money into a TARP-pit.

Overall, Dodd and Frank succeeded in pushing Paulson a fairly long way back; probably as good a deal as they could have gotten. But someday we’ll have an administration that actually proposes good policies to start with.

- Princeton Economist - Paul Krugman

[open mind]

I don’t, in the end, have much more to say about the plan. It passes my test of no equity, no deal; that, plus the danger of financial panic if it doesn’t go through, makes it worth passing, though celebration is not in order. I am surprised that they stayed with Troubled Asset Relief Program; isn’t everything these days supposed to be MPAPRA (the motherhood, patriotism, and apple pie reconciliation act) or something like that? Anyway, you know what comes next: an avalanche of TARP jokes. Say, throwing money into a TARP-pit.

Overall, Dodd and Frank succeeded in pushing Paulson a fairly long way back; probably as good a deal as they could have gotten. But someday we’ll have an administration that actually proposes good policies to start with.

- Princeton Economist - Paul Krugman


i still would like to see what it is exactly they're going to sign into law before they sign it into law.

[Jason Tate]

i still would like to see what it is exactly they're going to sign into law before they sign it into law.
http://i.cdn.turner.com/cnn/2008/images/09/28/ayo08c04_xml.pdf

[open mind]

http://i.cdn.turner.com/cnn/2008/images/09/28/ayo08c04_xml.pdf

it seems to me that the stipulation that the government can't pay anymore for what something was originally bought for (which doesn't apply to assets acquired from mergers) sounds ok......but in reality means the taxpayers are going to be ripped off.

[circasuicide]

The definition of socialism. And it wouldn't help the economy ... basic macroeconomics here on that level of money -- you can't flood the market with that much money, you'll probably destroy the economy. Supply and demand still would matter in this case -- and you'd see skyrocketing prices, and out of control inflation.

put a freeze on prices to a degree. a 'dont be greedy' law.

[Jason Tate]

put a freeze on prices to a degree. a 'dont be greedy' law.
Price ceilings are completely counter to supply and demand. Demand runs rampant and/or suppliers drop out. Neither are good for the economy. Same with price floors. This is economics 101 - haha, market price and supply/demand equilibrium are important.

[IAPAI]

just saw this on college humor. pretty funny.

R1X6RQLZtoA

[sjb2k1]

House did not pass bailout. Dow dropping.
http://news.yahoo.com/s/ap/20080929/ap_on_bi_st_ma_re/wall_street

[blindrider529]

Crazy stuff. The Dow is going down, down, down.

I've been watching it live on CNN.com (http://money.cnn.com/2008/09/29/news/economy/bailout/index.htm?postversion=2008092914)

[nfggc10]

It looks like the hope of a second vote today is steadying the ship a bit here. If they vote again and it fails a second time things will get really ugly.

[boykosaurus]

Shit is hitting the fan.

[nfggc10]

I'd like to know how many members are basing their nay vote on the fear that if they vote in favor of it they won't get re-elected.

[sjb2k1]

I'd like to know how many members are basing their nay vote on the fear that if they vote in favor of it they won't get re-elected.that's kinda how that yahoo article made it sound. that many of them are more worried about how it will look than how much it would help.

[Rawrr]

http://i2.cdn.turner.com/cnn/2008/images/09/29/t1wide.mrkt.bail.mon.03.ap.jpg

[asmolitor]

I'd like to know how many members are basing their nay vote on the fear that if they vote in favor of it they won't get re-elected.

i thought that was the main objective of congress - the electoral process rather than trying to enact policy. i have a feeling that due to the aftermath of the iraq authorization vote and how it could make or break politicians, there's an incredible amount of caution based on future individual political gain.

[Broken Parachute]

I'd like to know how many members are basing their nay vote on the fear that if they vote in favor of it they won't get re-elected.I was thinking of this too.

[alice+interiors]

Crazy shit, just watched Obama cruising in and capitalizing spectacularly with his latest speech.

[Broken Parachute]

So let's say for argument's sake that the second vote is not in favor of the bailout again...what happens next?

[alice+interiors]

End of Western civilization as we know it.

[wesgemm08]

The Dow is now officially lower than it was when Bush entered the white house 8 years ago.. I'm sick of all the blame games between the democrats and republicans, but this is ridiculous.

[nfggc10]

So apparently many Republicans voted against the bill out of spite for Pelosi's comments criticizing Bush's economic policies. Voting out of spite? Really?

I hope every one of those idiots isn't re-elected.

[Nametekken]

dow is down 700 dang...

[asmolitor]

So let's say for argument's sake that the second vote is not in favor of the bailout again...what happens next?

the third black monday in our financial history.

[Nametekken]

There has also been some big bank movements in Europe.

[saysmydoctor]

I'm shocked

[wesgemm08]

"Nancy Pelosi hurt my feelings, so I voted against the bill I was planning on voting for."

Give me a fucking break. Some of these Republicans are pitiful humans. I have mixed feelings about the bill, but come on, sack up and give an actual reason WHY you voted against it. If a speech by Pelosi hurts your feelings, you belong no where near politics.

[Jason Tate]

"Nancy Pelosi hurt my feelings, so I voted against the bill I was planning on voting for."

Give me a fucking break. Some of these Republicans are pitiful humans. I have mixed feelings about the bill, but come on, sack up and give an actual reason WHY you voted against it. If a speech by Pelosi hurts your feelings, you belong no where near politics.
I am sure the public loves vindictiveness.

[saysmydoctor]

Nancy Pelosi should have just said vote for this and bitched out after it passed. She knows how the republicans are. Jesus Christ, damn the state of California

[Jason Tate]

Still dropping.

[Jason Tate]

Nancy Pelosi should have just said vote for this and bitched out after it passed. She knows how the republicans are. Jesus Christ, damn the state of California
ey3ZlsmIkz4

She mentions the word "republican" - once.

[saysmydoctor]

Hey, you are barking up the wrong tree. I agree with you. But I'm just a simple "This is vital" would have been amazing. Nothing she said is wrong. But you know the GOP as a whole.

"Financial Services Chairman Barney Frank (D-Mass.), a key negotiator on the bill, mocked the Republicans for blaming Pelosi, saying he would be "uncharacteristically nice" to a dozen Republicans if it meant they would back the package."
http://www.politico.com/news/stories/0908/14050.html

[saysmydoctor]

I counted twice, for the record.

[robat19]

Still dropping.

holy shit down 777 point

[Jason Tate]

House votes no. Rex Nutting has the best line: House to Wall Street: Drop Dead (http://www.marketwatch.com/news/story/story.aspx?guid=%7B6FCA5CAB%2DBFB5% 2D41ED%2D8FBB%2DB4005F4169DA%7D&siteid=djm_HAMWRSSFirstH). He also correctly places the blame and/or credit with House Republicans. For reasons I’ve already explained (http://krugman.blogs.nytimes.com/2008/09/29/bailout-questions-answered/), I don’t think the Dem leadership was in a position to craft a bill that would have achieved overwhelming Democratic support, so make or break was whether enough GOPers would sign on. They didn’t.

I assume Pelosi calls a new vote; but if it fails, then what? I guess write a bill that is actually, you know, a good plan, and try to pass it — though politically it might not make sense to try until after the election.
For now, I’m just going to quote myself (http://krugman.blogs.nytimes.com/2008/09/26/demolition-accomplished/):So what we now have is non-functional government in the face of a major crisis, because Congress includes a quorum of crazies and nobody trusts the White House an inch.
As a friend said last night, we’ve become a banana republic with nukes.

[my name is bilo]

the reps fucked up.

[rob_mylo]

this shit is crazy

[JCCC]

the point still remains. if they did give, lets say, even 50,000 to each 18+ citizen, it would help the economy unbelievably.

your math was wrong anyways. If you were to divide 85 billion between the population of the united states everyone would get about 3-400 dollars.

[Jason Tate]

No surprise here (http://www.politico.com/news/stories/0908/14073.html). Both Barack Obama and John McCain will return to Washington to vote on the bailout bill.

[Hidenothing27]

Man everyone is giving the republicans shit, if anything they saved us. You actually think this bill would have saved this economy? The economy is purging itself from bad investments, bad money, you name it. It's doing it on it's own, the government need not get involved. Yes it will get bad, but I'd bet it gets better far faster then that shoddy bailout package, we'd be paying for the effects of that decades later. Don't jump on the republicans just because it's the coolest thing to do in this forum..

[ror.]

No surprise here (http://www.politico.com/news/stories/0908/14073.html). Both Barack Obama and John McCain will return to Washington to vote on the bailout bill.

wouldn't it have to pass the house before going to the senate though?

[Johnis]

No surprise here (http://www.politico.com/news/stories/0908/14073.html). Both Barack Obama and John McCain will return to Washington to vote on the bailout bill.

The rest of that article made me laugh. When is McCain's face going to make it on the $100 bill?

[drmsofpsilocybi]

The senate still gets to vote even though it failed. If it passes the senate it goes back to the house.

[Jason Tate]

Man everyone is giving the republicans shit, if anything they saved us. You actually think this bill would have saved this economy? The economy is purging itself from bad investments, bad money, you name it. It's doing it on it's own, the government need not get involved. Yes it will get bad, but I'd bet it gets better far faster then that shoddy bailout package, we'd be paying for the effects of that decades later. Don't jump on the republicans just because it's the coolest thing to do in this forum..
Practically every economist I've read disagrees with you ... a package of some sort is extremely vital to shoring up confidence in our markets and "saving" this economy. Under the last draft, tax payers were pretty well protected.

[Ryzenfall]

If these banks don't get rescued, me and all my friends' education is destroyed. I am running on loans...

[robat19]

If these banks don't get rescued, me and all my friends' education is destroyed. I am running on loans...

my education is dependent on the market, I'm losing money everyday

[Poochemist]

Wow I log on after reading all day and apparently all hell breaks loose.

[DItaliaO]

invest in guns and bullets!

[Jason Tate]

The Dow's nearly 778-point drop being the worst single-day point loss ever. (CNN)

[Ryzenfall]

my education is dependent on the market, I'm losing money everyday

Seriously... this is going to be insane on the generation if so many of us are not able to get funded for education. My friend needed to switch providers three times since the beginning of the semester.

I'm trying to contribute to the economy by buying all the albums i can.

[Nightfox33]

This country is up shit creek without a paddle!

[neo506]

Dunno if this was posted but

http://i4.photobucket.com/albums/y101/sgilman/Irony.jpg

[The Summer Ends]

I'm going to give my two cents in here as an 18 year old college student who knows very little about the economy and how it works:

Why are we giving all this money to the banks? What's to say they won't fuck up again and give loans to people who have no business getting loans?

We should redistribute all this bailout money going towards banks and financial institutions to all American citizens 18 and older. If it's the $700,000,000,000 that's in talks, that's well over a billion dollars per American. That's pretty fucking awesome.

EDIT: That would be enough for everyone to pay off all their loans, pay off their debt, etc. etc. etc.

[matt_bergeron]

i think i can sum this whole situation up.......we are fucked.

[Twizx]

I hope the stock market crashes to 0 and the entire country collapses and goes into a riot.

Edit: and in unrelated news, i turned 18 today.

Edit #2: Stop saying we're fucked, they'll eventually pass the bailout in some form.

[matt_bergeron]

I'm going to give my two cents in here as an 18 year old college student who knows very little about the economy and how it works:

Why are we giving all this money to the banks? What's to say they won't fuck up again and give loans to people who have no business getting loans?

We should redistribute all this bailout money going towards banks and financial institutions to all American citizens 18 and older. If it's the $700,000,000,000 that's in talks, that's well over a billion dollars per American. That's pretty fucking awesome.

EDIT: That would be enough for everyone to pay off all their loans, pay off their debt, etc. etc. etc.

yeaaaaa

[drive-thru]

"banana republic with nukes"... so true.

[Hidenothing27]

The Dow's nearly 778-point drop being the worst single-day point loss ever. (CNN)


not the biggest percentage drop though..

[The Summer Ends]

yea, if there were 700 people in america.....study math a bit harder.

Hahahahaha, wow, I'm retarded.

[dcase06]

barney franks comment was about as funny as him running a brothel out his apartment with his boyfriend. all these policiticans are the same people. the dems are the party of "change" yet they still go back to the same politics as usual. and republicans are stuck between some wanting to do what the country wants to win votes and doing what should be done. everyone is to blame. the dems are the majority and if they wanted to they could have passed the bill on their own but 90 vote no. they are all to blame republicans and dems

[everybodywakeup]

I know my dad has over 100k (at least) invested in the stock market, and so today I asked him why he isn't getting out right now, and he said he thinks eventually a bailout agreement will be reached. I really hope he doesn't mess this up.

[blindrider529]

So is John McCain going to suspend his campaign again? The "reasons" he "needed" to suspend his campaign last week are here again this week in full force. How could he claim that he needed to suspend so desperately last week, but this week he doesn't need to?

If he doesn't suspend it again that's pretty much the ultimate proof that it was a political ploy (not that we didn't already know...)

[moronindisguise]

I hope the stock market crashes to 0 and the entire country collapses and goes into a riot.

Edit: and in unrelated news, i turned 18 today.

Edit #2: Stop saying we're fucked, they'll eventually pass the bailout in some form.



you, sir, are an ass

please don't exercise your right to vote, because you don't know shit

[ToMyBetterAngel]

I'm going to give my two cents in here as an 18 year old college student who knows very little about the economy and how it works:

Why are we giving all this money to the banks? What's to say they won't fuck up again and give loans to people who have no business getting loans?

We should redistribute all this bailout money going towards banks and financial institutions to all American citizens 18 and older. If it's the $700,000,000,000 that's in talks, that's well over a billion dollars per American. That's pretty fucking awesome.

EDIT: That would be enough for everyone to pay off all their loans, pay off their debt, etc. etc. etc.

lol

[Jason Tate]

I hope the stock market crashes to 0 and the entire country collapses and goes into a riot.

Edit: and in unrelated news, i turned 18 today.

Edit #2: Stop saying we're fucked, they'll eventually pass the bailout in some form.
No thanks.

[everybodywakeup]

not the biggest percentage drop though..

yeah, it doesn't even touch the great depression.

[IAPAI]

so, CNN just said that because of the Jewish holiday beginning tonight at sundown, nothing will be decided until Wednesday or Thursday.

[Jason Tate]

barney franks comment was about as funny as him running a brothel out his apartment with his boyfriend. all these policiticans are the same people. the dems are the party of "change" yet they still go back to the same politics as usual. and republicans are stuck between some wanting to do what the country wants to win votes and doing what should be done. everyone is to blame. the dems are the majority and if they wanted to they could have passed the bill on their own but 90 vote no. they are all to blame republicans and dems
They could not have passed the bill on their own - the House is where it failed.

[Jason Tate]

I know my dad has over 100k (at least) invested in the stock market, and so today I asked him why he isn't getting out right now, and he said he thinks eventually a bailout agreement will be reached. I really hope he doesn't mess this up.
You should never pull after a crash ... you have to look at the long term investments, and over time, the stockmarket has never lost money. Even if you would have invested yesterday, theoretically, in 10 years - you will have made money (based on the history of the market).

[Twizx]

you, sir, are an ass

please don't exercise your right to vote, because you don't know shit

Oh that's so mean I was going to write you in too!

[Ryzenfall]

I hope the stock market crashes to 0 and the entire country collapses and goes into a riot.

Edit: and in unrelated news, i turned 18 today.

Edit #2: Stop saying we're fucked, they'll eventually pass the bailout in some form.

Your first comment: In other news, there are about six billion people on this planet besides you.
Second comment: Happy birthday!
Third: Panicking does nothing, but the smartest people in the world are still trying to figure out what to do right now.

[Twizx]

so, CNN just said that because of the Jewish holiday beginning tonight at sundown, nothing will be decided until Wednesday or Thursday.

lol

[ZoSo1886]

Long term is always the way to go with the stock market. I am glad i have not invested any money in the market yet. I always invest in CDs and those seem to always be good for me!

[WFUJerseyJon]

Fuck this economy. I'm now being laid off at the end of next month because of it. FUCK MY LIFE!

[Hidenothing27]

yeah, it doesn't even touch the great depression.

I see this bailout as only short term, just as those surplus checks are fading as will this. There is a reason why this happened, and make no mistake people, the greedy bastards on wall street are all trying to benefit from the package so they're mistakes can be be cleansed.

[Hidenothing27]

how anyone thinks this will not hurt our dollar is absurd to me.

on a lighter note...

oil fell 10 bucks to about 100 a barrel.. looks like this guy may be able to fill up for under 40 bucks soon!

[Jason Tate]

I see this bailout as only short term, just as those surplus checks are fading as will this. There is a reason why this happened, and make no mistake people, the greedy bastards on wall street are all trying to benefit from the package so they're mistakes can be be cleansed.
This is a problem with political policy and wall street greed -- both sides are responsible.

[Jason Tate]

Fuck this economy. I'm now being laid off at the end of next month because of it. FUCK MY LIFE!
That sucks, I'm sorry.

[WFUJerseyJon]

That sucks, I'm sorry.

Thanks, Jason. I appreciate it.

[NorthofSD]

Sure...Wall Street took a dive today.....but what are we going to do about it? It's not like someone is trying to give us a sign or anything. I mean....777 points down....if only there were a sign or something. Like...um....a number....or something...that would give the country direction in these uncertain times. I can't help but think that 7 is an important number somehow? Like...it's mentioned a lot in a specific book.....was it Everything Hurts.....no.....maybe it was in that book Teri Irwin wrote about Steve....no that wasn't it......I can't think of it now. Crikey...777!

[Jason Tate]

:hitself:

[ToMyBetterAngel]

Sure...Wall Street took a dive today.....but what are we going to do about it? It's not like someone is trying to give us a sign or anything. I mean....777 points down....if only there were a sign or something. Like...um....a number....or something...that would give the country direction in these uncertain times. I can't help but think that 7 is an important number somehow? Like...it's mentioned a lot in a specific book.....was it Everything Hurts.....no.....maybe it was in that book Teri Irwin wrote about Steve....no that wasn't it......I can't think of it now. Crikey...777!

oh come on

[oldwirehands]

http://www.guardian.co.uk/business/2008/sep/29/wallstreet.marketturmoil

Pretty surprised it was rejected. I'm happy about it.

[oldwirehands]

Sure...Wall Street took a dive today.....but what are we going to do about it? It's not like someone is trying to give us a sign or anything. I mean....777 points down....if only there were a sign or something. Like...um....a number....or something...that would give the country direction in these uncertain times. I can't help but think that 7 is an important number somehow? Like...it's mentioned a lot in a specific book.....was it Everything Hurts.....no.....maybe it was in that book Teri Irwin wrote about Steve....no that wasn't it......I can't think of it now. Crikey...777!

Is this real?

[PunkRocks]

The problem with redistributing that money to American citizens over the age of 18 is that it would only amount to roughly $3,100 per American (700b divided by approx 225m). If I remember, earlier this year something along these lines was already attempted and failed miserably. Sure, all of you are sitting there saying "Man, id love 3,000 from the government!" The only problem is that you are going to end up paying it right back in taxes.

One of the main reasons for the vote against the bailout is simply the other ramifications it would have on the economy. The dems were in support of the bailout because they saw it as a quick fix to the problems in the banking industry, which would greatly help them in an election year. The republicans were more worried about the longterm effects on the rest of the economy and on individual American citizens. Sure, the bailout would save many banks, but it would be rewarding the banks that misbehaved and punishing the banks who practiced fair and honorable lending measures. Furthermore, the effect of this on the national debt would have led to a further, and rapid decrease in the value of the American dollar. This would in turn cause the price of oil, food, and other retail goods to soar yet again. This would lead to more strain on individual American taxpayers and businesses, which would be strained even more by the tax burden of paying off the $700m bailout package.

A lot of gossip about the bill when it was first being introduced is that a lot of the pressure and support of it was coming from the Chinese. Many people speculated that the bill was never meant to actually pass, but was more a form of appeasement to one of our most profitable international business partners.

As an employee of one of the leading banks in the country, I am glad the bill failed. On the other hand, my mother works for a financial institution which fell today because of their inability to overcome their losses from their lending practices. The result of that? My parents lost over $25,000 of their retirement savings in approximately 15 minutes.

What is going to happen now that the bill has failed is what has been needing to happen for quite awhile. There will be a drastic reform of the banking industry, including many major buyouts and mergers amongst struggling banks. This was already hinted at today with Citibank's acquisition of Wachovia (what is interesting to me is that this happened before the vote in congress, which made it seem like there was great speculation amongst the banks that the bill would in fact be voted down). In turn, this is going to cause a lot of people to lose invested money (but not money in traditional bank accounts such as checkings and savings). However, in my and many others opinion, the losses from this still seem to be better than the horrendous effects the $700b bailout would have caused.

[IAPAI]

lol

it's not really funny

[NorthofSD]

oh come on

I'm just glad it didn't drop 182 points. Now that would be a conspiracy...probably marketed by FOB.

[staige]

i think that gov. shouldn't have to bail these guys out. they made their decisions now let their actions take its course.
i know we're in an unofficial recession, that only leads to depression. Howmuch farther can we sink

[drmsofpsilocybi]

the biggest problem here, is that theres really no problem... 50% of all this shit is because too many people are uneducated, or overly educated in finance. Its panic at its best. This is not going to be another depression, it will be a prolonged recession, followed in two years by another huge trendy bubble that will grow in the market... and eventually pop in 20 years.

[johnh5304]

At this rate, I'll never be able to find a damn job!

[Heart-A-Tact]

Sure...Wall Street took a dive today.....but what are we going to do about it? It's not like someone is trying to give us a sign or anything. I mean....777 points down....if only there were a sign or something. Like...um....a number....or something...that would give the country direction in these uncertain times. I can't help but think that 7 is an important number somehow? Like...it's mentioned a lot in a specific book.....was it Everything Hurts.....no.....maybe it was in that book Teri Irwin wrote about Steve....no that wasn't it......I can't think of it now. Crikey...777!

Oh.. no.

[aoftbsten]

i'm glad i own zero stocks in anything at the moment. but i'm sure this will find its was round to all of us eventually

[Twizx]

it's not really funny

lol:drew:

[PunkRocks]

*edit

Tomorrow look for the possibility of the DOW being up... probably not 700+ points but many people will start buying in an effort to take advantage of lower stock prices.

[Jason Tate]

Oh, to clear it up for people.. the DOW ended up down around 600 points. Yes, it was down over 750 at one point, but came back some.

Tomorrow look for the possibility of the DOW being up... probably not 600+ points but many people will start buying in an effort to take advantage of lower stock prices.
The DOW closed at -777.68 (http://finance.google.com/finance).

[WarpSpeedChewy]

The DOW closed at -777.68 (http://finance.google.com/finance).
FUCK.

[PunkRocks]

The DOW closed at -777.68 (http://finance.google.com/finance).

You're right, evidently my local news didn't update the reporter's segment that just aired saying the DOW was going to close around 600 down. Shame on me for not checking my facts.

[Jason Tate]

DOW January 19, 2001: 10,587.59
DOW September 29, 2008: 10,365.45

NASDAQ Jan 19, 2001 = 2770.38
NASDAQ September 29, 2008 = 1983.73

CPI, January 19, 2001: 175
CPI, September 29, 2008: 219

Dollar exchange with Euro, January 19, 2001: 1.068
Dollar exchange with Euro, September 29, 2008: .695

[NorthofSD]

You're right, evidently my local news didn't update the reporter's segment that just aired saying the DOW was going to close around 600 down. Shame on me for not checking my facts.

Shame on you? Shame on me! I thought with a close of 777 something big was going to happen. But Jason has informed me of a .68 that I was not aware of. Shame on you .68! You screwed me over in 3rd grade, and now you come back to haunt me in my Absolutepunk.net postings! If only I could teach Wall Street to improperly round!

[PunkRocks]

Dollar exchange with Euro, January 19, 2001: 1.068
Dollar exchange with Euro, September 29, 2008: .695


In defense of this number, at that time (2001) the Euro was still a relatively new currency (only introduced in 1999) and consumer support and faith was still growing. It has been long expected for the Euro to be a stronger currency than the dollar.

Regardless, I understand what you're getting at.

[PunkRocks]

Shame on you? Shame on me! I thought with a close of 777 something big was going to happen. But Jason has informed me of a .68 that I was not aware of. Shame on you .68! You screwed me over in 3rd grade, and now you come back to haunt me in my Absolutepunk.net postings! If only I could teach Wall Street to improperly round!

Yeah, Ill just say I improperly rounded too...

[WCC335]

the reps fucked up.

keep in mind, 40% of dems opposed the bill. Everyone fucked up.

[musicsavesme]

.....ladies and gentleman i now present to you the GREAT DEPRESSION PART 2

[ToMyBetterAngel]

not quite yet

[NorthofSD]

.....ladies and gentleman i now present to you the GREAT DEPRESSION PART 2

I can't remember if this part comes before, or after Attack of the Clones? I've always struggled with chronological fantasy.

[Jason Tate]

I could see the market dropping below 9. Thank God I'm not retiring for 30+ years.

[musicsavesme]

I can't remember if this part comes before, or after Attack of the Clones? I've always struggled with chronological fantasy.
just pray its not pirates of the carrabein 3 at worlds end

[Twizx]

keep in mind, 40% of dems opposed the bill. Everyone fucked up.

I would vote against the bill too, why should tax payers have to bail out greedy bankers who fucked up? The government should let the business fail and compensate regular citizens that aren't insiders that lost money due to it failing. Just my 2 cents, I don't think these dudes should be in charge if they don't know what the fuck they're doing.

Edit:

I don't mind helping people, but help the god damn people that are losing their homes and jobs, not the greedy fucken bankers and people running america.

[NorthofSD]

just pray its not pirates of the carrabein 3 at worlds end

I'm not worried...when life hands you -777.68...you make -777.68 lemonade....but be warned...it taste suspiciously like Sierra Mist and Puma urine.

[Cameronisonfire]

Well shits fucked up. Who wants to party?

[musicsavesme]

I'm not worried...when life hands you -777.68...you make -777.68 lemonade....but be warned...it taste suspiciously like Sierra Mist and Puma urine.
lol that just made my day..thank you!

[thepianominstre]

Most people seemed to oppose this bill on a simple notion that it was rewarding Wall Street people with their own taxpayer money. I oppose it because I actually read up on the bill and some of the actual text, and it would have granted frightening powers to the Secretary of the Treasury and set up a host of agencies. Plus we simply can't afford to borrow more money from foreign countries. The government has to stop spending more money than it has; people who made bad decisions have to take the consequences. I don't believe all this Doomsday crap. Things will get worse but this bill would not have helped just as the drastic government actions of the 30's needlessly prolonged the Great Depression.

[NorthofSD]

lol that just made my day..thank you!

It does sound refreshing. I'd better copyright those ingredients before Jones Soda gets to it and releases it in a special BLACK MONDAY VARIETY PACK which also features GW Tears and The Soda formally known as Dr. Pepper (now that crazy guy that lives in the dumpster next to Arby's and is always asking if he can smell your toenail clippings).

[PlacesToGo]

the notion that republicans want to keep government "small" is the most backwards thing ever for millions of reasons. but especially in the face of an economic crisis. this is why redneck racists shouldnt run our country.

[thesecondplace]

<object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/lFh6PU6qM9Q&color1=0xb1b1b1&color2=0xcfcfcf&fs=1"></param><param name="allowFullScreen" value="true"></param><embed src="http://www.youtube.com/v/lFh6PU6qM9Q&color1=0xb1b1b1&color2=0xcfcfcf&fs=1" type="application/x-shockwave-flash" allowfullscreen="true" width="425" height="344"></embed></object>

and let me just add that there is NO FUCKING WAY that me or my daughters will get stuck paying for this epic bill without a fight. there is FAR too much blame to go around to simply make a few cosmetic changes, then rubber stamp this terrible idea. anyone out there hoping for "change" this fall? you should start by voting for representatives that TRULY believe in a free-market. the idea that our markets operate "free" is a myth. government intrusion is just as predominate as government welfare. the truth of the matter is that many so-called "fiscal conservatives" & "free-marketeers" are only so on the way up, and shitting themselves on the way down. the last two weeks has done more to prove this point than any other wealth of historical data i could provide. if you pay attention to c-span at all, how many politicians did you hear last week say, "well, i am ALLL for free markets and deregulation, but..." that said, blaming republicans, democrats, greedy bankers, lobbyist, or the stupid people that took out arms that they knew they could not afford should the housing bubble (gasp) busrt is just a distraction from the root evil. as long as our politicians (all sides equally guilty), continue to regulate what is beneficial to them and then provide a mattress to cushion what is also beneficial to them, the cycle will continue endlessly. without hitting rock bottom, the market will never truly correct itself. obviously its going to be painful to a lot of people, but that's a lesson learned. the government can regulate businesses all it wants, but it can never force a person or business or industry to practice ETHICS.

[nowa312]

Practically every economist I've read disagrees with you ... a package of some sort is extremely vital to shoring up confidence in our markets and "saving" this economy. Under the last draft, tax payers were pretty well protected.




i work in the industry and was just part of a huge merger today... if citi didnt buy wb, wb wouldve most likely failed today... its pretty scary when the 4th biggest bank in the US can fail. extremely vital doesnt even stress the importance of this bail out.. you are going to see a snow ball effect on the smaller banks failing now and lending is going to remain practically frozen for god knows how long.. that means no refinances for customers in bad mortgages which means more forclosures.. it means that it probably going to be hard to get approved for even a car loan if you have under a 750 credit score. also most businesses rely on loans for growth so without financing it doesnt give the economy a chance to grow. then with the financial organizations going out of business that is putting 1000's and 1000's of people out of jobs which means less people who are able to pay taxes, more forclosures, and less people buying things (stimulating the economy). It has the potential to snow ball the entire economy and I dont understand how this thing didnt get approved. Instead the republicans will remain greedy and youll continue to see these CEO's walking away with millions of dollars and the middle class continue to diminish.

theres my rant and rave about the market on a music website... haha

[Mirrorsandfevers]

Someone give me a summary on what happened today and why

[matt_bergeron]

Hahahahaha, wow, I'm retarded.


nah, i think i did the math wrong too haha

[nowa312]

I would vote against the bill too, why should tax payers have to bail out greedy bankers who fucked up? The government should let the business fail and compensate regular citizens that aren't insiders that lost money due to it failing. Just my 2 cents, I don't think these dudes should be in charge if they don't know what the fuck they're doing.

Edit:

I don't mind helping people, but help the god damn people that are losing their homes and jobs, not the greedy fucken bankers and people running america.




i understand where youre coming from but its honestly everyone's fault... the greedy bankers, the stupid people getting in these ridiculous mortgages they couldnt afford, but most of all the government for never placing any regulation on banks and lenders... there are regulations on almost every other entity in banking except lending... to sell securities (annuities, stocks, mutual funds) you need to be lisenced by the SEC and if you don't do what is suitable for the customer you WILL lost your lisence and you WILL go to jail.. If the govt had placed regulations on lending similar to the securities it wouldve prevented many of these predatory lenders and crooked bankers from ever being able to do business... and youre right it sucks that the tax payers would be the ones paying for the bail out but something has to be done and has to be done soon or this country is going to be so fucked up its scary...

[jspace]

Man everyone is giving the republicans shit, if anything they saved us. You actually think this bill would have saved this economy? The economy is purging itself from bad investments, bad money, you name it. It's doing it on it's own, the government need not get involved. Yes it will get bad, but I'd bet it gets better far faster then that shoddy bailout package, we'd be paying for the effects of that decades later. Don't jump on the republicans just because it's the coolest thing to do in this forum..

it's not JUST because of this bill that people are blaming the republicans. this WHOLE situation is because of the poor fiscal regulation of the republican party. don't make it seem like it's this ONE thing that everyone is angry about. the fact that we are in this position at all after clinton had left us with that huge surplus is fucking ridiculous. watch the news, it's not the cool thing to do to jump on the republicans, it's the smart thing cause we don't need another 4 years of this bullshit.

[Until The Bombs]

it's not JUST because of this bill that people are blaming the republicans. this WHOLE situation is because of the poor fiscal regulation of the republican party. don't make it seem like it's this ONE thing that everyone is angry about. the fact that we are in this position at all after clinton had left us with that huge surplus is fucking ridiculous. watch the news, it's not the cool thing to do to jump on the republicans, it's the smart thing cause we don't need another 4 years of this bullshit.

Just to be fair. Democratic politicians are to blame as well.

[aminorthreat55]

Roll call on the vote:
http://clerk.house.gov/evs/2008/roll674.xml

My rep voted no.

[Machu505]

Roll call on the vote:
http://clerk.house.gov/evs/2008/roll674.xml

My rep voted no.

My rep voted no as well. Dammit we need to get rid of Capito.

[robat19]

Seriously... this is going to be insane on the generation if so many of us are not able to get funded for education. My friend needed to switch providers three times since the beginning of the semester.

I'm trying to contribute to the economy by buying all the albums i can.

Well buying all the albums you can isn't going help yourself in this crisis. This makes people want to go and download them for free.

[robat19]

My rep voted no as well. Dammit we need to get rid of Capito.

Mine voted yes.

[thesecondplace]

Mine voted yes.

who, ehlers? he won't be re-elected because of it.

[jbaseball44]

Someone give me a summary on what happened today and why
The Bailout bill went to a vote and it failed to pass in the house. The news of the bailout bill failing caused turmoil in the stock market which lead to the dow being down about 777 points. There are many reasons why you could say it failed depending on who you want to believe. Pelosi's speech, the republicans just didn't have enough votes to push to threw, the democrats didn't have enough votes to push it through, etc.

[Machu505]

Mine voted yes.

Our rep is up for re-election this year, and I hope we kick her out and turn WV almost completely blue (senate, governor, house of reps).

Anne Barth '08

[splitsecond]

Someone give me a summary on what happened today and why

The bailout was a bad idea to begin with. Most lawmakers are now hearing people call in to their offices, write in, email that they should not vote to pass this. Conservatives are having an especially tough time with it - but no one wanted to be known as the person who voted it down and caused a catastrophic stock collapse.

Nancy Pelosi decided it would be wise to make an inflammatory partisan remark prior to the vote, which basically put every Republican who was on the fence into the no column, and the bill failed. Chaos ensued.

[Cfw828]

The Dow dropped 7% and the Nasdaq dropped 9%...that's a bad WEEK, let alone a bad day.

There needs to be something done and soon. I just hope it doesn't fall much farther than it has.

[vegas skies]

I have a question, is this drop worse than the depression drop? Or is the depression drop worse?

[Jason Tate]

I have a question, is this drop worse than the depression drop? Or is the depression drop worse?
% wise, no, # wise, yes.

[splitsecond]

I have a question, is this drop worse than the depression drop? Or is the depression drop worse?

Its different. If you really have to say "which is worse?" the circumstances around the great depression were much worse, though the causes to this are kind of a microcosm of the same things that caused the depression.

[open mind]

i applaud everyone who voted no as it took alot of guts to do because it will upset those in power and the media (owned by those in power) will probably not be overly pleased with them.....but it was the right thing to do because the current bill is garbage.

[oldwirehands]

i applaud everyone who voted no as it took alot of guts to do because it will upset those in power and the media (owned by those in power) will probably not be overly pleased with them.....but it was the right thing to do because the current bill is garbage.

I'm still surprised that Congress pulled through for the people. Its going to help me sleep better at night.

[open mind]

I'm still surprised that Congress pulled through for the people. Its going to help me sleep better at night.

yeah, if anything the no votes have shown me that there might just be hope for this country after all.

[SilenceBrokenTT]

http://tenpercent.files.wordpress.com/2008/09/6a00d8341bf82953ef010534d60091970c-500wi.jpg

[Jason Tate]

I'm still surprised that Congress pulled through for the people. Its going to help me sleep better at night.
For the people? Their actions today will hurt the people in ways I don't think many even realize. Credit is about to dry up, small businesses are going to go under, and unemployment is going to continue to rise. Look for 6.5% later this week.

The current bill protected the taxpayers and the confidence it would instill into the market is absolutely vital.

[splitsecond]

Was just contemplating this....


Could Pelosi's political move been purposeful? Lets think about this one: Obama scores well when the economy is an issue. If the financial industry is bailed out NOW, and in a month things are clearly stabilizing, that could take some wind out of the economic sail that Obama gains from, and focus things back on foreign policy, McCain's strong point. To top that off, Pelosi can parlay the failure on to the Republicans (at least to an extent) and blame them for the failure by voting no, even further strengthening Obama.


So is it possible? Is Pelosi gambling America's future to gain political power for the Democrats?

[Jason Tate]

An economists take (http://www.nytimes.com/2008/09/29/opinion/29krugman.html?partner=rssnyt&emc=rss) on the two candidates and their economic advisors as it relates to this crisis.

Now, to a large extent the poor quality of Mr. McCain’s advisers reflects the tattered intellectual state of his party. Has there ever been a more pathetic economic proposal than the suggestion of House Republicans that we try to solve the financial crisis by eliminating capital gains taxes? (Troubled financial institutions, by definition, don’t have capital gains to tax.)

[open mind]

For the people? Their actions today will hurt the people in ways I don't think many even realize. Credit is about to dry up, small businesses are going to go under, and unemployment is going to continue to rise. Look for 6.5% later this week.

The current bill protected the taxpayers and the confidence it would instill into the market is absolutely vital.

some short term hits are better then funding a consolidation of financial power the likes of which america has never seen....because that's really what this bill would do, give most of the money to the "most important" banks and investment groups, allowing them to either buy up thier rivals or let them go bankrupt.
even you will admit that the current bill has glaring problems.

[Jason Tate]

Was just contemplating this....


Could Pelosi's political move been purposeful? Lets think about this one: Obama scores well when the economy is an issue. If the financial industry is bailed out NOW, and in a month things are clearly stabilizing, that could take some wind out of the economic sail that Obama gains from, and focus things back on foreign policy, McCain's strong point. To top that off, Pelosi can parlay the failure on to the Republicans (at least to an extent) and blame them for the failure by voting no, even further strengthening Obama.


So is it possible? Is Pelosi gambling America's future to gain political power for the Democrats?
No. As the timeline for the bailout and the economy itself will continue to be a massive issue for the next 5-8 years. The poll numbers would also not dramatically shift in the next 45 days as you purport. The bill passing would help Obama more than it not.

If you honestly believe that her speech (which is featured in this thread, and nothing like you're making it seem) was the reason for people voting "no" - that speaks to those who cast the "no" votes based upon one speech more than it does the speech itself.

[open mind]

Was just contemplating this....


Could Pelosi's political move been purposeful? Lets think about this one: Obama scores well when the economy is an issue. If the financial industry is bailed out NOW, and in a month things are clearly stabilizing, that could take some wind out of the economic sail that Obama gains from, and focus things back on foreign policy, McCain's strong point. To top that off, Pelosi can parlay the failure on to the Republicans (at least to an extent) and blame them for the failure by voting no, even further strengthening Obama.


So is it possible? Is Pelosi gambling America's future to gain political power for the Democrats?

it's possible.....but batshit insanity to auctually believe.

[splitsecond]

hahahaha I want to know who the idiot was that proposed that. holy lack of tax knowledge.

[Jason Tate]

some short term hits are better then funding a consolidation of financial power the likes of which america has never seen....because that's really what this bill would do, give most of the money to the "most important" banks and investment groups, allowing them to either buy up thier rivals or let them go bankrupt.
even you will admit that the current bill has glaring problems.
But problems that still make it worth passing.

There is a big chance without its passing smaller banks will simply fail. These short term hits you are talking about could very well bring the country to its knees.

I'll repost what I wrote in an earlier thread:

1) It’s true that some parts of the real economy are doing OK even in the face of financial disruption; big companies can still sell bonds (and have lots of cash on hand), qualifying home buyers can still get Fannie-Freddie mortgages, and so on. But commercial paper, which is important to a lot of businesses, is in trouble, and I’m hearing anecdotes about reduced credit lines causing smaller businesses to pull back. Plus there’s a serious chance of a run on the hedge funds, which could make things a lot worse. With the economy already looking like it’s headed into a serious recession by any definition, the risks of doing nothing look too high.

2) The credit markets are freezing up as you read this (1-month t-bill at 0.04 %, TED spread at 3.5)

[asmolitor]

The Dow dropped 7% and the Nasdaq dropped 9%...that's a bad WEEK, let alone a bad day.

There needs to be something done and soon. I just hope it doesn't fall much farther than it has.

hell, those percentages would make for an off year.

DOW January 19, 2001: 10,587.59
DOW September 29, 2008: 10,365.45

NASDAQ Jan 19, 2001 = 2770.38
NASDAQ September 29, 2008 = 1983.73

CPI, January 19, 2001: 175
CPI, September 29, 2008: 219

Dollar exchange with Euro, January 19, 2001: 1.068
Dollar exchange with Euro, September 29, 2008: .695


i'd probably attribute the drastic nasdaq drop to the falling out in the wake of the dot-com/tech boom. but the others are quite inexcusable.

how anyone thinks this will not hurt our dollar is absurd to me.

on a lighter note...

oil fell 10 bucks to about 100 a barrel.. looks like this guy may be able to fill up for under 40 bucks soon!

you know, the first and last sentences of that don't really agree with each other.

[Jason Tate]

hahahaha I want to know who the idiot was that proposed that. holy lack of tax knowledge.
It was the House Republican Study Committee (those voting against the bill today) that proposed it, and McCain is the one that brought it up at the White House meeting last week.

[splitsecond]

No. As the timeline for the bailout and the economy itself will continue to be a massive issue for the next 5-8 years. The poll numbers would also not dramatically shift in the next 45 days as you purport. The bill passing would help Obama more than it not.

If you honestly believe that her speech (which is featured in this thread, and nothing like you're making it seem) was the reason for people voting "no" - that speaks to those who cast the "no" votes based upon one speech more than it does the speech itself.

Well, as far as shifting the vote, American's are incredibly guilty of utilizing short term logic over long term - so I still think it is possible that it could change, or at least that the idea would be thrown around.

As far as the no voter's - I agree that if that is the ONLY reason to vote no, its straight up ignorant. However, I am sure a lot of them were wary to begin with, and that may have pushed them over the edge. In either case, it was at the very least extremely irresponsible of her to say what she did. She had the opportunity to lead, and she failed to do so by causing what should have been a pretty predictable partisan fight in the midst of an economic crisis. Now is not the time to be pointing fingers or posturing.

it's possible.....but batshit insanity to auctually believe.

It was just kind of a thought. And much more batshit insane things happen all the time, so who knows.

[open mind]

But problems that still make it worth passing.

There is a big chance without its passing smaller banks will simply fail. These short term hits you are talking about could very well bring the country to its knees.

I'll repost what I wrote in an earlier thread:

1) It’s true that some parts of the real economy are doing OK even in the face of financial disruption; big companies can still sell bonds (and have lots of cash on hand), qualifying home buyers can still get Fannie-Freddie mortgages, and so on. But commercial paper, which is important to a lot of businesses, is in trouble, and I’m hearing anecdotes about reduced credit lines causing smaller businesses to pull back. Plus there’s a serious chance of a run on the hedge funds, which could make things a lot worse. With the economy already looking like it’s headed into a serious recession by any definition, the risks of doing nothing look too high.

2) The credit markets are freezing up as you read this (1-month t-bill at 0.04 %, TED spread at 3.5)

i can't agree that those problems are worth overlooking to get a bad bill passed.

the country could in fact face some crippling economic times, but i'll take that over close to absolute financial power in a few hands at the taxpayers expense.....i'm not totally against a bailout plan.....but it has to make sense for the taxpayer, be more transparent, help the average family in some concrete way, and insure that it doesn't fund more power in less hands.

[splitsecond]

It was the House Republican Study Committee (those voting against the bill today) that proposed it, and McCain is the one that brought it up at the White House meeting last week.

I would like to see the reasoning behind that, because I feel like I HAVE to be missing something. Are his advisors really THAT bad?

[Jason Tate]

i can't agree that those problems are worth overlooking to get a bad bill passed.

the country could in fact face some crippling economic times, but i'll take that over close to absolute financial power in a few hands at the taxpayers expense.....i'm not totally against a bailout plan.....but it has to makes sense for the taxpayers and insure that it doesn't fund more power in less hands.

The downfall of our entire economical civilization is worth it? I could never agree with that. And it's not at the taxpayers expense if it returns a profit, which the congressional plan could - as it shares equity. However, what's more at the taxpayers expense -- the bailout, or the entire financial system crashing to the point where they have no money? That's becoming a very real possibility as credit begins to dry up. This means houses, cars, student loans for schools, credit cards - everything, coming to a halt. And that will lead to foreclosures, unemployment, the sinking of small businesses ... during financial crises, it's important to pump capital into the financial system.

This is becoming very scary as the numbers continue to come in.

[Jason Tate]

I would like to see the reasoning behind that, because I feel like I HAVE to be missing something. Are his advisors really THAT bad?
Ask John A. Boehner. :shrug: Their "alternative plan" was downright insane.

[splitsecond]

I am surprised no one has proposed "start WWIII" as a bailout yet.

[Jason Tate]

I am surprised no one has proposed "start WWIII" as a bailout yet.
Just imagine what would happen if there was an attack on American soil this week ... the house of cards would come tumbling down.

[Jason Tate]

Taxpayers are already on the hook for the failures of financial institutions, (http://www.time.com/time/topics/wall-street/0,30939,,00.html) and it's possible that the bill will actually be larger without bailout legislation than with it. That's because the regulators who mind the financial industry — the Federal Reserve, Treasury and FDIC — will keep doing what they've been doing: stepping in to prevent the chaotic failure of banks and other large financial institutions. This means continuing to put hundreds of billions of taxpayer dollars at risk, but in a way that adheres to no clear plan of action and doesn't require members of Congress to explicitly approve their actions.

Federal authorities are going to keep doing whatever they can to keep the financial system from collapsing. Taxpayers will bear the risks and the costs of that, whether Congress votes to put them there or not. And it's possible — although nobody can know for sure — that this ad hoc approach will end up costing more than an up-front $700 billion bailout.

http://www.time.com/time/nation/article/0,8599,1845609,00.html?cnn=yes

[Machu505]

Just imagine what would happen if there was an attack on American soil this week ... the house of cards would come tumbling down.

Ahmadinejad did say the american empire would tumble soon.

[open mind]

The downfall of our entire economical civilization is worth it? I could never agree with that. And it's not at the taxpayers expense if it returns a profit, which the congressional plan does - share equity. However, what's more at the taxpayers expense -- the bailout, or the entire financial system crashing to the point where they have no money? That's becoming a very real possibility as credit begins to dry up. This means houses, cars, student loans for schools, credit cards - everything, coming to a halt. And that will lead to foreclosures, unemployment, the sinking of small businesses ... during financial crises, it's important to pump capital into the financial system.

don't be such a drama queen.....i said i'm not against a bailout altogether, just that it has to be a good one.......but i still say that a depression is better then the general publics loss of all financial power because depressions don't last forever.....i know you want this passed because it stands to directly benefit you to some degree as you've got a portfolio of investments.

i've asked you multiple times why you think this bailout would reap a profit, and you've failed to answer me every time.....simply telling me it's going to make a profit doesn't make it so......and i've looked at the congressional plan and what i've read doesn't tell me profits are anything to hope for in the next decade or 2 at which point inflation would have already made said "profit" meaningless.

[Jason Tate]

Asian and Pacific stock markets tumbled in early trading on Tuesday after the U.S. House of Representatives failed to adopt a Wall Street bailout measure, triggering the largest point drop in U.S. market history.

Japan's Nikkei index dropped 4.8 percent in the first hour of trading, while the Australian Securities Exchange fell 4.5 percent.

South Korea's KOSPI dropped 3.6 percent.

[PunkRocks]

Taxpayers are already on the hook for the failures of financial institutions, (http://www.time.com/time/topics/wall-street/0,30939,,00.html) and it's possible that the bill will actually be larger without bailout legislation than with it. That's because the regulators who mind the financial industry — the Federal Reserve, Treasury and FDIC — will keep doing what they've been doing: stepping in to prevent the chaotic failure of banks and other large financial institutions. This means continuing to put hundreds of billions of taxpayer dollars at risk, but in a way that adheres to no clear plan of action and doesn't require members of Congress to explicitly approve their actions.

Federal authorities are going to keep doing whatever they can to keep the financial system from collapsing. Taxpayers will bear the risks and the costs of that, whether Congress votes to put them there or not. And it's possible — although nobody can know for sure — that this ad hoc approach will end up costing more than an up-front $700 billion bailout.

http://www.time.com/time/nation/article/0,8599,1845609,00.html?cnn=yes

Interesting of him to say that, because so far the FDIC has done two things:

1) Uphold their promises of insurance to the clients of the local and regional banks that have failed so far

2) Broker a deal between Citi and Wachovia to keep Wachovia from going under, thus putting the burden of debt on Citi instead of on the taxpayers.

[Jason Tate]

don't be such a drama queen.....i said i'm not against a bailout altogether, just that it has to be a good one.......

I'm not being a drama queen, I just know what is at stake here. I've looked at the numbers, I am smart enough to figure it out. And you're never going to get a "perfect one" - you're going to get "good enough." This current bailout was definitely good enough. It passed the mustard for what needed to be done, protected taxpayers, had oversight, and had limitations. Doing nothing is worse.

but i still say that a depression is better then the general publics loss of all financial power because depressions don't last forever.....i know you want this passed because it stands to directly benefit you to some degree as you've got a portfolio of investments.

I don't think you realize what this will do to everyone, it's not just about investments. And I really, really don't think you know what another depression will be like. And if that does hit -- the general public will have absolutely zero financial power. And we can't just shore up a "New Deal" to fix it this time.

i've asked you multiple times why you think this bailout would reap a profit, and you've failed to answer me every time.....simply telling me it's going to make a profit doesn't make it so......and i've looked at the congressional plan and what i've read doesn't tell me profits are anything to hope for in the next decade or 2 at which point inflation would have already made said "profit" meaningless.

If inflation is at 3%, the profits would not be meaningless at all. How is "buy low, sell high" not an answer? The mortgage-backed securities the Treasury proposes to buy from crippled banks have been so beaten down in price that taxpayers could profit once the market for these securities — now virtually nonexistent — loosens. The 1994 bailout of the Mexican peso returned a profit, of more immediate relevance, the government's takeover of stricken insurance company American International Group already might have produced a paper profit, and could produce more gains as AIG's asset portfolio is sold off or recovers its value. Warren Buffet said if he had the money he'd bail-out the market with these prices because it's a solid investment for a good return.

[PunkRocks]

By voting down the proposed $700 billion financial bailout package — and causing a spectacular stock market rout — a majority of members in the House of Representatives made a clear statement that they didn't want to put taxpayers on the hook for the failures of financial institutions.

[Jason Tate]

Interesting of him to say that, because so far the FDIC has done two things:

1) Uphold their promises of insurance to the clients of the local and regional banks that have failed so far

2) Broker a deal between Citi and Wachovia to keep Wachovia from going under, thus putting the burden of debt on Citi instead of on the taxpayers.
To get Citigroup to absorb Wachovia, the FDIC agreed to share the risk on a $312 billion portfolio of loans (Citi has to eat the first $42 billion in potential losses; anything above that hits the FDIC fund).

[Jason Tate]

By voting down the proposed $700 billion financial bailout package — and causing a spectacular stock market rout — a majority of members in the House of Representatives made a clear statement that they didn't want to put taxpayers on the hook for the failures of financial institutions.
From the article I just posted ... where it's followed with ... "But there's a catch: taxpayers are already on the hook."

[PunkRocks]

To get Citigroup to absorb Wachovia, the FDIC agreed to share the risk on a $312 billion portfolio of loans (Citi has to eat the first $42 billion in potential losses; anything above that hits the FDIC fund).

Had Wachovia gone under, the FDIC would be facing a large absorption of debt anyway. They brokered that deal in what will mostly likely be a successful effort to avoid covering for Wachovia had it failed.

Furthermore, if this acquisition holds steady, the FDIC will greatly benefit from over $12b in preferred stocks and warrants what was negotiated as part of the deal.

[PunkRocks]

From the article I just posted ... where it's followed with ... "But there's a catch: taxpayers are already on the hook."

I was just quoting what you left out...

[oldwirehands]

For the people? Their actions today will hurt the people in ways I don't think many even realize. Credit is about to dry up, small businesses are going to go under, and unemployment is going to continue to rise. Look for 6.5% later this week.

The current bill protected the taxpayers and the confidence it would instill into the market is absolutely vital.

You gotta break some eggs to make an omelet? Probably a really bad analogy. Sorry dude but I just think more time needs to be put into making a much better recovery plan.

[open mind]

I'm not being a drama queen, I just know what is at stake here. I've looked at the numbers, I am smart enough to figure it out. And you're never going to get a "perfect one" - you're going to get "good enough." This current bailout was definitely good enough. It passed the mustard for what needed to be done, protected taxpayers, had oversight, and had limitations. Doing nothing is worse..
i know what's at stake here to, which is why i've said i'm not totally against a bailout, just so long as it's done right.....and i feel like you're acting like i'm totally against a bailout hence the drama queen comment.


I don't think you realize what this will do to everyone, it's not just about investments. And I really, really don't think you know what another depression will be like. And if that does hit -- the general public will have absolutely zero financial power. And we can't just shore up a "New Deal" to fix it this time..

i know what this will do, depressions are horrible, horrible, events........but so is giving unelected greedy fucks what amounts to unchecked financial power on the taxpayers dime. the general public would lose financial power in the event of a depression, but not permanently as the bailout is currently structured seems to be setting up.

If inflation is at 3%, the profits would not be meaningless at all. How is "buy low, sell high" not an answer? The mortgage-backed securities the Treasury proposes to buy from crippled banks have been so beaten down in price that taxpayers could profit once the market for these securities — now virtually nonexistent — loosens. The 1994 bailout of the Mexican peso returned a profit, of more immediate relevance, the government's takeover of stricken insurance company American International Group already might have produced a paper profit, and could produce more gains as AIG's asset portfolio is sold off or recovers its value. Warren Buffet said if he had the money he'd bail-out the market with these prices because it's a solid investment for a good return.

IF is the key word, and there's no reason to believe that inflation is going to be at 3% for long when the government is flooding the market with our dollar for bailouts.
the bailout plan as currently structured does not "buy low, sell high" it states that the government can't pay more for what they're buying then it was originally purchased for.........which means they can't pay higher then companies paid at the height of an artificially inflated bubble.....which isn't buying low.

[Jason Tate]

You gotta break some eggs to make an omelet? Probably a really bad analogy. Sorry dude but I just think more time needs to be put into making a much better recovery plan.
Do you not think if there was a "better" plan it would have already been proposed? There's a reason economists and investors are saying this needs to happen - now. We no longer have the luxury of time.

[Jason Tate]

I was just quoting what you left out...
I provided the link to the article - I didn't "leave out" anything. I'm not going to post the entire article of every thing I post in these threads.

[open mind]

Do you not think if there was a "better" plan it would have already been proposed? There's a reason economists are saying this needs to happen.

there is also a reason why many economists have said we shouldn't rush this.

[Jason Tate]

Had Wachovia gone under, the FDIC would be facing a large absorption of debt anyway. They brokered that deal in what will mostly likely be a successful effort to avoid covering for Wachovia had it failed.

Furthermore, if this acquisition holds steady, the FDIC will greatly benefit from over $12b in preferred stocks and warrants what was negotiated as part of the deal.
Missing the entire point here, I know why they did it, and that it was a good move; however, it doesn't change the reason why it had to be done or the inherent risk to the taxpayer from federal programs that are trying to band-aid a problem while they wait for congress to act.

[Jason Tate]

there is also a reason why many economists have said we shouldn't rush this.
And that's why Paulson's plan was not immediately passed - and grew from 3 pages to 107 pages. The same group that said we shouldn't rush it (I posted the list earlier in this thread) are now saying it was "worth passing" and "not perfect, but needs to happen," and "livable" and "much better."

For example here is renowned economist Justin Wolfer's commentary (it was his blog I pulled the original objection letter from):

To my eye, the rewriting of Paulson’s plan this past week has been worthwhile; and the final plan, while imperfect, is a useful step forward, and a clear improvement on the original plan in terms of likely effectiveness, cost to the taxpayers, accountability, fairness, and political viability.

There is also still a lot of work to be done (http://www.nytimes.com/2008/09/29/business/29econ.html?hp) on the regulatory front; but hopefully the new administration will have the time to study the issues carefully (http://freakonomics.blogs.nytimes.com/2008/09/23/economists-on-the-bailout/), rather than redesign our financial architecture in a panic-stricken and politically-charged environment.