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      09-29-2008, 01:17 PM   #1
gum5h03
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Bailout Fails House!

Let the chaos begin.

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House Votes Down Bill To Bail Out Financial Markets

Defeated by skeptics from both parties who questioned the need for it and whether it would work, the bailout plan was proposed by the Bush administration on Sept. 20.

Congress modified it in just days amid warnings from the White House that urgent action was needed to prevent economic disaster.

Stocks plunged as soon as it became apparent that the bill was unlikely to pass. The Dow Jones Industrial Average fell as much as 700 points before paring those losses.

Congressional leaders had predicted a close vote. The White House Monday said President Bush strongly supported the legislation.

Read the Entire Bailout Bill. Click Here
Bush said taxpayers will benefit from a number of safeguards that lawmakers wrote into the pending legislation during weekend negotiations on Capitol Hill, including checks and balances on the operation of the program.

The president spoke shortly after two leading players in the Hill bargaining went on television news shows to urge passage, even as both acknowledged the necessity of this action represents a sad day for the nation.


But the Connecticut senator, chairman of the Banking Committee, also said the bill is not a panacea for all the problems that have bedeviled the U.S. financial markets.

He also said, though, that failure to act would spread the contagion of frozen credit markets even further.

"This is not just about Wall Street," Dodd said. He said that it's "potentially going to hurt other people across the country."

Sen. Judd Gregg, R-N.H., who represented fellow Republicans in the weekend talks, called it a "tourniquet" for the ailing financial industry and slow-moving economy.

The latest assessments of prospects for passage came as investors worldwide and in early trading in the United States continued to show doubt about whether the bill would go through, much less go a long way toward curing the systemic problems that have unnerved financial markets across the globe for weeks.


"A rescue plan worth $700 billion is simply not enough to overcome the crisis for the foreseeable future. If anything, all the real economy problems will escalate as a result in the foreseeable future," said Carsten Klude, strategist at MM Warburg.

The House was slated to vote later Monday on the deeply unpopular rescue package for the stressed financial industry. Bush on Sunday conceded this was a difficult vote in an election year -- and repeated that sentiment in his statement Monday morning.

But he called a vote for the bill "a vote to prevent economic damage" to communities across the country.

He also said the legislation addresses the root cause of the problem -- "assets related to home mortgages that have lost value during the housing decline."


And the president noted that under provisions of the pending bill, "the federal government will be authorized to purchase these assets" and said that will help financial institutions to resume lending to individuals and businesses.

"I know many Americans are worried about the cost of the bill," Bush said. But he also said the nonpartisan Congressional Budget Office and the federal Office of Management and Budget expect that the "ultimate cost to the taxpayer" will be much less.

But it was still unclear whether the bill would win approval, and whether it was the right solution for the problem.

"Passage of the plan is just step one. Step two is execution, and there remains considerable uncertainty about how assets will be purchased," said Michael Pond, a bond strategist with Barclays Capital in New York.

-The Associated Press and Reuters contributed to this report
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      09-29-2008, 01:33 PM   #2
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so now what?
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      09-29-2008, 01:56 PM   #3
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      09-29-2008, 02:55 PM   #4
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Many many people are not trusting of the current administration and view this as their last in line of screwing the people before leaving office. Instead of Bush coming in and telling people that all would be ok after passing this bill, he isntead came out with his well-known scare tactics. People have seen it before, and they know that Bush used those tactics to get us in and keep us in Iraq - look how that has turned out.

As well, from the sound of things we're going to go into a recession regardless of this bill or not. This bill would just pay execs a whole lot of our money as well as to compaines owned out of other countries. The American people feel they're going to get screwed either way, so why take $700,000,000,000.00 of our hard earned money away frmo us and THEN hit us with recession. We'll need it at that point.

Idealy I'd like to see a smaller number, say $150B used to structure the banks/economy as best as they can - let the execs fail and get nothing. It was their own fault. Also let the people facing foreclosure hit foreclosure. Also their fault for taking out a loan they couldn't really afford. I'm not in either boat, but I'll be hit either way. I don't think I should bare an additional $4,500.00 of my tax money to failed execs and unsmart money borrowers.
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      09-29-2008, 02:58 PM   #5
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Many House members who voted for the bill held their noses, figuratively speaking, as they did so. Representative John A. Boehner of Ohio, the Republican minority leader, said there was too much at stake not to support it. He urged members to reflect on the damage that a defeat of the measure could mean “to your friends, your neighbors, your constituents” as they might watch their retirement savings “shrivel up to zero.”
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      09-29-2008, 03:26 PM   #6
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Quote:
Originally Posted by Spec 1 View Post
Many many people are not trusting of the current administration and view this as their last in line of screwing the people before leaving office. Instead of Bush coming in and telling people that all would be ok after passing this bill, he isntead came out with his well-known scare tactics. People have seen it before, and they know that Bush used those tactics to get us in and keep us in Iraq - look how that has turned out.

As well, from the sound of things we're going to go into a recession regardless of this bill or not. This bill would just pay execs a whole lot of our money as well as to compaines owned out of other countries. The American people feel they're going to get screwed either way, so why take $700,000,000,000.00 of our hard earned money away frmo us and THEN hit us with recession. We'll need it at that point.

Idealy I'd like to see a smaller number, say $150B used to structure the banks/economy as best as they can - let the execs fail and get nothing. It was their own fault. Also let the people facing foreclosure hit foreclosure. Also their fault for taking out a loan they couldn't really afford. I'm not in either boat, but I'll be hit either way. I don't think I should bare an additional $4,500.00 of my tax money to failed execs and unsmart money borrowers.
+1 on the scare tactics. There is no corroborated evidence that this will even help at all (other than the acquiring banks of course).
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      09-29-2008, 03:30 PM   #7
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We could be looking at some other fixes. Not enough discussion of re-cap of the banks in exchange for equity (common or preferred) upside for taxpayers as offset.

Buying toxic assets and re-setting marks does not effect a re-cap which is what the banks desperately need.

A whole lot more banks are going down. The FDIC will need an injection of funds to address this into 2009.
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