Monday, September 29, 2008

The Bailout Plan: Failed, widespread economic calamity expected

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The House of Representatives voted 228-205 on Monday to reject a $700 billion package to bail out the battered financial industry. Earlier, President Bush had urged Congress to act quickly to pass the measure. He was described as "very disappointed" by a spokesman, Tony Fratto, after the vote.
Fear swept the financial markets after the vote and resulted in the worst single-day drop in two decades, nearly nine percent. The Standard & Poor's 500-stock index fell 8.77 percent, its biggest drop since October 1987. A trader, left, looked at the numbers on a board at the New York Stock Exchange.

John Boehner, the Republican minority leader, called the measure "a mud sandwich" but urged members to reflect on the damage that a defeat of the measure would mean "to your friends, your neighbors, your constituents" as they might watch their retirement savings "shrivel up to zero."
Sixty-five Republicans joined 140 Democrats in voting for the measure, while 133 Republicans and 95 Democrats voted against it. "The legislation has failed," Speaker of the House Nancy Pelosi said at a news conference after the vote. Some Republicans seemed to blame Pelosi's speech from the floor, which attacked Bush's economic policies, for the defeat.

Defying President Bush and the leaders of both parties, rank-and-file lawmakers in the House on Monday rejected a $700 billion economic rescue plan in a revolt that rocked the Capitol, sent markets plunging and left top lawmakers groping for a resolution. Home Page
House Rejects Bailout Package, 228-205; Stocks Plunge - New York ... Monday afternoon after the financial bailout package failed to ... began voting on a $700 billion American bailout plan ...
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Video | AlterNet
... bail out the staggering financial industry. Stocks started plummeting on Wall Street even before 228-205 ... voted down the proposed bipartisan bailout package: The vote failed ... bailout plan ...
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Jackson Free Press | News, Opinions, Music, Events and Dining ...
CNN is reporting the bailout plan went down in the U.S. House of Representatives by a 228-205 vote. Mississippi Reps. Chip Pickering voted for it; ... the Debate » McCain’s ‘Failed ...
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Fouroboros: 02/01/2004 - 03/01/2004
The win leaves Republicans with a 228-205 majority in the ... domestic issues, as a devout Christian he tried and failed ... I have never voted for a Democratic president or a ...
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The Krach of 1882 and the Bourse de Paris
... while it recapitalized its common fund for handling failed ... On August 23, the General Assembly had voted to pay out 1 ... His plans also had a very strong political agenda.
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House ignores Bush, rejects $700B bailout bill
Stocks plummeted on Wall Street, beginning their plunge even before the 228-205 ... The legislation may have failed; the crisis is still with us," said House Speaker ... police and is OK Warning on lead fallout at gun clubs Stocks tumble as bailout plan fails ...
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Source: San Francisco Gate
NewsDateTime: 9 hours ago

U.S. bailout failure sends markets reeling
The House of Representatives voted 228-205 against a compromise bailout plan that would have allowed the Treasury Department to buy ... McCain, a Republican who suspended his campaign last week in a failed attempt to broker a bailout deal, called on ...
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Source: MSN UK News
NewsDateTime: 1 hour ago

Most Texans in House voted `no' to the bailout
... bailout for the nation's financial system that failed in the House, sending stock markets plunging. Only nine of the state's House members, five Democrats and four Republicans, voted for the rescue in the 228-205 ... voted for the rescue in the 228-205 ... plan ...
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Source: Houston Chronicle
NewsDateTime: 5 hours ago

At-risk lawmakers vote 'no' on $700B bailout
The 228-205 rejection of the $700 billion rescue package for ... limit on compensation packages for executives of the failed companies that would participate in the bailout. ... Some of those who voted for the bailout said they did so in possible conflict ...
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Source: Chicago Tribune
NewsDateTime: 6 hours ago

Lawmakers quickly point fingers after bailout fails
... congressional leadership as well as President Bush, failed in the House by a vote of 228-205. See roll call of how House members voted ... President Bush was "disappointed" that the House failed to pass the bailout, saying, "we put forward a plan that ...
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Source: CNN
NewsDateTime: 5 hours ago

n Sunday evening, the House Republican working group, which stringently opposed earlier drafts of the plan and offered a counterproposal, indicated it would support the bill, and its members are encouraging other Republicans in the House to do the same. "Nobody wants to have to support this bill, but it's a bill that we believe will avert the crisis that's out there," House Minority Leader John Boehner, R-Ohio, told reporters. But the bill did draw some opposition during the morning debate. Rep. John Culberson, R-Texas, said the measure would leave a huge burden on taxpayers. "This legislation is giving us a choice between bankrupting our children and bankrupting a few of these big financial institutions on Wall Street that made bad decisions," he said. Other conservative Republicans argued the bill would be a blow against economic freedom. Thaddeus McCotter, R-Mich., said the bill posed a choice between the loss of prosperity in the short term or economic freedom in the long term. He said once the federal government enters the financial market place, it will not leave. "The choice is stark," he said. But there were also Democrats who opposed the bill for not doing enough to help those who taxpayers facing foreclosure or needing unemployment benefits extended, or taxing Wall Street to pay for the rescue package. "Like the Iraq war and patriot act, this bill is fueled by fear and haste," said Lloyd Doggett, D-Texas. The crisis and a proposed fix Banks and Wall Street firms, worried about both their own needs for cash and the condition of other institutions, essentially stopped loaning money to one another in recent weeks. That choked off the money being made available on Main Street in the form of mortgage loans, business loans and other consumer borrowing. The crisis stems from problems in mortgage-backed securities, which saw their value plunge as home prices have gone into their worst slide since the Great Depression and foreclosures have soared to record levels. In turn, the market for trillion of dollars worth of those securities held by major firms evaporated, sending them down to fire sale prices and raising the risk of widespread failures among the nation's major financial firms. Under the plan, Treasury will buy the mortgage backed securities, either directly from the firms or through an auction process. It may also arrange to provide guarantees for the securities up to their original values in return for premiums they would charge current holders of the securities. To make the legislation more politically palatable, the bill calls for the government, as an owner of a large number of mortgage securities, to exert influence on loan servicers to modify more troubled loans to help prevent additional foreclosures. It also provides that the government will take equity in the firms that sell the securities to the government, and limits pay packages for top executives. The legislation comes amid great upheaval in the nation's financial system. On Monday morning, the Federal Deposit Insurance Corp., which insures deposits at failed banks, arranged for the sale of the banking assets of Wachovia (WB, Fortune 500), the nation's No. 4 bank holding company, to Citigroup (C, Fortune 500) for $2.2 billion in stock. That follows three weeks of other shocks: the Treasury Department's seizure of mortgage finance firms Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500); Wall Street firm Lehman Brothers' bankruptcy filing; rival Merrill Lynch (MER, Fortune 500) purchase by Bank of America (BAC, Fortune 500). In addition, the Fed bailed out insurance giant American International Group (AIG, Fortune 500), loaning it $85 billion in return for a nearly 80% stake. while Washington Mutual (WM, Fortune 500), the nation's largest savings and loan, became the largest bank failure in history.

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