Bailout vote

[VABills]

So you dont understand it, but you know its the Dems fault?

 

Nice analysis. When did stuckincincy get a hold of your login?

Maybe they should be less political like you and try to explain and sell it.

[KD in CA]

Things I learned from reading this thread:

 

#1 -- 133 Republicans voting against the measure killed it. 95 Democrats voting against it had absolutely no effect on the outcome and equals Pelosi "delivering her caucus".

 

#2 -- With one of the most contentious and important votes in the history of the Congress moments away, the Speaker, knowing that her legislation would fail without the support of 40% of the other party, decides this is the appropriate time to issue a blistering partisan attack against that party and its leadership. Of course, that should have no impact on anyone's mind set and be dismissed as a contributing factor to the defeat of the legislation.

 

And regardless of how much impact it may or may not have had on the vote, the lack of people calling her out for an incredibly stupid and juvenile act is pathetic. Scores of high level people bust their ass to put this legislation together, get concessions and agreements from several quarters to get it done and this fugging bimbo can't resist her moment in the sun to blather her mindless GOP BAD! nonsense?? Good grief. People worry about Palin a heartbeat away? Where is the fear that this lunatic is only two heartbeats away?

 

 

Anyway, there were several reasons for the failure, but the most important is the most basic. Politicians' first priority is always self preservation, regardless of party:

 

Republicans facing tough re-election challenges deserted their leaders in droves. Thirty-two of 37 Republicans listed as endangered by the non-partisan Cook Political Report voted no, compared with 18 of 29 Democrats in the same category.

 

In addition, members of both parties from poor or minority neighborhoods voted against it. This was largely the result of a failure by the leadership of both parties to explain the bill (and/or to override the spread of ignorance by the MSM) to the general population, who were largely against the legislation.

[colin]

The upswing is due to the possibility that the bill will pass in some form.

 

true (well it seems that way) but how different will it be?

 

the fed is picking up a ton of slack, but question still remains: exactly what happens to who if the bill doesn't pass? i don't think there is much certainty here on either side.

[GG]

true (well it seems that way) but how different will it be?

 

the fed is picking up a ton of slack, but question still remains: exactly what happens to who if the bill doesn't pass? i don't think there is much certainty here on either side.

 

There is no certainty, but as banks and other financial institutions continue to sit on their cash, many businesses will either pay a lot more for credit or won't be able to get credit. Margins will get squeezed, layoffs will follow, demand will drop, bankruptcies will rise. Repeat the process. Chances of this happening without some kind of intervention in the financials are much higher than nothing happening and things returning to normal.

[DC Tom]

How do you know that? What Board in their right mind would replace a new CEO that saved their company and brought it back to profitable?

 

Most of them. Turning around companies and managing them as going concerns are two different skll sets. It's quite possible that the guy that turns the company around is in no way capable of managing the company otherwise.

[colin]

but then the question is how much will the problem be corrected in the long term, vs reflation?

 

and what if the bailout isn't enough, what if there are still failures, and how much liquidity is being crowded out (including assests that the gov is willing to buy under the bailout) that will find its way even without the bailout?

 

it seems from where i am sitting the bailout will help, but i'm on wall street and talking my book.

 

if i'm a regular guy who lost money or an entire house, have some 401k that i don't need for a while, have reasonable certainty that my credit cards will work and that my cash in the bank is ok, i don't see how the bailout benefits me as much as wall street.

[Wacka]

I'm rewording my question from last week that didn't get answered then.

 

If it was so good a plan , why didn't it pass with just the dem votes????

 

The dems can pass any legislation (excepty treaty ratifications in the Senate and veto overrides) without any republicans voting at all.

[GG]

but then the question is how much will the problem be corrected in the long term, vs reflation?

 

and what if the bailout isn't enough, what if there are still failures, and how much liquidity is being crowded out (including assests that the gov is willing to buy under the bailout) that will find its way even without the bailout?

 

it seems from where i am sitting the bailout will help, but i'm on wall street and talking my book.

 

if i'm a regular guy who lost money or an entire house, have some 401k that i don't need for a while, have reasonable certainty that my credit cards will work and that my cash in the bank is ok, i don't see how the bailout benefits me as much as wall street.

 

The bailout, essentially is an efficient way to create a super good bank/bank bank structure among the US financials. This would be the fastest way to return the capital markets back to business. The advantage that the government has is time and can sit on the mortgage paper until the markets stabilize. Another way this could be fixed is by eliminating mark to market accounting. But that is a far worse long term outcome, even though it won't require the large initial capital outlay.

 

It's not a certainty that the bailout will prevent future failures. But it should at least prime the pump of the private equity money machine to get back into the market. They have a lot of money to invest, but no one will put a dime in after seeing TPG lose $7 bn in six months in WaMu.

 

Even without the bailout, FDIC is on the hook for a lot of guarantees, and the government is on the hook for up to $500 bn in exposure to Wachovia. Chances are the losses won't be anywhere near that amount, but neither will the losses be $700 bn on the bailout.

 

As for the regular guy, how much certainty can he have about his credit cards, when the market is about to tank. How does a 50% interest rate on credit cards sound? The cash in the bank is ok, as long as you believe the FDIC is there to back you up. But as the banks continue to fail, the only option to FDIC is to ask Fed for more money, which leads them to print ever more money in the face of a severe recession.

 

But hey, I heard that the bailout package will ruin the country and cause hyperinflation.

[colin]

i'm well aware of what the bailout (most recent one that failed anyhow) contains, but the results if it does or does not pass are not clear, and everyone who is close to the issue is close to the issue -- they have a lot of interest in one result.

 

no matter what i'm fairly certain something will happen, but there could be an extention of the fed's backstop for the fdic, or just a bunch of pumping by the fed. there are lots of ways this could happen, but congress will have to be sold on whatever way will happen.

 

the moral hazard is there too.

[RayFinkle]

the mkt is reversing (about 35% or so) the moves from yesterday. perhaps the bill isn't as important as it is being made out to be.

perhaps dinosaurs walked the earth 6,000 years ago.

[X. Benedict]

Things I learned from reading this thread:

 

#1 -- 133 Republicans voting against the measure killed it. 95 Democrats voting against it had absolutely no effect on the outcome and equals Pelosi "delivering her caucus".

 

#2 -- With one of the most contentious and important votes in the history of the Congress moments away, the Speaker, knowing that her legislation would fail without the support of 40% of the other party, decides this is the appropriate time to issue a blistering partisan attack against that party and its leadership. Of course, that should have no impact on anyone's mind set and be dismissed as a contributing factor to the defeat of the legislation.

 

And regardless of how much impact it may or may not have had on the vote, the lack of people calling her out for an incredibly stupid and juvenile act is pathetic. Scores of high level people bust their ass to put this legislation together, get concessions and agreements from several quarters to get it done and this fugging bimbo can't resist her moment in the sun to blather her mindless GOP BAD! nonsense?? Good grief. People worry about Palin a heartbeat away? Where is the fear that this lunatic is only two heartbeats away?

 

 

Anyway, there were several reasons for the failure, but the most important is the most basic. Politicians' first priority is always self preservation, regardless of party:

 

 

 

In addition, members of both parties from poor or minority neighborhoods voted against it. This was largely the result of a failure by the leadership of both parties to explain the bill (and/or to override the spread of ignorance by the MSM) to the general population, who were largely against the legislation.

Seriously, you read the Pelosi speech?

 

The only tangent mention of House Republicans was this:

 

"Today we must act for those Americans, for Main Street, and we must act now, with the bipartisan spirit of cooperation which allowed us to fashion this legislation."

 

Blaming Pelosi is as cowardly as it comes. But during a tough vote it might be natural to find what political cover you can before leadership threatens to put you on the Commitee of Natural Resources next Congress.

[Ramius]

Maybe they should be less political like you and try to explain and sell it.

 

Both sides had plenty of "no" votes for it. Its both sides fault for it not passing. I'm simply trying to figure out how you, who admittedly dont understand anything about it, has enough knowledge to determine that the democrats are solely at fault for it.

[VABills]

Both sides had plenty of "no" votes for it. Its both sides fault for it not passing. I'm simply trying to figure out how you, who admittedly dont understand anything about it, has enough knowledge to determine that the democrats are solely at fault for it.

Not the democrats. the democrat leadership.

 

There is a difference.

[PastaJoe]

Not the democrats. the democrat leadership.

 

There is a difference.

 

The Democrat leadership got a majority of their party to vote for it. The Republican leadership and Bush couldn't get even half, yet it's the Democrat leadership that was the problem.

[KD in CA]

Seriously, you read the Pelosi speech?

 

The only tangent mention of House Republicans was this:

 

"Today we must act for those Americans, for Main Street, and we must act now, with the bipartisan spirit of cooperation which allowed us to fashion this legislation."

 

Blaming Pelosi is as cowardly as it comes. But during a tough vote it might be natural to find what political cover you can before leadership threatens to put you on the Commitee of Natural Resources next Congress.

 

No one could be as cowardly as Pelosi. She ran for political cover BEFORE THE VOTE! And House Republicans don't exist in a vacuum from the rest of the party, so cherry picking her statement is a weak attempt to excuse her idiotic behavior.

 

I don't believe her statements made the difference, but that shouldn't excuse the fact that she is an abysmal leader, and this is a bad time for bad leaders, in the WH and in Congress.

[VABills]

The Democrat leadership got a majority of their party to vote for it. The Republican leadership and Bush couldn't get even half, yet it's the Democrat leadership that was the problem.

They got 60%. That isn't even passing in school.

 

If they are so good why couldn't they get more. 2/3rds would have given them 14 more votes and passage.

[X. Benedict]

No one could be as cowardly as Pelosi. She ran for political cover BEFORE THE VOTE! And House Republicans don't exist in a vacuum from the rest of the party, so cherry picking her statement is a weak attempt to excuse her idiotic behavior.

 

I don't believe her statements made the difference, but that shouldn't excuse the fact that she is an abysmal leader, and this is a bad time for bad leaders, in the WH and in Congress.

Cherry picking? I posted the whole speech.

 

Not defending Pelosi here or the job she does...all I'm saying is that was a fairly innocuous speech - she names a pro tempe so she could give it from the floor - and takes a few knocks at Bush while praising Paulson. If there was any criticism of House Republicans - find it for me unless you are relying on some allegory.

 

Nothing unusual there. It is just smoke-screen until some Congressman admits that her speech the reason they changed a vote. Which won't happen.

[pBills]

Not the democrats. the democrat leadership.

 

There is a difference.

 

 

You have got to be kidding me. Where is the Republican leadership? Again, what did McCain do besides bring his campaign to a supposed stop and get lost on the way to DC? Nothing. Great leadership there.

 

I guess they (McCain | Palin) are to busy blaming the media and Obama. :-)

[Dwight Drane]

The next 48 hours OUTSIDE OF THE ECONOMY are crucial.

 

The chain of events for a scapegoat have taken place.

 

1) Treasury puts out a proposal that they know will rile the public up against it.

2) The real cost to bail out the economy is in the 10's of trillions at this point, and this is only after continued bank mergers to cancel out counterparty obligations. i.e. Bailout would not work without crazy inflation

3) Congress puts on a show, but votes down the bill...everyone calls for Armageddon

4) Next day the liquidity to prop markets comes in like never before, but makes enough headway to not only avoid Armageddon, but make it look as if Congress wasn't a complete failure by voting down bailout.

5) Promise to have another vote in a few days

 

#### Total Speculation#####

 

6) An event of HUGE magnitude takes place that rocks our foundation outside the economy, but can't help but sink the economy in it's fragile state. The event is so big that we can't recover short term, and the President, Congress, and Fed gets off the hook for taking down our economy over the years.

 

#####################

 

Contrary to public opinion, I don't have Jesus channeled in a Magic 8 ball. I have been "lucky" enough to be inside of the financial situation, and know that there is no logical way out. The cards that have been played over the past 2 weeks by the government puts me at a personal Code Red alert for something huge to happen. Will it happen?, I don't know. Everything can be fine for a while, but the Feds have been doing CPR for a while now while telling the family in the waiting room that Daddy is doing just fine. Why the sudden change?

 

 

Nobody believes a word I say here anyway, so I might as well go into pure speculation at this point. To quote Max Bialystock...."No Way Out!!!"

[PastaJoe]

They got 60%. That isn't even passing in school.

 

If they are so good why couldn't they get more. 2/3rds would have given them 14 more votes and passage.

 

A majority is 50% + 1. Why couldn't the Republican leadership and Bush get 14 more votes out of 133? That's only 11% of the votes against.