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House to Reconvene Thursday After Bailout Bill Fails (phone calls & emails - CRANK IT UP!)
My Fox Colorado ^ | 9/29/08

Posted on 09/29/2008 3:29:05 PM PDT by Libloather

House to Reconvene Thursday After Bailout Bill Fails
Stock Market Drops Nearly 800 Points
Last Edited: Monday, 29 Sep 2008, 3:49 PM MDT
By The Associated Press

WASHINGTON -- In a stunning vote that shocked the capital and worldwide markets, the House on Monday defeated a $700 billion emergency rescue for the nation's financial system, ignoring urgent warnings from President Bush and congressional leaders of both parties that the economy could nosedive without it. The Dow Jones industrials plunged nearly 800 points, the most ever for a single day.

Democratic and Republican leaders alike pledged to try again, though the Democrats said GOP lawmakers needed to provide more votes. Bush huddled with his economic advisers about a next step. The House was to reconvene on Thursday instead of adjourning for the year as planned.

Stocks began falling even before the 228-205 vote to reject the bill was officially announced on the House floor. The 777-point decline for the day surpassed the 721-point previous record, on the day after the Sept. 11, 2001, terror attacks, though in percentage terms it was well short of the drops on Black Monday of October 1987 and at the start of the Depression.

**SNIP**

Said Boehner, after the vote: "Americans are angry, and so are my colleagues."

(Excerpt) Read more at myfoxcolorado.com ...


TOPICS: Crime/Corruption; Extended News; Government; News/Current Events
KEYWORDS: 110th; bailout; crapsandwich; house; thursday
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To: Libloather

I don’t think you understand what the plan was intended to do.


61 posted on 09/29/2008 7:06:13 PM PDT by Petronski (Please pray for the success of McCain and Palin. Every day, whenever you pray.)
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To: Petronski
I don’t think you understand what the plan was intended to do.

Section I, short title, of the bailout bill: "Emergency Economic Stabilization Act of 2008, Section 2, Purposes: Provides authority to the Treasury Secretary to restore liquidity and stability to the US financial system and to ensure the economic well-being of Americans."

Does that include individual bankruptcies? Maybe so...

62 posted on 09/29/2008 7:12:46 PM PDT by Libloather (September is Liberal Awareness Month.)
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To: Petronski

This bill is not perfect. But the situation requires that something be done. The unwinding of the associated derivatives will completely shut down the economy. Credit will come to a complete halt and commerce will cease. I am in no way a pro-government intervention type, but they created this mess (CRA) and the damage that will be done if not fixed will darf anything any terrorist organization could ever do.


63 posted on 09/29/2008 7:17:35 PM PDT by Wyatt's Torch (I can explain it to you. I can't understand it for you.)
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To: Wyatt's Torch
Credit will come to a complete halt and commerce will cease.

95% of mortgages are being paid and most banks are offering credit. Where do you get your information?

64 posted on 09/29/2008 7:25:14 PM PDT by Libloather (September is Liberal Awareness Month.)
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To: Libloather

Oh good grief.


65 posted on 09/29/2008 7:31:06 PM PDT by Petronski (Please pray for the success of McCain and Palin. Every day, whenever you pray.)
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To: Wyatt's Torch
The unwinding of the associated derivatives will completely shut down the economy

Bread and soup lines baby! I'm tailgating with a can of beans, 3-days of beard stubble, ripped clothes, a plaid blankie on top of a stick with my belongings in it!!! Just like a Tex Avery cartoon...

66 posted on 09/29/2008 7:35:30 PM PDT by Extremely Extreme Extremist
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To: Libloather
It's not about mortgages being paid on time. It's about banks and other lending institutions lending new money. Small businesses, existing businesses with credit lines, HELOC's, car loans, etc. These guys have already started to choke off lending. If these derivatives are allowed to unwind and hundreds of billions of losses have to be absorbed by the market (read, you and me and anyone who owns any type of investment instrument) they will tighten lending further still. Companies will fail. People will lose jobs.

Again, I am not a pro-government guy. My screen name should tell you that. I truly feel this is an issue of economic/national survival. We need to get something passed...very few Republicans in Congress disagree with that...let's make it as good and as clean as possible.

Here's Ben Stein on the issue of CDS derivatives:

According to what I hear from my betters in the world of finance, the most serious problems are not with the bundles of subprime mortgages themselves — a large but not lethal quantum as far as I can tell — but with derivatives contracts tied to subprime and other dicey debt. These contracts are superficially an attempt to “insure” against risks of default, hence the name “credit-default swaps.” In fact, they are an immense wager — which anyone with lots of money or borrowing ability can enter — about how mortgage-backed bonds, leveraged loan bonds, student loan bonds, credit card bonds and the like will perform.

These wagers entail amounts many times larger than the total of subprime loans. In fact, there are roughly $62 trillion in credit-default swap derivatives out there, compared with about $1 trillion of subprime mortgages. These derivatives are “weapons of financial mass destruction,” in the prophetic words of Warren E. Buffett. (Apparently believing that the worst is over, at least for one big investment bank, Mr. Buffett is now investing in Goldman Sachs.)

He proposes to simply annul the CDS's existing today. Interesting idea. Not sure the feasibility.

67 posted on 09/29/2008 7:37:50 PM PDT by Wyatt's Torch (I can explain it to you. I can't understand it for you.)
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To: Petronski
Oh good grief.

I know. Next time, read the bill.

68 posted on 09/29/2008 7:54:27 PM PDT by Libloather (September is Liberal Awareness Month.)
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To: Wyatt's Torch

From a yahoo FAQ page:

“At Investorwords.com, we learned that when you invest in a derivative, the underlying asset is usually a commodity, bond, stock, or currency. You “bet” that the value derived from the underlying asset will increase or decrease by a certain amount within a certain fixed period of time.”

Seems like derivatives are too big a share of the financial markets? So what happens to prevent more problems?


69 posted on 09/29/2008 7:59:04 PM PDT by Patriotic1 (Dic mihi solum facta, domina - Just the facts, ma'am)
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To: Michelle Chadwick

ping


70 posted on 09/29/2008 8:09:29 PM PDT by sweetiepiezer
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To: Wyatt's Torch

Wyatt: it is time to let Atlas Shrug. Ayn would have enough balls to let it happen. Buck up.


71 posted on 09/29/2008 8:16:47 PM PDT by Captain Kirk
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To: Wyatt's Torch
Here's Ben Stein...

Who? Other than his own 401k, what else does he run again?

72 posted on 09/29/2008 8:31:55 PM PDT by Libloather (September is Liberal Awareness Month.)
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To: Libloather

Not only did I read it, I understood it.


73 posted on 09/30/2008 3:37:36 AM PDT by Petronski (Please pray for the success of McCain and Palin. Every day, whenever you pray.)
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To: Patriotic1

Certain derivatives serve a very useful purpose as hedges. Many, many companies use hedging strategies to offset wild swings in input costs. for example, FedEx and UPS use fuel hedges to partially offset the increase in the cost of fuel. Companies use FX hedges all the time to stabilize international operations costs. In concept, the Credit Default Swaps were used to offset the risk posed by questionable loans. Unfortunately the leverage ration got way out of whack. I am not an expert on derivatives by any means but common sense would tell me that the leverage ratios allowed should be within certain limits so as to mitigate the potential risk should the underlying assets lose too much value. That can be managed by FASB and GAAP.


74 posted on 09/30/2008 10:05:58 AM PDT by Wyatt's Torch (I can explain it to you. I can't understand it for you.)
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To: Libloather

Wow, must be really pressing if they take 2 days off of this so called “crisis.”

The Republicans need to wise up and so does Bush. Paulson is a snake along with all of the Dems. We need to pin this whole problem on the Democrats the rest of the way until the election.


75 posted on 09/30/2008 10:08:38 AM PDT by truthandlife ("Some trust in chariots and some in horses, but we trust in the name of the LORD our God." (Ps 20:7))
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