$700 Billion Bailout bill fails to pass - Dow down 700 points
In an unfortunate symmetry of events the Dow swooned more than 700 points as the $700 billion bailout bill failed to pass in the House of Representatives. There were rumors that trading on the NYSE would be halted due to preset triggers for preventing a stock market collapse. Analysts and market watchers were stunned at the outcome with most expecting the bill to pass given all the haggling last week and comments made by senate and house leaders yesterday. As the WSJ summarized the issue "A bipartisan group of U.S. House lawmakers defeated a $700 billion rescue plan [228 - 205] rejecting pleas from the Bush administration and congressional leaders from both parties of the potential dire consequences of policy makers not acting to help financial markets"
The Republicans were the ones that rejected the bill, sending the message to financial markets that they'll have to solve their problems on their own, without $700 billion of taxpayer money. Or as a Maketwatch head line said : "House to Wall Street: Drop dead". So much for John McCain coming into to help getting the bill passed. I am sure there will be a lot of back door discussions happening right now, trying to amend the bill and get it through again is some form. In the meantime TRILLIONS of dollars are being wiped away from stock markets and investment portfolios around the world. Global markets fell by 1-2% on average overnight and if today's Dow and Nasdaq action is any guide, we could see 10% plus falls tomorrow. What's got me really spooked today is the string of collapses of big banks around the world suggesting that the crisis is only starting in global terms. If this spreads to India and China, their growth could be severely curtailed sending the entire world into a long/deep recessions. Cash is king right now and you better ensure you are adequately protected
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September 29, 2008 3:23 PM
I am proud to be a free market American!
September 29, 2008 5:28 PM
The Democrats control the house, yet 40 percent voted against the bill. This was a failure of the Democratic leadership to rally their own party.
That said, I'm glad it failed. This was a bad idea. Let the market crash so we can start rebuilding the economy today, rather than delaying and draging down the market over the next decade.
September 29, 2008 5:29 PM
It is interesting to see how most business owners are angry about this bill. Would a small business owner get bailed out by the government?
Sincerely,
Ilya Bodner
Small Business Owner
Initial Underwriting
September 29, 2008 7:31 PM
Such foolishness. No bill is better than a bad bill.
We should have had a much stronger recession in 2001-02. This would have helped to clean out the system...like recessions are wont to do. However, Uncle Greenspan wouldn't let that happen; he gave us another bubble called real estate.
If you own dividend paying stocks, you're probably cheering, your DRIPs will buy more.
If you bought GOOG earlier (I can't imagine why) this year, you're sobbing.
Bring on the recession; it will clean up a lot of excess.
September 30, 2008 6:38 PM
Anon - Okay. Glad you are, though think the link to the bailout bill decision is a bit tenuous.
Curt - I blame it on Nancy Pelosi. She should have kept quite cause she annoyed alot of the house reps. Looks like the bill will go to vote again this week and my bet is that it will get through.
Anon # 2- You've got a point there. But if the big business' go out of business then the small busineses are next. Credit is already getting tight I hear.
sb - Good to have you back commentating. See my response to Curt above. The bill will also address the crisis of confidence in markets now, not necessarily the crisis itself. I think the recession will come, the question is how serious? I agree that the excesses need to be cleared for long term reform to take place
October 3, 2008 3:29 PM
Update (Oct 3) Bailout passes House 263-171, reversing a previous decision. The Senate passed the bill a few days ago after adding various tax provisions. President Bush immediately signed the bill into law. The markets have barely reacted, infact going down after the bill was passed. Now what....
January 9, 2009 10:54 AM
I am very disappointed in the handling of the bailout money that has occurred thus far. i would have expected tremendous over sight. But, Paulson seems to have dropped the ball on this.
Maybe i am wrong. Maybe he dolled out the money the right way. On the surface though it seems to have been one big giant giveaway.