House votes down massive financial bailout

Iria

The House of Representatives rejected a $700 billion bailout today following extended debate where many members, including some who brokered the deal with it, was highly unpopular.

The preliminary vote was 185-197.
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Source: MSNBC

OmegaRED

It's probably for the best.

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temeteus82

Yes it is. Well at least my point of view

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OmegaRED

Truthfully, I know very little about financial markets (don't really care either) but it seems to me what would be gained in a bailout would be outweighed by what would be lost.

The market would gain some stability immediately after the bailout and investor confidence would rise but I bet it would be for a very short time. Say what you want about Wall Street but there's only a certain amount of bullshit it can swallow and I think the bailout would make things worse.

No one wants a recession or depression or any of the bad shit that might be around the corner if this turns into a major economic disaster but throwing money at it isn't going to solve this and even if it could surely it would take weeks or months of planning to devise a plan to make it work...not hours or days.

IMO, let what ever is going to happen, happen. I'm glad the House didn't betray America's capitalist ideals by passing this though I suspect they might if it's retooled in the future.

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Judas

The way it would work is that the stability gained would only prolong the oventual fall.... making it into an even disasterous crash.


But the real concern is the fact that everyone was voting not on the 700bil, but several pages of other things they weren't allowed to even review... the result was that they were preasured into voting for a helping package that could have potentially been voting in other more horrible amendments or major things that would have been much worse then not voting for it at all.

I'm somewhat happy for the result.

Either way..

Shit is hitting the fan, and they'll likely be suckered into oventually passing a bailout of some kind at which point... as another market analyst put it.... Toilet paper will be more valueable then the dollar bills being printed. The paper that the dollars are being printed on is worth more.....

IF you have $1 and you want to buy something for $1.... your dandy. But the way the system is working and actually it's not working as the evidence is mounting as things are tumbling ...... people are taking that $1 dollar and trying to buy several $1 items from multiple people at the same time.."look see, i've got this $1 here, tell you what, i'll pay you this $1 over time", it's repeated to everyone, well by the time people have gotten done, they've not realized that there $1 has been slit down and chopped up so many times, that they've barried themselves. the result, the people that "sold" or more along the lines of "loaned" the items or money out......are calling the loans on them now.... asking for that $1... you can only give one person.... that $1.. what happens to the people that also are expecting that $1? there for lack of a better word, fucked and so is the person that offered it orginally.

Imaginary money, it's worse then trying to pay with monopoly money... Your better off grabbing a permenant market and writing "$1000" on each individual tissue (kleenex) of an entire box and then trying to pay someone with it.

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CDsDontBurn

economic recession is supposed to cause deflation. had this passed, it would have cuased inflation. it's a good thing, IMO, that this didn't pass. banks should go bust because of poor lending habits.

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[hobo]eclipse

don't be hasty cd's more legislation is coming, both the stooges backed a bill, petro dribbles in the south, and the brigades start homeland tours

temeteus82

I see that you don't have no idea how big issue this is. I mean there are a lot people that will be homeless when the banks go bust and their homes will be sold. The un-employment rate will go up fast and people gets angry to the politicians because they didn't bail out the banks. And some ones will be paying the bill for the banks that goes bust and usually they are the customers that does that. I do hope that you don't have your savings on a bank that is going down.

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[hobo]eclipse

sry teme but yer wrong on that one cd's made a valid point





Senate May Try to Revive Bank-Rescue Bill as Early as Tomorrow

CDsDontBurn

not true. take Indi-Mac Bank (a smaller bank in comparison to BofA, Wells Fargo, Washington Mutual, etc.) for example, this is one of the failing banks and all current accounts are in a type of "stale-mate" per say (idk the exact term). but what's going on with this particular bank, is that people who have loans with this bank, is that they are not paying back their loans because the bank's financial system is in current turmoil. Indi-Mac Bank would be a bank that would benefit from this "bail out" bill that was denied. So, until this gets resolved, more than likely by a buy-out from another bank or this "bail-out" bill passed, banks like Indi-Mac Bank will continue to have such suspended accounts until their internal issues are resolved.

Just because banks don't get this "bail-out" passed, that doesn't mean that people will be losing jobs....unless you're a banker/real estate agent.

I'm glad that this wasn't passed because that would just mean that the national deficit would go up considerably, litterally overnight. I think that the US national deficit is already high enough as it is. something like this would just make it worse, which is something that we're paying for already with taxes already.

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temeteus82

Perhaps. But the sub prime crisis isn't over at all more banks may be busted if that new plan don't get passed. And as I said the customers are the ones that will end up paying the bill. Now since US has a large population if all would pay one dollar for the save many peoples lives would that be good? I mean peoples life's will be ruined if their savings will be gone because of this crisis...

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temeteus82

Yeah and the other banks would not give more loans to business and there fore they would have to cut their work force ... You see the chain reaction?

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CDsDontBurn

Yes I do, The official economic term for what you are describing is known as "The Trickle Down Effect." Whatever affect the top will "trickle down" to cause effects on consumers.

IMO, the best way to stimulate the economy is from the bottom up, a "Trickle Up Effect" i'd like to call it, not from the top down. Bush's stimulus bill that he gave out earlier this year was not enough to properly stimulate the economy earlier this year IMO. That was the right idea, but it was too little too late.

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[hobo]eclipse

yes with out the legislation more jobs would be lost but inflation will come under control and market will right itself

with the bill it will be a slow steady progression on same path we have been

cds the stimulas needed is the rebirth of a sound currency, no quick fixes or turn arounds

Judas

you can hand the banks a wack of cash without them running out of it instantly.. and it's already full known that 700 bil isn't even close to being enough to cover the bad loans and debt out there.... all 700 bil to the banks will do is inflate things, essentially making the without a doubt airplane that is crashing, crash harder killing millions more then it would have previously, and extending the crashes duration.

The stimulus package for a "trickle up effect" is also useless, you still making money out of this air, you can't do that, the people still can only spend it once, problem is likely to not disappear as people will likely spend it on more useless crap rather then pay of thier loans with it... and even then, if they did pay off thier loans, the banks are still royally screwed.


People are NOT comprehending the seriousness of this all. ATM the banks are sitting in stagnation for everyone, they aren't really looking at providing anymore loans, but they haven't locked thier doors either exactly. But it's coming, and it all depends on if you want to postpone it AKA flating the dollar more with bailout resulting in a even Bigger crash that last longer with more people homeless and screwed OR bite the damn bullet now and let the stock market fly apart resulting in the crash happening sooner and less of a country falling apart.

What is scary as all hell is the FACT that the US OWES major countries like japan and china and countless others basically everything the US has right now, If china alone called the loans of the US and the US can't pay (obviously because for every dollar they print up, makes the dollar that much more useless not increasing thier value at all), what do you think China could do? "Hi, oh you can't pay, well i'll just take this".... and it can be full scale, frankly china could potentially just walk right into the country a few good months after it's nation wide crashed. What would stop it? Starving homeless people going to stop an army? Yeah maybe.... lol.


The bubble everyone has been living in has popped, the only thing the government can do is either let it continue to pop at the rate it's going and get it over with quicker, or postpone/slow it down only to increase the effects of the "bad things to happen" more.

Has anyone even looked at what happened in 1929? The real facts of the matter pertaining to what happened when it went bust? Does anyone have a clue what those figures look like compared to today? 1929 was a frigen kidy crash followed by a tamptrum attack compared to what is likely 99% going to occur here, big freaking crash. The figures are so incredibly sour major investors, people that run the stock market themselves are litterly shitty brick just watching the meer 777 dow drop and 800 tsx drop.... which is marginal percentage, what happens when it drops 15%.... suicides likely, what happens when it hit 60% or worse.... I beleive if the stock market drops over 25% the effects are already worse then 1929..... 50% would be exponetially worse for every percent more that is drops... if it full out crashes down to 0%.... the US and likely canada are all fucked, and the effects will ripple around the world.

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CDsDontBurn

Germany, Argentina, Russia, Ukraine, China, Brazil, Austria are all good examples of hyper inflation. The US is currently on the road for this to happen if nothing proactive is done.

When hyper inflation occurs and debts are owed to other countries that can't be paid, is not the same as when you owe the bank money on a loan.

When a country lends money to another country, and the lendee country cannot repay those loans, it's not like the lending country can just go in and take over the lendee country. If you borrow money from a bank to buy a car and you cannot repay the loan, the bank will go in and take your car.

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Judas

actually, they can...... but more choose not to do so as it tends to stirr shit up far to much..... aka invasion...

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CDsDontBurn

invasion is primary way to take over countries and/or territories if things cannot be overtaken diplomatically. the US is established enough right now, that this won't be happening....at least any time soon (history repeats itself, and one day the US will fall).

but, that's a whole different topic and thread, so lets stay on topic please and don't make this thread go OT.

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Falstaff

there should be a free market solution to this problem, not nationalzing another bank.
tax payers shouldnt pay the for the criminal mismanagement of shareholders monies.
someone should pay for this, but it shouldnt be the consumer or the taxpayer..
england is headed to a major depression soon but America shouldnt follow.

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Judas

falstaff you figure the british are heading for a depression?

how so?

and why not us.... i mean there the biggest spender of money which they banks can't cash in the world right now...... most in debt...

Alot of the consumers are the issue, they've pulled out loans on things they couldn't possibly afford in the first place....

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CDsDontBurn

if you're going to place the whole blame on the consumer, which in reality the consumer is only part of the problem mind you, then the consumer is guilty of all of the country's current national and international economical crisis'.

when it comes to obtaining a loan, the consumer will request the loan, but it is upto the bank to decline the loan. poor lending habits by banks gave out loans to consumers that the consumer could not re-pay and now everybody is losing out on this and we are in the predicament we are in right now: economic slow-down with inflation.

inflation here is going to be a major factor later on. AFAIK typically, inflation goes up by about 3.3% a year, but with these current events and this proposed "bail-out" bill trying to get passed, i believe that we will be suffering from both rapid inflation and an increased economic recession. this will make the dollar worth less, and many things much more expensive to buy or pay off.

as i said in an earlier post in this thread, economic recession is supposed to cause deflation and not inflation. inflation occurs in a period of economic growth, which sadly, it's bubble popped and now we're in this economic recession predicament.

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Judas

consumers are the cause... you said it yourself in your own post..... "Consumer will request a loan" which has been all started right there, a consumer... that cannot afford the loan in the first place, request that which they are likely to never be able to pay off anyways.

Everyone is in a borrowing system, and no one paying anything back worth mentioning....

Sure it doesn't help that the banks ended up giving out the loan... but still the consumer shouldn't have asked for it.

It's no different then someone talking into a public fast food joint, asking for a HOT coffee and then the employee handing them that coffee only for the consumer to sevearly burn themselves.... Seriously, really, who's fault was it, the consumer for asking for the hot coffee in the first place or the employee that handed them what they asked for expecting them to NOT be complete idiots?


I'm not all sitting on the banks side at all, no no no no, everyone screwed up in the system, right from the consumer through the banks to the government right passed the government to the top of the chain, and it's all caused by the top dogs anyways.

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Vikingod

Well, it's quite a bit more comlpex than that. The market has become way to complex to point the finger at any one group or policy, etc.

Thing is, the information available to the public isn't really sufficient to make an educated decision on anything at this point, even for people with a background in this stuff (like myself). I see this as being the biggest problem at the moment. Making decisions based on the fear of what might/might not happen seems like a poor process, especially with this amount of money at stake. Then again, it seems to be what has worked in the US for the last few years.

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Judas

yes and the more then use the poor process in which the stakes get higher.... the higher the stakes.. the harder the fall..

The stock market is nothing but a big huge gamble.... it can and will crush the current way of life down into nothing more then everyone having to get back to the grass roots of what is really nessessary...

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temeteus82

was it on yesterday or day before it when the total loss in Down Jones and NASDAQ was over 1.2 billion USD's....

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Judas

actually it was 1.2 trillion.. or there abouts

the dow dropped on monday over 777 points... the nasdaq was somewhere around the realms of 450 ish of a drop.. and the TSX was over 800 point drop..

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[hobo]eclipse

McCain: “I Always Aspire To Be A Dictator” video footage Sept. 30 2008

“I just want to make a comment about the obvious issue and that is the failure of Congress to act yesterday. Its just not acceptable,” said McCain. “This is just a not acceptable situation. I’m not saying this is the perfect answer. If I were dictator, which I always aspire to be, I would write it a little bit differently.”

McCain has urged the Bush administration to bypass the will of Congress and invoke executive orders to pass the bailout bill, along with a further $1 trillion dollar spend on buying up bad mortgage debt.

McCain’s senior economic advisor Douglas Holtz-Eakin has also called on the executive branch to ignore Congress and force through the bailout legislation, which was voted down on Monday.

Another senior economic advisor to McCain, Phil Gramm, vice chairman of UBS’s US division and a lobbyist for UBS, successfully pushed for foreign banks to be included in the bailout plan after they were initially excluded.

Vikingod

But it has bounced back since then (and it was in $trillions). Single day losses don't mean quite as much as the media is presenting. It looks good as a headline, and creates fear, but the market is generally cyclical. It'll come back when people get their wits about them. It does however hurt those that are depending on the investments in the near term, I do feel for them (retirees, etc.)

What happened the other day was Wall Street sending a message, more of a tantrum, to the people in Washington. So far, people are buying into it, which brings us to our current situation with the bail out. I'm not saying their aren't legitimate fears regarding the financial sector, especially where liquidity is concerned and how that affects the consumer and small businesses. I am saying however, that given time, the market will correct itself and weed out the BS assuming it is functioning properly, thats the beauty of it. I worry that hasty decisions to inject public money to bail out those who made huge mistakes with their own sets a dangerous precedent. And if it is necessary (again, there is insufficient information available to determine this, IMO), steps had better be taken to ensure this doesn't happen again. We can't afford for companies to be so large where their faliure can sink the US/world economy into a recession and still all them to make such grevious mistakes.

That said, the bail-out is not an entirely bad deal for the US tax payer. Assuming the real estate market bounces back (and I believe it will), we actually stand to make some money on the deal once the government sells the securities back to the market. So take that for what it is.

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Judas

i would take that as nothing more then an overstepping amount of confidence in a system that is clearly broken....

how can anyone possibly think that an injection of something intangeably valueless is going to improve things? It only prolongs the enevitible result.

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CDsDontBurn

Like Viking said, you can't place the blame on any one particular group of people or polcies, which you are doing. in my previous post, i placed blame on three particular groups: the consumer, the bank, the loan processor (this was subtle as the loan officer is part of the bank). and i'm sure that there are many other factors as well that i'm not aware of also.

The consumer: requests the loan for whatever they need/want.

The loan officer: the bank employee that reviews the consumer's loan request and grants or denies the loan request. My mom works for a bank and i have a few friends that work for banks as well. They all tell me that they, the loan officers, have "worked numbers" to allow people to obtain the consumer's requested loan in order for the loan officer to get their commission/bonus/incentive on that loan, when the loan officer CLEARLY knew that they would not be able to pay off the loan.

The bank: once the loan is approved, the bank issues the money. The bank will also do further review of the loan before issuing the loan out to the consumer.

so unlike what you think judas, it's not all the consumer's fault here. there are many different factors to look at as to why the banking system is currently failing.

Granted, I don't know everything myself, but from what general knowledge i have, this is what i have observed.

definately voting democrat!

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