Bailout Nation: Freddie, Fannie, and more

[RedScare]

I dont see how blame, if you are for the bill.. or praise if your against the bill can go to the republicans for this not passing.

2/3s of the Republicans voted No...

But over a 40% of the democrats voted No also.

The voted failed by about 15, and there were 90 democrats that voted No.

If anything, whether you believe this bill was a good thing or not, The Democratic leadership wanted this passed, and the democrats have a roughly 35 member majority. They could have passed this without any republican help if they had their party together.

I expected some Democratic opposition. After all, it was a bailout of Wall Street, and it was proposed by Bush and his appointees. My surprise is that so MANY Republicans would turn on Bush, that his power within his own party has so diminished.

Read the articles on the vote. They have picked up on this as well. Or, just continue to look at it as some sort of political statement, as opposed to an observation. Whatever serves your purposes.

[houstonmacbro]

I'm not disagreeing, merely asking for other thoughts...other than his, that is.

I think anything on television is practically worthless. Why? (And I am far from a millionaire so this is just my OPINION), they are trying to sell air-time. I would do my own research and get good advice from a website you trust or someone like a college economics professor. At least the latter is not trying to sell anything.

Honestly, I think we're on our own these days.

But that is my general distrust of everything talking.

[Highway6]

I expected some Democratic opposition. After all, it was a bailout of Wall Street, and it was proposed by Bush and his appointees. My surprise is that so MANY Republicans would turn on Bush, that his power within his own party has so diminished.

Read the articles on the vote. They have picked up on this as well. Or, just continue to look at it as some sort of political statement, as opposed to an observation. Whatever serves your purposes.

I'm reacting more to the political statements of others.. like Barney Fife.... Frank.. blaming the failure of this bill on the Republicans. Thats some balls right there. I just dont see how anyone in the democratic leadership can point fingers at the other side.

This has made for strange bedfellows with Bush and Pelosi being on the same side.

I guess your right about Republicans bailing on Bush.. but then again.. Bush doesnt really matter anymore does he? Hes gone in 3 months. Being seen as too cozy with Bush was already a risk even before this mess...Republicans and democrats wanna keep their jobs with so many of the people being against the idea of a bailout. Actually, i would figure you would somewhat appreciate the fact that some republicans are actually saying "Hold on a second" this time when the President yells that the sky is falling. I guess I'm actually surprised that you are surprised at Bush's lack of influence and sway at this point ?

Ultimately, no matter who or when the blame goes for this mess getting started.... the ball is in the Democrat's court... failure to get it fixed will hurt the democrats more than the republicans in a few months. Likewise... if they do pull something out their asses and this situation gets fixed, that could be reversed.

Election is in 2 months... its a political statement whether you choose to look at it as so or not.

Read the articles on the vote. They have picked up on this as well.

The fact that Bush is a lame duck president isnt news.

News is that this didnt get passed because the Democrat leadership didnt have the sway over the entire party in the house..... and then They turn around and blame defeat on the Republicans.

Barney Frank apparently thinking that all the rest of us are blind morons that cant see how the vote went down... thats the news.

[JJVilla]

General sentiment of Texas politicians (near-unanimous opposition to the plan from both sides):

"That's the nature of Texans. We're an independent people. There's almost an un-Texan nature to the bill that was before the Congress."

Another funny quote about the proposed bailout:

"If you are addicted to alcohol, having another drink won't help. If you are addicted to cheap credit, more credit won't get you out of debt."

[RedScare]

I'm reacting more to the political statements of others.. like Barney Fife.... Frank.. blaming the failure of this bill on the Republicans. Thats some balls right there. I just dont see how anyone in the democratic leadership can point fingers at the other side.

This has made for strange bedfellows with Bush and Pelosi being on the same side.

I guess your right about Republicans bailing on Bush.. but then again.. Bush doesnt really matter anymore does he? Hes gone in 3 months. Being seen as too cozy with Bush was already a risk even before this mess...Republicans and democrats wanna keep their jobs with so many of the people being against the idea of a bailout. Actually, i would figure you would somewhat appreciate the fact that some republicans are actually saying "Hold on a second" this time when the President yells that the sky is falling. I guess I'm actually surprised that you are surprised at Bush's lack of influence and sway at this point ?

Ultimately, no matter who or when the blame goes for this mess getting started.... the ball is in the Democrat's court... failure to get it fixed will hurt the democrats more than the republicans in a few months. Likewise... if they do pull something out their asses and this situation gets fixed, that could be reversed.

Election is in 2 months... its a political statement whether you choose to look at it as so or not.

Actually, I DO appreciate that 133 Republicans listened to their constituents for once. However, the fact that there was such a divide on both sides of the aisle suggests that there was wide disagreement whether this would actually work. Looking at it in purely political terms, I am impressed that Pelosi, Frank, et al sided with Bush and Paulson...clearly because they believed something HAD to be done...not because they like Bush. And, similarly, I am impressed with the Repubs who voted against it for reasons that they seemed to think it would NOT work, or that the political fallout would be worse. Repubs voting for it, and Dems voting against, they seem to be in safer political waters. It is also interesting to note that moderate Dems and Repubs voted FOR, and conservative Repubs and liberal Dems voted AGAINST. Talk about strange bedfellows!

As for who this hurts in November, political wisdom says that when the economy tanks, the incumbent party gets the blame. Right or wrong, the GOP is seen as friendlier to Wall Street, and friendlier to deregulation, and the perception is that deregulation and lack of oversight contributed mightily to this crisis. That would seem to hurt McCain, and Republicans in close contests. Most voters do not quite understand the crisis. They are simply worried. But, the overall belief is that rich people caused this crisis, not middle class or poor, so the party more aligned with the wealthy...the GOP...would appear to be hurt more. Plus, the GOP held the White House for the last 8 years, and Congress for 6 years. Understandably, they will get the blame, just as they claim credit when times are good.

[Highway6]

....Plus, the GOP held the White House for the last 8 years, and Congress for 6 years. Understandably, they will get the blame, just as they claim credit when times are good.

I would agree, but i think my point is that this is such a monumental situation, and today will be so infamous, that the fact that the democrats were steering the ship when this day happened.. and couldnt right the ship when they were in charge.... I think that will balance out somewhat with the conventional "but the GOP was in charge for the last 8 years" argument... probably not enough though..

[RedScare]

I would agree, but i think my point is that this is such a monumental situation, and today will be so infamous, that the fact that the democrats were steering the ship when this day happened.. and couldnt right the ship when they were in charge.... I think that will balance out somewhat with the conventional "but the GOP was in charge for the last 8 years" argument... probably not enough though..

In hardcore GOP neighborhoods, that is exactly the way it will play out. In purple and blue neighborhoods, not so much. More emphasis will be placed on "who got us into this mess?" than who bailed (or didn't) bail us out. Kind of like McCain's 'surge' argument. In GOP strongholds, they talk about the surge's success. But, in 75% of the US, they talk about getting the hell out anyway. Remember, there is wide disagreement on what to do to fix this in the first place.

[Highway6]

In hardcore GOP neighborhoods, that is exactly the way it will play out. In purple and blue neighborhoods, not so much. More emphasis will be placed on "who got us into this mess?" than who bailed (or didn't) bail us out. Kind of like McCain's 'surge' argument. In GOP strongholds, they talk about the surge's success. But, in 75% of the US, they talk about getting the hell out anyway. Remember, there is wide disagreement on what to do to fix this in the first place.

no.. i agree with that.. i realize its not really going to effect how republicans vote or democrats vote so much.

more curious to see if and how this will affect the independant's perception of things as far as both the house and presidential election goes.

[westguy]

In hardcore GOP neighborhoods, that is exactly the way it will play out. In purple and blue neighborhoods, not so much. More emphasis will be placed on "who got us into this mess?" than who bailed (or didn't) bail us out. Kind of like McCain's 'surge' argument. In GOP strongholds, they talk about the surge's success. But, in 75% of the US, they talk about getting the hell out anyway. Remember, there is wide disagreement on what to do to fix this in the first place.

There's wide disagreement except when it comes to international investors - the ones footing the bills as of late. It's too late to call this a moral hazard because the regular people will suffer most when the credit line runs dry.

[memebag]

There's wide disagreement except when it comes to international investors - the ones footing the bills as of late. It's too late to call this a moral hazard because the regular people will suffer most when the credit line runs dry.

Yeah, those international investors have absolute clarity that US taxpayers should pay to fix this. I'm going to guess that US taxpayers have a similar degree of clarity that the international investors can lump it.

And I can call this a moral hazard no matter who suffers. The "regular people" allowed their government to shirk its responsibility for preventing this.

[westguy]

I'm going to guess that US taxpayers have a similar degree of clarity that the international investors can lump it.

If that happens I hope everyone has one of these ready.

[RedScare]

If that happens I hope everyone has one of these ready.

I prefer this...

Much cheaper than cat food.

[musicman]

It's too late to call this a moral hazard because the regular people will suffer most when the credit line runs dry.

just checked my mail, i received offers for three 0% credit cards today!

[RedScare]

The fact that Bush is a lame duck president isnt news.

You know, considering that McCain this morning was trumpeting the deal, and claiming credit for its passage BEFORE the vote, does the fact that 2/3rds of Republican House members voted against it signal HIS lame duck status?

This crisis is all over the map, financially AND politically. Who knows where it ends up...and who it lays waste to.

[sifuwong]

Anyone think sales of high quality laser printers will increase?

[RedScare]

MORE evidence of the earth tilting on its axis...Wall Street pundits are hoping for a new plan favorable to DEMOCRATS, so it can pass. Many Dems who opposed it did so on the basis that it did not do enough for homeowners, specifically that the bankruptcy provisions were left out to appease Republicans. The pundits are suggesting that if Dems give bankruptcy judges power to rewrite mortgages, enough votes can be gained to override Republican resistance.

This is precisely what the Republicans want...for a bailout to pass, but without their vote. Democratic leadership wants a bipartisan vote, so that if it fails it is a bipartisan failure. Looks like the Dems will have to roll the dice on their own, assuming of course, that this bailout is even the right thing to do...something that I am not willing or able to predict.

[memebag]

This is precisely what the Republicans want...for a bailout to pass, but without their vote. Democratic leadership wants a bipartisan vote, so that if it fails it is a bipartisan failure. Looks like the Dems will have to roll the dice on their own, assuming of course, that this bailout is even the right thing to do...something that I am not willing or able to predict.

Yeah, it was a lot easier to be opposed to the bailout when it looked like it was going to happen.

[musicman]

Seeing Nancy Pelosi this afternoon was entertaining. after days of we will get this done, when she made the announcement that it failed she looked dejected. it'll be interesting to see whether she makes it through the week on one pack of depends.

[BryanS]

Dow down 778 at close. Lots of lessons being learned there.

Still not enough correction. We need to see Dow 8000-ish... and have it hover there for a while (year or two?) before we can say we've hit a bottom (in the stock market)...

[RedScare]

Yeah, it was a lot easier to be opposed to the bailout when it looked like it was going to happen.

Yes, it is a bit strange watching Republicans run around looking for someone to blame for its failure when they spent all weekend badmouthing it. Seems as if they should be "happy" right now. And, there stand Bush, McCain, Bernanke and Paulson amidst the rubble, wondering what just hit them.

[westguy]

MORE evidence of the earth tilting on its axis...Wall Street pundits are hoping for a new plan favorable to DEMOCRATS, so it can pass. Many Dems who opposed it did so on the basis that it did not do enough for homeowners, specifically that the bankruptcy provisions were left out to appease Republicans. The pundits are suggesting that if Dems give bankruptcy judges power to rewrite mortgages, enough votes can be gained to override Republican resistance.

This is precisely what the Republicans want...for a bailout to pass, but without their vote. Democratic leadership wants a bipartisan vote, so that if it fails it is a bipartisan failure. Looks like the Dems will have to roll the dice on their own, assuming of course, that this bailout is even the right thing to do...something that I am not willing or able to predict.

Whatever. If people still want to buy cars, own businesses, or get loans, they will have Democrats to thank for it. There are no Republicans fit for leadership, apparently.

[BryanS]

Yes, it is a bit strange watching Republicans run around looking for someone to blame for its failure when they spent all weekend badmouthing it. Seems as if they should be "happy" right now. And, there stand Bush, McCain, Bernanke and Paulson amidst the rubble, wondering what just hit them.

This:

...oh wait... I'm sorry. That's the US economy.

[musicman]

Whatever. If people still want to buy cars, own businesses, or get loans, they will have Democrats to thank for it. There are no Republicans fit for leadership, apparently.

if that's leadership, we are in trouble.

[sifuwong]

Well, if people are gonna have to start paying cash now even if they don't have any money, we might see people now start printing their own money.

[BryanS]

I would agree, but i think my point is that this is such a monumental situation, and today will be so infamous, that the fact that the democrats were steering the ship when this day happened.. and couldnt right the ship when they were in charge.... I think that will balance out somewhat with the conventional "but the GOP was in charge for the last 8 years" argument... probably not enough though..

What a crock. Democrats bring two-thirds of their party's members to vote for it... Republicans bring 33%. It is absurd to think that a Democrat has to perform a Republican whip's job (...not that whips are bad, I hear John McCain's Chief of Staff likes whips.)

I find it laughable that Republicans are blaming Pelosi for turning away Republican voters. I heard an analysis on MSNBC or CNN on just how ridiculous that is. So if you were a Republican and were set to vote FOR the bill... but then get your panties in a bunge because of Pelosi... and vote against it... You're going to put the good of the country BEHIND your disdain for Pelosi? COWARDS. But that's not what happened... The failure of this bill had NOTHING to do with Democrats... The republicans and democrats that voted against it had real reasons to vote against it.

[jmancuso]

[BryanS]

Now I'm getting angry...

TODAY... Bernake just injected $630 BILLION into the market. Unlike the "bailout" - this was an act of just printing money! IT DIDN'T WORK. At the rate we're going... inflation will be coming for us, soon enough.

Now... we are being asked to inject another $700 billion to free up frozen credit (I realize we are getting collateral in exchange)... If Ben has already, on his own, injected almost this amount... and it didn't work... why the hell are we going to throw another 700 billion down the drain?

Nobody knows what they're doing. Bernake and Paulson were asleep at the switch. Now we are in a crisis. They're both nervous as tit mice. Bush has lost control... and Democrats and Republicans are agreeing in voting for AND against the bailout!

Sweet jumpin' Mary and Joseph someone figure this mess out! The End Days are near.

[TheNiche]

OK, the oversimplification police need to pull you over

Don't lose sight of the fact that the subprime loans, in and of themselves, have not caused the meltdown. If they hadn't been packaged with other (good) debt, they could have been perhaps isolated and dealt with. Instead, the CDO/CMO and credit swap markets were a big, juicy, unregulated apple. There was no end to Wall Street's appetite to make more money off bad debt. Wall Street realized plenty of profit, millions and millions of dollars to individuals in already-exercised options, bonuses, etc, over the past few years, before it started coming undone.

You're correct. They did [past tense]. That doesn't change the situation as it is facing us in the here and now. Propping up the financial services sector is necessary, and thus far government has been prudent in wiping out the investors in those firms before rescuing them.

And really and truely (as you allude to), subprime fallout vs. CDO/CMO fallout is chicken or the egg. Without either one or the other, you have reasonably healthy financial markets.

[Mark F. Barnes]

What's the big scare about that? We've been just printing money for the last 30 some odd years. Money is just a coupon, a voucher. It's only legal tender as long as the government says it is. The day the pull the plug on those vouchers, you can wipe your ass with it. People are worrying about there property values dropping like a twenty pound turd if we don't bail out Fannie and Freddie, what in the hell do you think it's going to do if we buy it with worthless paper? Drop like a 20 pound turd. This is a no win situation for John Q Public, taxpayer, and rape victim. I'm not seeing any of the members of Congress worried about making payroll in DC.

Speaking of Payroll what is this crap about these companies that can't make payroll if they can't get credit? Maybe I've been out of the mainstream a little too long, But in 1999 every 5th of the month I got a voucher sent to me by Texaco's payroll department, and a watermelon line cost sheet generated by James Dempsey, (the CFO) asking me to approve payroll for the drilling department, to come out of the General Fund, via the 00126 line charge for payroll, and the 00127 for expense reimbursements. We never made payroll off of credit in the 30 years I spent there that I can recall. Currently I have 12 consultants 1099 contract employees, that get paid every two weeks, based on the invoice and time sheets they turn into me. I pay them two days from the time they invoice me, and I have to wait on my money from the prospective Oil Companies, which averages 30-45 days. Most of my guys work 20-25 days out of a month @ $1200.00/day plus mileage, per Diem, and direct expenses. Why is it that these so called companies can't make payroll without credit, I am not getting the gist of that. I know my payroll is less than a half a million a month, but what gives with this paying your employess with credit?

Now as far as the death of the Bill today, Pelosi didn't do it any favors today. This woman just cannot resist opening her mouth and taking shots at Bush. No matter that the future of this country was at stake. No matter that they had an agreement to go forward in a bipartisan manner to try and deal with it. Pelosi, stepped up to the plate just before the vote to start blaming Bush for everything that ails America.

[TheNiche]

Now I'm getting angry...

TODAY... Bernake just injected $630 BILLION into the market. Unlike the "bailout" - this was an act of just printing money! IT DIDN'T WORK. At the rate we're going... inflation will be coming for us, soon enough.

1-month Treasuries have been flirting with negative returns. That means that investors are willing to pay the government money to borrow their money! Inflation is not really the chief concern of the moment.

Now... we are being asked to inject another $700 billion to free up frozen credit (I realize we are getting collateral in exchange)... If Ben has already, on his own, injected almost this amount... and it didn't work... why the hell are we going to throw another 700 billion down the drain?

Per the Federal Reserve's press release on the subject:

Actions by the Federal Reserve include: (1) an increase in the size of the 84-day maturity Term Auction Facility (TAF) auctions to $75 billion per auction from $25 billion beginning with the October 6 auction, (2) two forward TAF auctions totaling $150 billion that will be conducted in November to provide term funding over year-end, and (3) an increase in swap authorization limits with the Bank of Canada, Bank of England, Bank of Japan, Danmarks Nationalbank (National Bank of Denmark), European Central Bank (ECB), Norges Bank (Bank of Norway), Reserve Bank of Australia, Sveriges Riksbank (Bank of Sweden), and Swiss National Bank to a total of $620 billion, from $290 billion previously.

These steps are being undertaken to mitigate pressures evident in the term funding markets both in the United States and abroad. By committing to provide a very large quantity of term funding, the Federal Reserve actions should reassure financial market participants that financing will be available against good collateral, lessening concerns about funding and rollover risk.

The short of it is that 1) help is conditional, 2) help is a very short-term measure, and 3) help is on the way, but its not here yet. The Fed's powers are limited, too. I hope you realize that.

Also, Bryan, kill the ill-informed dramatics. No amount of flailing your arms around wildly and screaming about how bad it is will really do anything other than clutter up the internet. And the internet doesn't need your help at that to begin with.