Economic Stabilization Act of 2008 (Bank Bailout Bill) – FAILS to Pass

September 29, 2008 by · 1 Comment
Filed under: Economic News 

I have been watching this live and this is very interesting times. The bill did not get a simple majority and lost by 22 votes and now we are seeing what Martial Law means. It was enacted Sunday night and now there is a motion to pass it by another vote which I fear is private based on party to shield them from political fallout out. I only saw 5 votes against suspending the rules of the house which is what can happen under Martial Law. With only 5 votes in the “nay” column, we can safely assume everyone except the most outspoken opponents voted for it so I know what I will be doing with my vote when it comes to re-election very very soon. The markets were down 700 points at one point and it could go lower. I will be covering this as it unfolds.

Bloomberg Release:

U.S. stocks plunged and the Standard & Poor’s 500 Index tumbled the most since 1987 after the House of Representatives voted down a $700 billion plan to rescue the financial system.

Sovereign Bancorp Inc. tumbled 66 percent and National City Corp. slid 52 percent, leading financial shares in the S&P 500 to an 11 percent slide. The MSCI World Index of 23 developed markets sank 6 percent, the most since its creation in 1970.

“It’s pretty much a nightmare,” said Michael Nasto, the senior trader at U.S. Global Investors Inc., which manages $5 billion in San Antonio. “This is the worst we’ve seen it since the credit mess started. Until we know exactly why they didn’t pass it, we’re going to be selling off for a while.”

The S&P 500 sank as much as 87.02 points, or 7.2 percent, to 1,125.99. The Dow Jones Industrial Average slid 631.13, or 5.6 percent, to 10,512 at 2:09 p.m. The Nasdaq Composite Index declined 148.4, or 6.8 percent, to 2,034.94.

The S&P 500 extended last week’s 3.4 percent retreat after the House voted 205 to 228 against the measure to authorize the biggest government intervention in the markets since the Great Depression. The crisis that began with bad home loans to subprime borrowers is threatening to push the economy into a recession as consumers lose confidence and banks cut back on lending.

The Dow average swung by more than 200 points during fifteen trading days in September as the government seized the two largest U.S. mortgage-finance companies, Fannie Mae and Freddie Mac; Lehman Brothers Holdings Inc. filed for bankruptcy; Merrill Lynch & Co. agreed to sell itself to Bank of America Corp.; American International Group Inc. was taken over by the Treasury; and Washington Mutual Inc. was seized by regulators in the biggest U.S. bank failure in history.

Lawmakers reached an agreement yesterday on the $700 billion bailout plan as House Republican leaders backed away from opposition to Paulson’s proposal after it included plans to create insurance for mortgage-backed securities.

The plan “will not jump-start lending, as house prices appear likely to keep falling for some time,” Ian Morris, chief U.S. economist at HSBC Holdings Plc, wrote in a Sept. 26 note to clients. “The forces of deleveraging are overwhelming, and so the credit crunch will remain over the next few quarters. As a result, the economy would be virtually stalled over the next year.”

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One Response to “Economic Stabilization Act of 2008 (Bank Bailout Bill) – FAILS to Pass”
  1. SAVE THE BANKS! says:

    Can you find a list of how the house voted on this issue? The website is actually down, and I cannot find a list of results anywhere.

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