The Senate has effectively killed the chances of the auto bailout. Leading the oppositon: Republican Senator Mitch McConnell.
In a speech on the Senate floor, Mr. McConnell said he and other Republicans had drawn a clear distinction between the Treasury’s $700 billion economic stabilization, which they helped pass in October, and the proposal to aid the American automakers, which he said raised questions about which industries or individuals deserve help.
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More bad news on the economic front. The Dow Jones dropped more than 410 points today.
The Dow Jones industrials dropped more than 410 points, and all the major indexes lost more than 4 percent. The stock market has lost about $1 trillion over the past three days, according to the Dow Jones Wilshire 5000 index, which reflects the value of nearly all U.S. stocks.
U.S. Treasury Secretary Henry Paulson said he was backing away from buying troubled mortgage assets and would focus on the capital needs of both banks and non-bank financial institutions.
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The economy continues to deteriorate:
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Yesterday's stock market gains didn't last through today. The Dow closed down today , due to fears of recession.
Two stocks that gained: Citigroup and Bank of America.
The AP has more on today's 200 point drop.
On a related note, GMAC told General Motors car dealers yesterday only people with credit scores above 700 will get new car loans. That's going to leave a lot of unsold cars on the GM dealers' lots. Cars the dealerships may own but be financing and paying interest on. How long can they hold out? [More...]
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Whether it succeeds or fails, elected officials and business leaders alike said it stands to fundamentally alter the relationship between government and the private markets perhaps in ways that are not immediately clear.
Passage was hardly a victory for the Bush Administration: [More....]
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The Senate is about to vote on the bailout bill. Here's a thread to discuss bailout issues and the vote.
Update: So far it's 55 to 18. Looks like it will pass easily.
It's a done deal: It passed 74 to 25. Vrey few Democrats voted against it. Among them: Feingold, Johnson, Landrieu, Tester, Nelson,, Stabenow, Wyden, Cantwell, Dorgan.
Update: Here comes the self-congratulations: Harry Reid and Mitch McConnell are giving speeches about how great the Senate is. Reid says Chris Dodd did a yeoman's job. Reid said he was Dodd's lieutenant.
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The Senate will vote on its own bailout plan tomorrow night.
Majority Leader Harry Reid and GOP Leader Mitch McConnell say, however, that they're going to add a tax cut package already rejected by the House on Monday....The Senate plan would also raise federal deposit insurance limits to $250,000 from $100,000.
Sen. Barack Obama and John McCain today both urged passage of a bill.
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The Nay's are here, and the 95 Dems who voted against it are in Roman letters, while the Republicans are in Italics.
Of note: Rep. Mark Udall (D-Colo.)voted against it. Udall, a true progressive in my view, is running for the Senate in Colorado. Another Colorado Democrat who voted against it is the much more centrist John Salazar, brother of Colorado Senator Ken Salazar.
Whose vote do you find surprising or laudatory?
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The House of Representatives has rejected the proposed bailout.
The vote against the measure was 228 to 205. Supporters vowed to try to bring the rescue package up for consideration against as soon as possible.
Stock markets plunged sharply at midday as it appeared that the measure was go down.
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Here's the summary of the Bailout Proposal from Nancy Peloisi's office.
It's now a $350 billion bailout, at least up front. I'm not seeing anything that prevents home foreclosures or that helps those who underwent foreclosures in the past year.
The government can use its power as the owner of mortgages and mortgage backed securities to facilitate loan modifications (such as, reduced principal or interest rate, lengthened time to pay back the mortgage) to help reduce the 2 million projected foreclosures in the next year
There's tax relief -- for banks. [More...]
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Just after midnight on Saturday, House Speaker Nancy Pelosi announced a bailout deal has been reached.
The plan calls for the Treasury Department to buy deeply distressed mortgage-backed securities and other bad debts held by banks and other investors. The money should help troubled lenders make new loans and keep credit lines open. The government would later try to sell the discounted loan packages at the best possible price.
At the insistence of House Republicans, some money would be devoted to a program that would encourage holders of distressed mortgage-backed securities to keep them and buy government insurance to cover defaults.
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I have friends who are far more financially savvy than I am, and they say they are very frustrated with this bailout procedure. They say no one is asking the government what percentage of the dollar they are going to pay for these non performing assets? Is it 100%.....or 20 %? what is it? They say this is very important.
Does anyone know the answer?One more thing: The AP reports:
"The government could contract with private companies to manage the assets it purchased under the rescue" The proposal does not require that the government receive anything from banks in return for unloading their bad assets. But it would allow the Treasury Department to designate financial institutions as "agents of the government," and mandate that they perform any "reasonable duties" that might entail.The bailout, as we've mentioned before, would be sheltered from court review. There's something wrong with this picture. Care to fill in what it is?
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