Where to now for the 'bailout'?

[Bushman]

So the good senators have shown some back bone and ignored Paulson, Helicopter and Dubya's prominent jawbones.

So where to now for the 'bailout'?

Looks like efforts are likely to turn to the severely eroded equity bases of the banks that are left standing on a case-by-basket-case basis. So in effect we will have a nationalisation of the US banking system. Japan and the 1980's comes to mind?

Anyway it should prove cheaper than pouring 'good' money after bad as more and more tranches of leveraged securities debt start to whiff.

And I am sure it will be good for a few more dead cat bounces. Happy days

 

[Bushman]

Actually I spoke too soon - Kevin07 will rescue the bailout. Hang on to your stinky CDO's ;-)


HONG KONG (MarketWatch) -- Australian Prime Minister Kevin Rudd Tuesday called for global pressure on U.S. lawmakers to pass the $700 billion financial bailout package after the House of Representatives voted it down Monday, according to reports. "The call that we need to make is for them to put aside party politics and to pass this package because it is necessary for the stabilization of U.S. financial markets and global financial markets," said Rudd at a news conference in Canberra, according to a Reuters report. "All our interests are at stake here," he reportedly added.

 

[RustyK]

I am sure all the democrats and republicans that voted against the bail out package will have now changed their minds on the back of this incredibly influential statement by Prime Minister Rudd!

 

[auric]

what a turkey this rudd is; has no idea, one breathe we can ride out the storm now he calling on the world to pressure the usa govt to pass the bail out, hints of panic i think or weak,should have said nothing and backed our banks ,or is there doubt????

 

[gav]

Hmmm, didnt they all fall asleep when Rudd was speaking over there? What makes him think they are listening now?

 

[mayk]

He is using McCain's tactic of exhibiting leadership. Everyone knows the bill will be passed and later on he can add this as an achievement... Long term thinking folks...

 

[RustyK]

I agree with 'Mayk' that the bill will be passed in some format fairly quickly rightly or wrongly. But K Rudd will have very little influence on that and surely only idiot would believe he has assisted despite claims he will make in the future???

 

[Temjin]

The bill will be passed one way or the other, with different terms of course. Warren made a few cool $ billion bet on it.

And they will be resubmitting the bill again tomorrow, I think.

 

[Bushman]

I agree with 'Mayk' that the bill will be passed in some format fairly quickly rightly or wrongly. But K Rudd will have very little influence on that and surely only idiot would believe he has assisted despite claims he will make in the future???

I would say it is a breathless example of political grandstanding by Kev07. Maybe he can become a full-time lobbyist in Washington given that he is our 'jet-setting' PM.

Off course it will have no effect.

 

[chops_a_must]

Lol.

You gotta love the muppets that swallow hook, line and sinker the one liners the conservative media dish out.

Did wonders for one of WA's best premiers in the history of the state.

 

[snapperhunter]

Did Rud speak in English or Mandarin during the conference???

I think he may as well have spoken in Mandarin, that way the Yanks might have taken more notice of him, rather than taking catnaps!

 

[chops_a_must]

Yes. Ok. We get it.

 

[Kauri]

The US House of Representatives will reconvene at noon U.S EST on Thursday, following yesterday"s 228-205 vote against the Bush administration"s TARP. 132 Republicans and 94 Democrats voted against the plan, with 65 Republicans and 140 Democrats voting in favour ...
party politics Kev??? isn't Bush a Republican???.. might be more to do with individual senators being concerned about thier seats metinks...

Cheers
...........Kauri

 

[chops_a_must]

The US House of Representatives will reconvene at noon U.S EST on Thursday, following yesterday"s 228-205 vote against the Bush administration"s TARP.

Admiral Ackbar knows:

Or:

 

[Bushman]

Lol.

You gotta love the muppets that swallow hook, line and sinker the one liners the conservative media dish out.

Did wonders for one of WA's best premiers in the history of the state.

PS: I voted Green/Labour so I must be Kermit?

[INSERT VIGILANTE AGGRESSIVE RETORT HERE] I'll title it 'The Banality of the Troll'.

 

[deadset]

I'm wondering when the significant timelines are :

Both Obama and McCain said they would return to Washington for the vote, due to take place sometime after a series of votes starting at 7:30 p.m. EDT (2330 GMT).

is that 9:30am Thursday ?

Any other dates on the radar ?

So according to Murphy's law they will either vote yes and it'll go down or they'll vote no and it'll go up.

 

[dhukka]

Contrary to popular belief there are some sensible people on Capitol Hill in Washington. It's almost uncanny how accurate this senator was with his predictions back in 1999:

Senator Dorgan on the 1999 Financial Modernization Act

 

[Kauri]

are insurance co's covered???

Cheers
...........Kauri

 

[gfresh]

My thoughts.

The package will be passed, and there will be much celebration and hand slapping... for about 5 minutes. Then the real attention will turn to the other important issues of slowing the housing falls, and the intense problems in the real economy. People will realise that maybe, just maybe it's not just "Wall Street" that needs to be saved but all their precious jobs and staving off a depression, which will have catastrophic effects for everybody. They'll soon forget about a few execs getting their golden parachutes, or whatever they were worried about in terms of "bailing out" those that caused the problem.

Further major problems will pop up, of which this bill will be shown not to be effective against anyhow. Mainly the sudden shrinking up of credit, the fuel for their economy. Seeing as this has been the real forcing driving the driving the GDP engine in recent years, not true efficiency improvements, the engine will start stalling severely. How can you have less banks, and severely injured ones at that, providing more, and more credit? I still don't quite get that.

As a result corporations will scale back massively, lay off jobs, collapse, bring down other corporations they owe money to (suppliers/creditors, etc). Rates policy is totally ineffective once over this edge, they only had to look to Japanese history to see this.

As far as I can tell, all the magic "$700bn" figure does is allow some paper shuffling in and out of the banks balance sheets, which most knows that is ludicrous anyhow. Eventually they'll drop the cards once again, probably next quarter when the whole balancing of the books has to be done again, and mortgage resets will *still* be going strong. Eventually large numbers of AAA mortgages will be defaulting as unemployment races towards 10%. Then there will complete, absolute fear, that nothing may be able to be done.

Then we will see some very crazy ideas put forward to help fix the problem, as per the 1930's. Some may even work somewhat, but it will be many years until the system can repair itself.

 

[gfresh]

Case in point.. if this is an issue of restoring confidence in lending, shouldn't have the bill getting through at least the Senate somewhat increased that confidence? doesn't seem like it...

The London interbank offered rate, or Libor, that banks charge each other for such loans climbed 6 basis points to 4.21 percent today, the highest since Jan. 11, the British Bankers' Association said. The corresponding rate for euros advanced 3 basis points to a record 5.32 percent. The Libor-OIS spread, a gauge of cash scarcity among banks, widened to a record.