Global Correction

[lannarebirth]

People like to look at Gold prices, but I think Copper prices are more instructive:

[bingobongo]

its over.....HOuse of Representatives rejected the bailout package........205 Yes to 228 No

strap in Asia, it coming............

Dow10,629.48-513.65-4.61%

[flying]

its over.....HOuse of Representatives rejected the bailout package........205 Yes to 228 No

strap in Asia, it coming............

Dow10,629.48-513.65-4.61%

What I dont understand is the Republicans killed it??? 132 nay 66 yea

Democrats 94 nay 141 yea

I thought this was their baby?

I guess they are holding open the clock & hoping they change their votes

[lannarebirth]

This is what's called "the point of recognition".

And there it was again in the same place.

[flying]

Appears to be concrete now.........Bill Has Failed

[LaoPo]

I could hardly believe it but it's true:

HOUSE HAS REJECTED THE $700BILLION BAIL OUT BILL

In the meantime, on Wall St.

Dow 10,618.17 -524.96 (-4.71%)

Nasdaq 2,033.04 -150.30 (-6.88%)

S&P 500 1,137.49 -75.52 (-6.23%) at 2.12PM EDT

U.S. stocks hammered with doubts over rescue

Dow industrials plummet as much as 700; Nasdaq Composite down 5.7%

http://www.marketwatch.com/news/story/us-s...C-76D9F2688338}

Fasten your seatbelts

LaoPo

[russianrobert]

Dow was down 705 at one point but swung back to -470 at the moment.

A Wall st. trader was saying on CNN that if the bill doesn't pass on the second attempt we could see a fall of 1000-1500 points

[flying]

Why always a Black Monday?

http://mutualfunds.about.com/cs/1929market...lack_monday.htm

http://en.wikipedia.org/wiki/Black_Monday_(1987)

[LaoPo]

House votes against $700 billion rescue package

By Ruth Mantell & Steve Gelsi, MarketWatch

Last update: 2:13 p.m. EDT Sept. 29, 2008

WASHINGTON (MarketWatch) -- House lawmakers voted 205 to 228 Monday against approving the historic $700 billion financial rescue plan, a sharp blow to the administration and bipartisan rallying efforts from leaders in Congress who warn that the country is on the brink of an economic precipice.

With elections approaching, some lawmakers -- both Democrats and Republicans -- may feel nervous about voting for a plan that risks so much taxpayer money and can't promise success. But the president has lobbied hard to approve the plan, and U.S. officials also have stressed the dire consequences of taking no action.

Critics say the plan does not adequately address problems such as job losses and a distressed housing market that underlie current economic weakness. U.S. officials had hoped the plan would ease the credit crunch and restore confidence in the markets, even as markets plunged around the world. Those in favor of the rescue plan may have been trying to treat the most manageable symptom -- a frozen credit market -- if not the actual disease.

A vote in the Senate was expected Wednesday, and the president would have followed with a speedy signature.

Earlier Monday, doubt emerged over whether enough representatives would vote in favor of the plan and House Speaker Nancy Pelosi appealed to colleagues in the early afternoon, stressing that representatives will continue to monitor financial issues and pursue additional strategies. She said it's imperative that the measure on the floor receives bipartisan support.

"That is the only message that will send a message of confidence to the markets," Pelosi said.

Colleagues applauded after appeals for bipartisan agreement on the rescue plan from Rep. John Boehner, House minority leader, and Rep. Barney Frank, chairman of the financial-services committee.

The risk of not acting is much higher than the risk of acting, according to Boehner.

"I didn't come here to vote for bills like this. Let me tell you this: I believe Congress has to act and that means each and everyone of use," he said.

Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson have said the plan is necessary to avert serious consequences for markets and the economy.

There's evidence that voters may be warming to the plan: A new national survey shows that 33% of likely voters now favor the plan, up from 24% on Friday, according to Rasmussen Reports. The survey, conducted Sunday, also found that 32% of voters are opposed to the plan, compared with one-half of those surveyed Friday. Still, 35% of voters are not sure about the plan.

"Those who understand that taxpayers will eventually get much of the money back support the bailout by a 2-to-1 margin," Rasmussen Reports said. "Those who incorrectly believe the government will not be getting money back oppose the bailout by a 62% to 18% margin."

Need for speed

Even as politicians rushed to pass the legislation, investors voiced concern about its ultimate impact, as four European financial institutions were bailed out and Wachovia Corp.'s banking operations were taken over by Citigroup Inc. Stocks opened sharply lower on Wall Street and then fell hard.

At the White House, Bush urged passage of the financial-rescue package, in a move to shore up the country's ailing lending system.

Also Monday, Bernanke said he's looking forward to "swift passage" of the legislation. Bernanke has been urging lawmakers to move quickly on a rescue plan, warning that the economic and financial consequences of a delay would be dire.

"This legislation should help to restore the flow of credit to households and businesses that is essential for economic growth and job creation, while at the same time affording strong and necessary protections for taxpayers," Bernanke said in a statement.

The giant plan is needed to avert a deeper crisis that could hamper the flow of money throughout the financial system, President Bush said. He added that the credit crisis and the housing slowdown will remain facts of life for Americans for the time being.

Under the measure, the federal government will purchase assets from banks in order to free up lending in the system, and strong oversight is included, Bush said before U.S. financial markets opened Monday.

Elsewhere, regulators announced Monday that Wachovia's banking operations were being bought by Citigroup.

Paulson said he supports the Federal Deposit Insurance Corp.'s actions to facilitate the sale to Citigroup Bernanke also said he supports the FDIC action.

"I agree with the FDIC and the Federal Reserve that a failure of Wachovia would have posed a systemic risk," Paulson said in a brief statement.

The Treasury Department also said its temporary guarantee program for U.S. money-market funds in now open. For the next year, the Treasury will insure holdings of any publicly offered money-market mutual fund, retail and institutional, that pays a fee to participate. The temporary guarantee program provides coverage to shareholders for amounts that they held in participating funds as of Sept. 19.

Progress made on rescue

On Sunday, Democratic congressional leaders announced their agreement on details of the rescue plan, releasing a draft text trumpeting taxpayer guarantees and caps on executive compensation.

The draft bill, titled the "Emergency Economic Stabilization Act of 2008," follows days of legislative wrangling as U.S. financial markets teetered on the edge of a collapse triggered by the U.S. mortgage crisis.

The bill will be introduced in the House of Representatives Monday morning and, pending passage, then head to the Senate, said Senate Majority Leader Harry Reid, D-Nev.

"This isn't about a bailout of Wall Street; it's a buy-in so we can turn our economy around," House Speaker Nancy Pelosi, D-Calif., said at a press conference announcing the agreement.

The draft legislation would authorize $250 billion immediately, with another $100 billion upon presidential certification. A further $350 billion would also be available subject to congressional approval.

"I appreciate the leadership shown by members on both sides of the aisle, who came together to write a very good bill," Bush said in a statement. "This bill provides the necessary tools and funding to help protect our economy against a systemwide breakdown."

Under the proposed bill, the Treasury Department can use a combination of tactics to buy bad loans, focusing on mortgages and mortgage-backed securities but also including other types of loans under certain conditions. Treasury could purchase the bad debt through an auction process as well as by buying loans directly, a Treasury official said in a conference call with reporters.

The proposed legislation also allows companies to participate in an insurance program, whereby Treasury would guarantee troubled assets, charging companies a premium "sufficient to cover anticipated claims," according to the bill.

"This bill provides the necessary tools to deploy up to $700 billion to address the urgent needs in our financial system, whether that be by purchasing troubled assets broadly, insuring troubled assets, or averting the potential systemic risk from the disorderly failure of a large financial institution," Treasury Secretary Henry Paulson said in a press release.

"I am confident this legislation gives us the flexibility to unclog our financial markets [and] increase the ability of our financial institutions to deliver the credit that will help create jobs. We are taking the steps needed to be ready to begin implementing this legislation as soon as it is signed," he said.

The government would get a stake in companies receiving bailout funds so that taxpayer money could be recovered if those companies grow in the future, according to the bill.

The proposed legislation also requires that in five years, the president submit a proposal to Congress "that recoups from the financial industry any projected losses to the taxpayer."

Existing executive-pay contracts will stay in place

In some cases, the bill would require companies limit executive pay, but those limits vary depending on the method by which Treasury purchases a firm's troubled assets, and how much Treasury antes up.

"When Treasury buys assets at auction, an institution that has sold more than $300 million in assets is subject to additional taxes, including a 20% excise tax on golden parachute payments triggered by events other than retirement, and tax deduction limits for compensation limits above $500,000," according to a synopsis of the text of the bill.

While the proposed bill prevents companies from signing new golden-parachute deals with top executives after Treasury gets involved, it does not change the terms of already-existing contracts, apparently in an effort to encourage companies to participate in the bailout program.

"Those are contractual obligations between a company and their employees," the Treasury official said. "We want to encourage all institutions, even healthy institutions, to participate," he said, adding that "we're not abrogating contracts."

In situations where Treasury steps in to directly purchase a company's bad loans, the government will move "aggressively" to ensure executive compensation isn't excessive, the official said. "In one-off negotiations, then we would be imposing executive compensation standards that the secretary will define. That's nothing new. We've expressed a strong view [in the past] when it comes to executive compensation."

Keeping an eye on progress

The bill would put oversight provisions in place, including creating the position of an inspector general as well as a congressional oversight panel to monitor the program, plus a requirement that the Treasury secretary regularly report to Congress the details of all loan purchases.

Also, "all of the transactions related to this legislation will be on the Internet within 48 hours," Pelosi said. "That transparency, that oversight, will be very important to our economy."

The bill also contains some provisions to help families in financial distress avoid foreclosures, in part by creating a plan to "encourage servicers of mortgages to modify loans" and allowing the Treasury to use loan guarantees to avoid foreclosures.

While critics have noted that government encouragement won't necessarily impel servicers to work with borrowers, the Treasury official said that buying large groups of loans will help push that process forward. "Treasury will be buying many of the securities in volume. We will have a lot of influence on the servicers and we will work aggressively to ... prevent foreclosures," the official said.

Candidates weigh in

Before the release of the draft text, presidential candidates John McCain and Barack Obama said Sunday morning that they would be willing to sign off on the massive financial rescue plan but would need to first consider the details. See full story.

When asked if he supported the plan, McCain told ABC's This Week: "I'd like to see the details, but hopefully yes. ... This is something we'll all swallow hard and go forward with."

Obama told CBS's Face the Nation: "We have to get something done. ... My inclination would be to vote for it, understanding that I'm not happy about it -- we should have never gotten to this place."

THE WALL STREET JOURNAL/MarketWatch

LaoPo

[flying]

Can one of the more financially astute readers explain why Oil also lost so much today?

They always say oils high price is not driven by speculators but by demand.

So why does oil drop 11 USB/barrel on news?

Just curious

[russianrobert]

Senoir republicans interviewed after the vote said their members scuppered the bill because house speaker Nancy Pelosi made a partisan speach before the vote.

Financial systems have failed and now the political system is failing too.

[russianrobert]

Can one of the more financially astute readers explain why Oil also lost so much today?

They always say oils high price is not driven by speculators but by demand.

So why does oil drop 11 USB/barrel on news?

Just curious

If the bill fails the world falls into recession and therefore demand for oil will drop. That's the way i see it.

Other commodity prices have also slid today.

[lannarebirth]

Can one of the more financially astute readers explain why Oil also lost so much today?

They always say oils high price is not driven by speculators but by demand.

So why does oil drop 11 USB/barrel on news?

Just curious

They often lie.

[LaoPo]

Dow was down 705 at one point but swung back to -470 at the moment.

A Wall st. trader was saying on CNN that if the bill doesn't pass on the second attempt we could see a fall of 1000-1500 points

Let's see: DOW at 10,625 this moment..... that would be 9,625 to 9,125.

But, 8,000 would be quite possible as well and that would be reaching a level that was last seen in Feb. 2003; 5 1/2 years ago.

LaoPo

[flying]

Senoir republicans interviewed after the vote said their members scuppered the bill because house speaker Nancy Pelosi made a partisan speach before the vote.

Financial systems have failed and now the political system is failing too.

They also say this is proof of McCains inabilty to lead.

He said charge they said we dont think so & went maverick on him.

Obama said charge & they did.

I wonder?

[flying]

Can one of the more financially astute readers explain why Oil also lost so much today?

They always say oils high price is not driven by speculators but by demand.

So why does oil drop 11 USB/barrel on news?

Just curious

They often lie.

[bingobongo]

if the DOW does not bounce over 10,703, then the next stop is 10,300

asia is going to be screwed tuesday morning (as will Europe).........the trend has been and will be down

and yes LOS SET is going to circle the bowl quite soon as well

[russianrobert]

Senoir republicans interviewed after the vote said their members scuppered the bill because house speaker Nancy Pelosi made a partisan speach before the vote.

Financial systems have failed and now the political system is failing too.

They also say this is proof of McCains inabilty to lead.

He said charge they said we dont think so & went maverick on him.

Obama said charge & they did.

I wonder?

Not what i'm hearing. Republicans favour the market, therefore they would prefer a 'market' solution to the problem. They are by nature against a bail out for the markets.

Also, i think it has little to do with McCain. More to do with a lame duck president who also happens to be a republican.

[lannarebirth]

Senoir republicans interviewed after the vote said their members scuppered the bill because house speaker Nancy Pelosi made a partisan speach before the vote.

Financial systems have failed and now the political system is failing too.

They also say this is proof of McCains inabilty to lead.

He said charge they said we dont think so & went maverick on him.

Obama said charge & they did.

I wonder?

Not what i'm hearing. Republicans favour the market, therefore they would prefer a 'market' solution to the problem. They are by nature against a bail out for the markets.

Also, i think it has little to do with McCain. More to do with a lame duck president who also happens to be a republican.

I have read reports that constituents have been contacting their representatives and voicing opposition to the bill (depending on which reports you read, in numbers ranging from 10-200:1). These congressmen face the electorate in 5 weeks time. I think it was a self preservation vote. I'm sure if enough pork gets thrown their way, they'll find 12 more votes.

[russianrobert]

Senoir republicans interviewed after the vote said their members scuppered the bill because house speaker Nancy Pelosi made a partisan speach before the vote.

Financial systems have failed and now the political system is failing too.

They also say this is proof of McCains inabilty to lead.

He said charge they said we dont think so & went maverick on him.

Obama said charge & they did.

I wonder?

Not what i'm hearing. Republicans favour the market, therefore they would prefer a 'market' solution to the problem. They are by nature against a bail out for the markets.

Also, i think it has little to do with McCain. More to do with a lame duck president who also happens to be a republican.

I have read reports that constituents have been contacting their representatives and voicing opposition to the bill (depending on which reports you read, in numbers ranging from 10-200:1). These congressmen face the electorate in 5 weeks time. I think it was a self preservation vote. I'm sure if enough pork gets thrown their way, they'll find 12 more votes.

I have been hearing that as well. Strange then that the Democrats didn't act in the same way. They aslo meet the voters in 5 weeks time. It was overwhemingly the Republicans who said 'No'

(i'm neither Dem or Rep)

[lifeisrandom]

First and only priority of a politician is to stay elected.

[bingobongo]

well folks, cash is king, credit markets frozen...........good luck to whats left of the real estate market, it is going to get more expensive to service all that global debt, from factories, car dealerships, new construction, builders, etc. anyone who needs credit to survive

Treasurys soar, credit pipes frozen

Meanwhile, banks have the tap screwed down tightly on lending, keeping credit in a choke-hold.

http://money.cnn.com/2008/09/29/markets/bo...sion=2008092914

Edited September 29, 2008 by bingobongo

[LaoPo]

Not what i'm hearing. Republicans favour the market, therefore they would prefer a 'market' solution to the problem. They are by nature against a bail out for the markets.

Also, i think it has little to do with McCain. More to do with a lame duck president who also happens to be a republican.

Nah....Some...Republicans (called: Partisans) are worried about their seats because their back bones (voters) will send them away if they don't vote against the Bill, so:

House to Wall Street: Drop dead

Commentary: Uneasy Republicans couldn't stomach massive bailout

By MarketWatch

Last update: 2:40 p.m. EDT Sept. 29, 2008

WASHINGTON (MarketWatch) - With a firm rejection of Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke, the House Republicans have told the financial markets that they'll have to solve their problems on their own, without $700 billion of taxpayer money.

In a stunning vote on Monday, the House rejected the financial rescue package on a vote of 205 to 228. Republicans voted against the bill by a two-to-one ratio, and in the process rejected their own leadership, who had worked for nearly a week to craft a bill that could gain a majority. Nearly 100 Democrats also voted against the bill, spurning their leadership.

Many Republicans in the House were never persuaded that the credit crunch in the financial system is an impending disaster deserving of taxpayer aid. Politicians who had cut their teeth on free-market principles couldn't accept the idea that the federal government should back up the banks who had foolishly bet everything on the housing bubble.

Or they didn't want to face the voters in six weeks and explain why a Republican would vote for the biggest government bailout ever.

Now we shall see if Paulson and Bernanke were right when they said the credit crisis could worsen and inflict dire consequences on the global economy. Or perhaps the plan's many critics were right in saying that credit markets and home prices can adjust on their own, once the promise of free money is withdrawn.

The leaders in Congress and in the administration will undoubtedly try again, hoping to write a compromise bill that can attract a majority. But that won't be easy, because the Paulson plan had significant opposition from backbenchers on both the Republican right and the Democratic left.

Rejection of the plan means there's no political solution to this financial crisis on the horizon. As it now stands, the markets are on their own.

The next six weeks will tell whether the coup d'etat in the House on Monday has created a political crisis to match the financial one.

THE WALL STREET JOURNAL/MarketWatch

Note: It will be very difficult for McCain now to find his seat in the bus in the last couple of weeks to the elections...

What concerns me MORE is that the normal economy, the normal companies are losing ground in this quick sand....fast. They can't get hold of money anymore to finance their companies.

The dropping stocks/shares on Wall Street shows that.

Fasten your seat belts and SAVE CASH !!!

Dow 10,555.01 -588.12 (-5.28%)

Nasdaq 2,029.60 -153.74 (-7.04%)

S&P 500 1,130.91 -82.10 (-6.77%) 3.15PM EDT

LaoPo

[russianrobert]

Dow now down 722.

[LaoPo]

Sector change

Basic Materials -12.08%

Capital Goods -9.12%

Conglomerates -6.67%

Cons. Cyclical -8.51%

Cons. Non-Cyclical -4.43%

Energy -12.70%

Financial -10.52%

Healthcare -4.68%

Services -7.42%

Technology -8.81%

Transportation -6.69%

Utilities -6.33%

situation at 3.31PM EDT

Dow 10,470.18 -672.95 (-6.04%)

Nasdaq 2,010.79 -172.55 (-7.90%)

S&P 5001,118.93 -94.08 (-7.76%) 3.35PM EDT

LaoPo

[LaoPo]

OK, New York is closed and the results are as follows:

Dow 10,532.39 -610.74 (-5.48%)

Nasdaq 1,983.73 -199.61 (-9.14%)

S&P 500 1,124.22 -88.79 (-7.32%)

In a few hours the SUN will rise in the Far East...

LaoPo

[russianrobert]

I'm watching CNN and the Dow has closed down -777.68 at 10365

There will come a time with all this turmoil on the markets, banks going to the wall on a daily basis, politicians unable to grasp the situation that the markets will believe the bail out will not be enough anyway.

I believe we could be getting closer to that scenario.

Edited September 29, 2008 by russianrobert

[flying]

Interesting to read what the people are saying

Word on the street

[Naam]

OK, New York is closed and the results are as follows:

Dow 10,532.39 -610.74 (-5.48%)

Nasdaq 1,983.73 -199.61 (-9.14%)

S&P 500 1,124.22 -88.79 (-7.32%)

In a few hours the SUN will rise in the Far East...

LaoPo

and a number of Samurais are polishing their swords and daggers. who would want to commit seppuku with a rusty blade?

[Naam]

if the DOW does not bounce over 10,703, then the next stop is 10,300

asia is going to be screwed tuesday morning (as will Europe).........the trend has been and will be down

and yes LOS SET is going to circle the bowl quite soon as well

when Bingo is right he is right.