The quickest signing ever!
George W Bush has signed the $700 billion bailout bill into law within an hour of the House of Representatives passing it 263 to 171. I guess he didn’t want to risk them changing their minds!
26 Republicans and 32 Deomcrats who voted no last time, voted yes this time.
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Tags: Credit Crisis, George W Bush, US House of Representatives
October 4th, 2008 at 8:53 am
I wonder when he’ll do a signing of the Indian-US nuclear cooperation treaty? After the election is my guess.
October 4th, 2008 at 9:07 am
Do you happen to know whether anyone mentioned John Key in Congress?, and his part in Wall Streets downfall.
He used to work for Merril Lynch you know!
And had he been PM at the turn of the last Century, then 10′s of millions of Kiwis would have come back in body bags from overseas fields.
Comparitively that would equate to 60 body bags from Iraq apparently?
October 4th, 2008 at 9:51 am
Both of these are very good.
http://www.marketoracle.co.uk/Article6598.html – recapitalising banks with gold
http://www.marketoracle.co.uk/Article6597.html – Q&A – recommend you get the full article from EWI – free
October 4th, 2008 at 10:28 am
It was interesting to see the final vote for the bill, the ayes made up of 172 Dems and 91 Republicans.
So if this whole “bailout” turns to crap – it’s the Decramastics fault.
October 4th, 2008 at 1:09 pm
I read an excellent opinion today that this won’t change a thing. If the world is in a recession, who are the banks going to lend to? They went on to state that rather than wasting money “bailing out” banks they should provide a mechanism to help small businesses that will fail because of cashflow problems because the banks don’t want to lend to anyone. To my mind, a much smarter solution.
October 4th, 2008 at 1:16 pm
If the world is in a recession, who are the banks going to lend to?
Banks lend money in a recession.
They went on to state that rather than wasting money “bailing out” banks they should provide a mechanism to help small businesses that will fail because of cashflow problems because the banks don’t want to lend to anyone.
So the government would be lending money instead of the banks?
October 4th, 2008 at 2:03 pm
Of course they do, just not to small businesses who don’t have lots of assets.
Isn’t that effectively what they’re doing by backing banks lending or nationalising banks? Nationalised banks are getting very popular. And if all banks get government guarantees, then everything is back to where it started except then people will move their money based on the financial statements of the countries that are backing them. We could get countries going bankrupt.
Here’s the quote from moneyweek
The reason this “bail out” plan is being forced upon millions of taxpayers is to add liquidity to the money market. However as the values of all assets are dropping banks restrict their lending. If you don’t have anything to borrow against, like most small businesses, well you’re pretty screwed and if you can’t get a loan with cashflow then often good businesses will fold. So why is the government giving the money to the banks when it could do it straight to small businesses? I’m against the bail out but if you’re going to have one, why save the banks that propogated it?
October 4th, 2008 at 2:12 pm
Well when Wrightsons gets turned down for a loan to buy SilverFern Farms, it’s not just small businesses that the banks are refusing.
Does anyone know what the final format of the package was in respect to the price they’ll pay for the toxic debts? Someone said last week on Sunday Business that if they buy those debts at cents in the dollar rather than at full price, then the banks aren’t going to be re-capitalised anyway so the situation will continue.
October 4th, 2008 at 2:29 pm
Of course they do, just not to small businesses who don’t have lots of assets.
You can’t think straight. The article is referring to banks not lending money to SMEs due to a lack of available cash whereas your original point was that Banks will not lend money when the economy is in recession (ie shrinking). The two situations are not the same and so your original comment was a complete load of bollocks.
Isn’t that effectively what they’re doing by backing banks lending or nationalising banks?
If the bailout is effectively the same as backing banks lending or nationalising banks then why are you saying that the bailout won’t work but the government lending money will? Why are you whining about the bailout given that you are not an american taxpayer?
Nationalised banks are getting very popular.
An article about Gordon Brown’s stupidity is not evidence that Nationalized banks are getting very popular.
October 4th, 2008 at 6:34 pm
In spite of all the moralising coming from all around the world about “Wall Street greed” and so on, this problem is just as bad or worse elsewhere.
DEMOGRAPHIA: “England’s Mortgage Bailout”
http://demographia.blogspot.com/2008/09/englands-mortgage-bailout-high-cost-of.htm
“The Daily Telegraph in London reports that the government bailout of mortgage lender Bradford and Bingley will raise the exposure of the United Kingdom taxpayers to £150 billion (nearly $300 billion). Overall, this is approximately $5,000 per capita, considerably more than the $3,000 per capita United States taxpayer exposure likely after the nearly $800 billion in bailouts, including AIG and the proposed congressional package.
It may be surprising that the cost in the UK would be competitive, much less higher than in the United States, until the causes are analyzed. Surely, US lenders appear to have been more profligate with their (and now taxpayers’) money than UK lenders. Yet the bloated prices have started to fall, as prices begin to return to reality.
Lending profligacy was only the start of the problem. Blame town planning, or what is called “smart growth” in the United States…….
“……..In these markets, land use policies limited the amount of land available for development, interfered with the competitive pricing of land for development and otherwise increased costs. The smart growth markets, while accounting for only 30 percent of the population, represented more than 85 percent of the housing price increases. Without smart growth, the financial crisis might well have been handled in the United States without government intervention.
The British are not so lucky. Because of the Town and Country Planning Act of 1947 and its subsequent administration, the entire nation is victimized by smart growth style policies that simply do not allow enough houses to be built. Last year, British house construction fell to the lowest level since World War II, and has dropped 30 percent just since 1992. This is barely one-third of the level required in the nation……”
Wall Street Journal Editorial:
“Bailing Out Europe”
http://online.wsj.com/article/SB122298413104999705.html
“This week’s cover of Der Spiegel shows the Statue of Liberty’s torch extinguished, under a headline “The Price of Hubris.” Even as the magazine published this latest eulogy for American power, the Continent turned out to have more banking problems than Wall Street. Now we’ll see if “Europe,” in the governing rather than geographical sense, can handle a genuine financial panic.
European governments this week rushed to rescue several of their overleveraged financial institutions as the money markets seized up. The euro’s fall of about 5% against the dollar in recent days shows that investors are more worried about the Old Continent than the New World. Europe is learning that financial turmoil is no zero-sum game. America’s loss isn’t Europe’s or anyone else’s gain. The credit mania was a global phenomenon and its aftermath requires global responses….”
HA.
“…….The most dramatic intervention occurred in Ireland, where the government guaranteed for two years all deposits, bonds, senior debt and lower Tier-II debt of six Irish financial institutions. British depositors are already flocking to the Irish banks to take advantage of the unlimited guarantee, putting pressure on London to do something similar. This is one of the drawbacks of separate national responses — it creates “depository arbitrage” and gives some banks a competitive advantage.
If successful in staving off a panic, the Irish move may cost nothing or even bring in some cash from the fees banks must pay for the guarantee. But total taxpayer exposure is €450 billion to €500 billion, or well more than twice Ireland’s GDP…..”
OOUUCH.
INTERESTING…….NZ shares with Ireland and England, “Smart Growth” (Dumb Strangulation would be a better description)
policies that have led to the greatest disparities in the world between our incomes and our property values. So more than likely we are in our own domestically-originated crunch as well as the effects of the international crisis.
Here is Hugh Pavletich; “Housing: Taking a Bubble Bath To Reality”
http://www.scoop.co.nz/stories/BU0809/S00584.htm
“……In New Zealand, with a population of just 4.3 million, where around 32 finance companies have failed to date, “planner developers” are experiencing some considerable difficulties, as illustrated with “Kensington Park”, “$450m housing project crashes – 22 Sep 2008 – NZ Herald: New Zealand National news”. The developers letters to “owners” and “contractors” make for those not familiar with “development reality” – instructive reading as well. Understandably New Zealand is in recession as outlined within the UK Financial Times article “New Zealand falls into first recession in 10 years” . This has been a “phony boom” – fueled in large measure by a housing bubble…..
“……..The “bubble problem” of the United States is not as severe as it is in most other Anglo countries – as illustrated by this year’s 4th Annual Demographia International Housing Affordability Survey – with Canada’s overall Median Multiple 3.1; United States 3.6; Republic of Ireland 4.7; United Kingdom 5.5; Australia and New Zealand 6.3………
“…….Policymakers in both Australia and New Zealand chose instead to ignore the significance of “housing bubbles”, allowing these bubbles to further inflate – and collapse. They will therefore need to be prepared to deal with the consequences – in social, political and economic terms going forward.
They will soon learn too – that Governments and Reserve Banks do not have the capacity to arrest the necessary adjustments of these housing bubbles.
The only questions policymakers will need to ask themselves going forward is – (a) to what extent are they going to dither compounding problems and allow the residential construction sectors to collapse – and (b) – when do they intend to allow for the supply of affordable land on the urban fringes, coupled with appropriate debt financing of infrastructure, so that housing at or below three times annual household income can be built…….”
We are in a distressing “bind”. Our governments do not WANT us to have affordable housing because it is the inflation in property values that is making the long-term-property-owning majority FEEL “wealthy” and is giving them collateral for credit-based spending. How can the reality be communicated to people? The Achilles heel of Democracy is apparent, we are “dumbing” ourselves to destruction.
October 4th, 2008 at 6:48 pm
Reports circulating in the Kremlin today are stating that the first deployment of China’s elite People’s Armed Police (PAP) under an agreement signed between the United States and China, and as we had previously reported on in our September 20th report “US Homeowners Soon To Be Evicted By Chinese Police Under New Law”, have arrived in America and begun to deploy to protect Chinese assets in this now insolvent First-World country.
Unbeknownst to the American people, however, is that since September 20th, the $700 billion bailout bill signed into law by their President yesterday was expanded from its original 3 pages to a 451 page virtual novel of new laws virtually enslaving them to the foreign holders of their debt.
Even more disturbing, these reports continue, are that these new laws not only give Chinese and European banks control over the mortgage debt of the American people, they now include their credit card balances, and which virtually the entire US populace have indebtedness to.
http://www.websitetoolbox.com/tool/post/shnvswr/vpost?id=3014407
October 4th, 2008 at 7:11 pm
Democratic Congressman: Representatives Were Threatened With Martial Law In America Over Bailout Bill
http://www.websitetoolbox.com/tool/post/shnvswr/vpost?id=3013798
October 4th, 2008 at 8:01 pm
… to be distinguished from the quickest phone call ever by W Peters to B Henry (< 1 nanosecond)
October 5th, 2008 at 11:26 am
No, my original question was who will banks lend to? And my rhetorical answer was not to small businesses. So if taxpayers as a whole are bailing out banks which aren’t going to help the “real” economy grow, which will get countries out of the mire they’re in, then the “bail out” is hitting the wrong target. Like the article I quoted said, how about a special liquidity scheme for small businesses, rather than propping up banks just to prop them up. I’m not saying I’m right, I’m putting it out there. Also, if you read the article, National Rock is having to limit the opening of new savings accounts because they’re becoming so popular that it will breach their government imposed competitive limits. Money from the UK is flooding to Ireland because the government has guaranteed their banks.
You don’t know what countries I pay tax in, so I’m not sure why I’m not allowed to ask questions/”whine” about the bail out situation. Have you even got an opinion on the bailout?
October 6th, 2008 at 12:03 pm
Simple
The big issue today is banks aren’t lending to each other. So. Banks will lend to banks, and everyone else can go to hell. That way they get triple A asset ratings, on large volume, and are able to give themselves exceptional bonuses.
QED