it looks like economic armagedon is coming

Author: **izzix** » September 30, 2008, 2:22 am

US Congress rejects bail-out
ITN
ITN - 26 mins ago

The US House of Representatives has rejected a $700 billion Wall Street rescue plan.
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The bail-out bill proposed by the Bush administration was defeated by 228 votes to 205.

The scheme would have given the Treasury Department up to $700 billion in buying power to acquire mortgage assets from troubled financial institutions.

In recent months, Wall Street giants like Bear Stearns and Lehman Brothers have failed while large commercial banks like Washington Mutual and Wachovia have been sold off at knock-down prices.

The bill was defeated after many Republican representatives ignored their leaders and voted against it. A majority of Democrats voted in favor of the plan.

The chairman of the House of Representatives Financial Services Committee said Republican representatives "killed this bill", adding: "We would want to see what the economic reaction is before making any decisions on future legislation."

The stock market plummeted in response to the surprised defeat, with the Dow Jones down more than 700 points at one stage.

A White House spokesman expressed disappointment and said President George W Bush would meet his economic team before deciding on the next move.

Author: **westerby** » September 30, 2008, 2:33 am

Oh dear, that's not good.

This morning people were saying that it was going to go through and now it's been rejected, just goes to show that we can't predict anything anymore when it comes to the markets (or could we ever?).

IMHO: what it does mean is that McCain will not be the next President because I believe the US population will blame the Republicans for failing to bail out the economy.

What do the Forum Yanks think? :-k

Author: **dbriggins** » September 30, 2008, 2:54 am

I think it's interesting that Democrats blame Republicans for the defeat, when Democrats hold the majority in the house and Senate. The Dems could pass this on their own, but over 40% of their own members voted against it. So who is really to blame, the minority party, or the party in control? Are the Dems saying they really don't control Congress? If so, then who does?

What will the economic fallout be? That is the question of the day, and is really at the root of why the bill failed: Because there are no hard and fast rules about economics, no one can really say what will happen, just like they really couldn't say if this would work. But the more the press drums into our heads that this is "Bad" then that is what will happen. This is about confidence (or the lack of it) and perception. People are afraid, and frightened people do stupid things.

My question for all you expats in Thailand: How will this affect you? As Western economies fail, how will it affect your lot in the LOS?

Author: **Ivor Hardy** » September 30, 2008, 3:16 am

westerby wrote:
What do the Forum Yanks think?

yanks and think in the same sentence hmmmm :-k

Author: **westerby** » September 30, 2008, 3:22 am

dbriggins wrote:But the more the press drums into our heads that this is "Bad" then that is what will happen. This is about confidence (or the lack of it) and perception. People are afraid, and frightened people do stupid things

I couldn't agree more, shares in the Royal Bank of Scotland dropped by 20% today because of some vague rumour about a link to Fortis in Europe - totally unfounded. Whatever happens, tomorrow's going to be a really interesting day.

Author: **WBU ALUM** » September 30, 2008, 3:24 am

Democrats could have passed it alone with their simple majority numbers, but what that article doesn't say is that almost 90 Democrats voted "no" also, which is about 20% of the total House vote.

The Democrat Party leadership couldn't even convince their own that it was a good bill. Mainstream America is ringing the phones off the hook and faxing their congressmen. They don't like the plan.

Author: **WBU ALUM** » September 30, 2008, 3:34 am

dbriggins wrote:I think it's interesting that Democrats blame Republicans for the defeat, when Democrats hold the majority in the house and Senate. The Dems could pass this on their own, but over 40% of their own members voted against it. So who is really to blame, the minority party, or the party in control? Are the Dems saying they really don't control Congress? If so, then who does?

It has been apparent through press conferences in the US since the weekend that the Democrats did not want to pass it alone and be blamed for it if it didn't work. That tells me that the bill isn't so hot at the start, or they would have and could have passed it without Republican support.

Author: **Bandung_Dero** » September 30, 2008, 5:50 am

TTF Common sense is prevailing. I for one do not want to see a public bail out, "Golden Parachutes" and the like.

Republicans - Democrats are both divided on this issue and it would appear that main stream Americans are unsure as well so IMHO all should step back, take a deep breath and do some serious thinking not just throw a heap of cash into a black hole.

OK, I'm hurting like most of you but prepared to ride the storm.

Edit; "economic armagedon" :yikes:

I wouldn't go as far as to say that!

Author: **docta** » September 30, 2008, 6:30 am

Hello all,
Lately criminal activity in Thai against farangs seems to have been on the rise.
Does anyone have an idea what the current economic effect might have on the possibility of increased criminal activity, specifically, home break-ins?

Author: **WBU ALUM** » September 30, 2008, 6:42 am

Here is the party breakdown on the vote in the US House of Representatives.

- Voting yes were 140 Democrats and 65 Republicans.
- Voting no were 95 Democrats and 133 Republicans.

There is one vacant seat in the 435 member House and one not voting.

The House may not be back in session until Thursday. The Senate may take up the matter sooner and work on a plan to hand off to the House, but this particular matter will have to go for a vote in the House before any Senate vote can be a matter of record.

Author: **sgt** » September 30, 2008, 6:51 am

As bad as the market reacted, and it was predicted that was what would happen if the bill failed, it is still best that the bill as it was failed to pass. There will be a bill to help out with the financial crisis, it won't please everybody and will probably still help the fat cats much more than the average American. The bill that failed gave the present regime far to much control to help out their fat cat buddies. In the Secretary Paulsen presented bailout plan (surely at least partly penned by David Addington), there is the power-grab clause 8a which tells Congress that is has no active part in handling the nation’s purse strings, and tells the Judicial branch it has no power over executive office decisions. And no, I don't like the cowardly Democrats either.

The "bailout" plan will happen, it has to and even the idiots in congress know it, they just had enough sense (make that phone calls and emails) to stop this particular version.

Author: **Tilokarat** » September 30, 2008, 7:16 am

This was very interesting viewing. As the vote approached the number required to defeat the bill, the Toronto Stock Exchange and the Dow sank faster and faster. At this point both of them were about 700 in the red. The Dow 'recovered' to negative 400 for awhile and then sank again. The TSX fell 850 points in the day.

The political and economic analysts I listened to, on the Canadian News Channel, pointed out that the Democrats were very divided over the 'bailout', and it could have passed if the party had been united. Economically, the analysts explained that this was not simply a 'bailout' for the rich. They said that unless the U.S. banks had liquid assets, and could make loans, not only the United States was in trouble, but so was the world. One last point that I did not catch completely is that Asian countries could call in loans they had made to the United States, and destroy the U.S. economy. In particular, they pointed to China who had helped the United States during the recent conflict in Iraq. One reason provided for Bush not increasing taxes for the intervention in Iraq is that China provided funding. I am not an economist and do not fully understand the role of China in all of this.

The consensus seemed to be that a 'deal' would be worked out politically to satisfy disgruntled Democrats and Republicans who voted against the Bill. The warning was that the world is headed for disaster unless a solution is found to this crisis. Blame was accorded politicians who did not understand the political ramifications of their voting against the 'bailout'.

Author: **bigwavedave** » September 30, 2008, 9:58 am

WBU ALUM wrote:Democrats could have passed it alone with their simple majority numbers, but what that article doesn't say is that almost 90 Democrats voted "no" also, which is about 20% of the total House vote.

The Democrat Party leadership couldn't even convince their own that it was a good bill. Mainstream America is ringing the phones off the hook and faxing their congressmen. They don't like the plan.

There you go!!! yes Dems could vote this through and then the reps will blame the dems for spending 700bn... You think people are stupid enough to believe otherwise?? So the dems have said we will vote for it provided a majority of reps do... the figure is 80-100 reps must vote for it... oh and when does a few phonecalls from the electorate represent a majority of the electorate?? Unless you are a republican that is!!! Leadership is needed here the reason these people are elected is to show leadership that maybe sometimes they have to make contoversial decisions, but thats one of the perks of leadership....
So the last administration messes the whole economy on a globally catastrophic size and now want to blame the dems for it!!! and let the dems take the fall if this bailout doesnt work!!!! yeah right!!!

Author: **lighspur1** » September 30, 2008, 11:05 am

The warning was that the world is headed for disaster unless a solution is found to this crisis.

Then why don't the world divy up and bail wall street and the banks out? I am against the bail out, let the chips fall wherever. Why bail out the banks and wall street so they can just lend more money to people and institutions that already can't pay their debts? They said the bail out comes to roughly 85 thousand for every man, woman, and child in the US. I have about 20 grand in the stock market I assume I will lose about half if it crashes, thats like spending 85 grand to save 10 for me, not worth it. Let it crash and we will start over. John Doe down the street will still lose his house if he don't pay his mortgage its just that the banks won't lose any on him. Screw em all !!! Its all circling the drain anyway the bail out will only be a bandage to hold it off for little while. The world is headed for disaster if the U.S. stops spending and borrowing? Sounds like the world needs a different approach to its economy than sucking off the U.S. the cash cow has dried up.

Author: **bigwavedave** » September 30, 2008, 11:21 am

"Sounds like the world needs a different approach to its economy than sucking off the U.S. the cash cow has dried up."

Erm the Us borrows over 500bn dollars from china and other countries are sucking off the economy of us???? You people need to pray for a miracle and that miracle being china and all the other creditors including saudi arabia who OWN 7% of USA dont call in their loans, because George Bush will be famous for taking over the most rich and powerful country on earth and handing over a country that is fast going down the drain....
I think the bailout is wrong however im not too narrow minded to believe that it is needed... i dont think people realise what is going on here if this bail out doesnt happen!!! Just one example, do you think with the us economy crippled that the us can afford 10bn a month for the troops in iraq? if not what do you do about it??? Do you think the US can afford to repay the loans to the rest of the world?? then what??? especially if as i said china calls them in today??
Oil has dropped to 95 $ a barrell, is this going to have an effect on the US economy???
So i agree in principle let the greedy f@ckers suffer in Wall Street, but i believe unfortunately that a bail out of sorts is needed. and why shoulod the rest of the world bail out Bush??? He did this with buddies in the boys club... his mess he should clean it up, in my opinion...

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