The news is currently breaking that the House failed to pass the bailouot plan.
What was supposed to be a 15-minute vote stretched past the half-hour mark as leadership scrambled for support. Investors who had been counting on the rescue plan sent the Dow Jones industrial average down as much as 700 points while watching the measure come up short of the necessary support, before rebounding slightly. The key stock reading was down more than 500 points.
The vote:
The measure needs 218 votes for passage. Democrats voted 141 to 94 in favor of the plan, while Republicans voted 65 to 133 against. That left the measure with 206 votes for and 227 against.
As I understood the news this morning, this is an unexpected result.
More later.
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September 29th, 2024 at 4:06 pm
Unexpected, but good one nonetheless.
September 29th, 2024 at 5:53 pm
I’m rarely correct in my predictions, but I sensed there was no deal and this, along with the nursery rhythm Humpty Dumpty, that says, “All the kings horses and all the king’s men, couldn’t put Humpty together again,” inspired this song:
Everything is Fallin’ Apart
Dr BLT
words and music by Dr BLT copyright 2024
http://www.drblt.net/music/EveryThingIsDemo2.mp3
This is from the album, Lipstick: Soundtrack for the Presidential Election 2024. Stay “tuned” at:
http://www.drblt.net
September 30th, 2024 at 1:26 pm
What strikes me the most about this affair as it has played out so far, is that it is Tuesday, there is no bailout, and the sky has not fallen.
We were all told – and it isn’t just the Bush administration this time that has bullied us, but the Senate’s banking committee and also the House Majority Leader – that the economic world would end if a bailout wasn’t in place by the time the Asian markets opened on Sunday night.
Well, lo and behold, the Asian markets opened, the deal is dead in the water for who-knows-how-long, and the world has marched on. The dow lost 6% (which is utterly insignificant in comparison to many other single day losses it has suffered in history), more than half of which has been made back as I write this on Tuesday. Whoop-de-friggin-do.
Thank God for bi-cameral legislature, and for the representatives who had the guts to resist the doomsday pressures applied to them and vote NO on this atrocious plan.
September 30th, 2024 at 1:32 pm
I think that there is some validity to the “they cried wolf” charge, but have refrained from fully buying into that narrative until I see what the markets do when there is no hope whatsoever of some kind of bailout package. At the moment it seems that the markets are still operating under the assumption that something will be implemented.
October 2nd, 2024 at 10:56 am
I expect *some* drop; the bailout was basically a $750 injection into the financial elites. I roughed it out, assuming that it was:
50% right into their pockets,
50% ‘wasted’ on activities to make it look like it wasn’t just going straight into the pockets of the elites,
that the normal profits of financial firms was 20% of revenues,
that the financial sector was 20% of the economy,
and finally, that the US economy was ~ $13 trillion per year.
$13 trillion * 0.2 *0.2 = $ 0.52 trillion profits per year = $520 billion.
50% of 750 billion = $375 billion.
375/520 = 0.72.
At a minimum, the bailout would be handing Wall Street and other financial elites the equivalent 8 months of profit in a regular year. All between Oct 2024 and Jan 2024 (unless you think that they’re stupid enough not to spend it all while it’s totally under their control).
Now, in addition to this there’s the likely Obama administration bailout, which would probably still be necessary because (a) the Bush bailout would be largely wasted, and (b) the elites would obviously like more free montey, and have the clout to get it, even under a Democratic administration and Congress, and (c) the Bush bailout would have set a political precedent.