Market News

[Guest2]

So, the senate is going to vote on the "rescue" plan Wednesday night, 1 Oct.

If this thing passes, it's going to be a monster of a market rally come Thursday.

From your mouth to God's ears. So let it be written, so let it be done !
(10 Commandments Reference - Yul Brenner)

 

[JOVARN]

OMG is that really a cat?

 

[Rod]

From your mouth to God's ears. So let it be written, so let it be done !
(10 Commandments Reference - Yul Brenner)

I've been in (G) since late Jan, and am tempted from the "fruit" of another.

I don't believe I am going to bite though, prior to noon tomorrow.

One just never knows how the senate may handle this thing. Although I do believe they will pass something, but with reluctance.

I'm just not willing to take that gamble... yet.

 

[wv-girl]

So, the senate is going to vote on the "rescue" plan Wednesday night, 1 Oct.

If this thing passes, it's going to be a monster of a market rally come Thursday.

What about the House.. Don't they vote also?

 

[James48843]

My heavens...

It looks like that Kitten Currency idea is catching on. Late this afternoon, it even made it over to the White House, where they ran it by the Commander in Chief....


When they asked him what he thought about changing the currency from U.S. Dollars to KITTENS.....he took one look, and then said.....

(Photo of the President, checking the metallic content of the new currency).

Mmm..... taste like chicken.

 

[ATCJeff]

Even better kitten

 

[DoughBoy]

There's a cat in that picture? hehe!

 

[Rod]

What about the House.. Don't they vote also?

Who knows when... I've heard Thursday.

But the market is hungry for anything at this point... so the senate may deliver Wednesday then bring it to the floor Thursday.

 

[wv-girl]

I've been in (G) since late Jan, and am tempted from the "fruit" of another.

I don't believe I am going to bite though, prior to noon tomorrow.

One just never knows how the senate may handle this thing. Although I do believe they will pass something, but with reluctance.

I'm just not willing to take that gamble... yet.

I'm hesitant also. What happens when it is realized that this really is only a very short term fix? And that we are still going to see everything 'tightening up' and costing more?

 

[budnipper1]

Who knows when... I've heard Thursday.

But the market is hungry for anything at this point... so the senate may deliver Wednesday then bring it to the floor Thursday.

Senate to vote on financial rescue plan on Wed.
By CHARLES BABINGTON and JIM KUHNHENN, Associated Press Writers 7 minutes ago


In a surprise move to resurrect President Bush's $700 billion Wall Street rescue plan, Senate leaders slated a vote on the measure for Wednesday — but added a tax cut plan already rejected by the House.
Majority Leader Harry Reid, D-Nev., and GOP Leader Mitch McConnell of Kentucky unveiled the plan Tuesday. The Senate plan would also raise federal deposit insurance limits to $250,000 from $100,000, as called for by the two presidential nominees only hours earlier.
The move to add a tax legislation — including a set of popular business tax breaks — risked a backlash from House Democrats insisting they be paid for with tax increases elsewhere.
But by also adding legislation to prevent more than 20 million middle-class taxpayers from feeling the bite of the alternative minimum tax, the step could build momentum for the Wall Street bailout from House Republicans. The presidential candidates Sens. John McCain, R-Ariz., and Barack Obama, D-Ill., intend to fly to Washington for the votes, as does Sen. Joe Biden of Delaware, the Democratic vice presidential candidate.
The surprise move capped a day in which supporters of the imperiled multibillion-dollar economic rescue fought to bring it back to life, courting reluctant lawmakers with a variety of other sweeteners including the plan to reassure Americans their bank deposits are safe.
Wall Street, at least, regained hope. The Dow Jones industrials rose 485 points, one day after a record 778-point plunge following rejection in the U.S. House of the plan worked out by congressional leaders and the Bush administration.
Before Reid and McConnell's move, lawmakers, President Bush and the two rivals to succeed him all rummaged through ideas new and old, desperately seeking to change a dozen House members' votes and pass the $700 billion plan.
The tax plan passed the Senate last week, on a 93-2 vote. It included AMT relief, $8 billion in tax relief for those hit by natural disasters in the Midwest, Texas and Louisiana, and some $78 billion in renewable energy incentives and extensions of expiring tax breaks. In a compromise worked out with Republicans, the bill does not pay for the AMT and disaster provisions but does have revenue offsets for part of the energy and extension measures.
That wasn't enough for the House, which insisted that there be complete offsets for the energy and extension part of the package.
The Senate move seems aimed at jamming the House into accepting the deficit-financed tax cuts. Conservative Democrats won't like the idea, but some Congress-watchers suspect most Democrats might be willing to go along.
Still, the House is where the problems are, and leaders there were scrounging for ideas that might appeal to a few of the 133 Republicans and 95 Democrats who rejected the proposal on Monday.
Senate Banking Committee Chairman Christopher Dodd, D-Conn., told reporters, "I'm told a number of people who voted 'no' yesterday are having serious second thoughts about it." He added, however, "There's no game plan that's been decided."
The idea drawing the biggest support was to raise the federal deposit insurance limit, now $100,000 per account, to $250,000. Several officials, along with both presidential nominees, endorsed the change.
So did the agency that runs the program.
Within hours of the candidates' separate statements, Federal Deposit Insurance Corp. chairman Sheila Bair asked Congress for temporary authority to raise the limit by an unspecified amount. That could help ease a crisis of confidence in the banking system, Bair said.
She said the overwhelming majority of banks remain sound but an increase in the cap would help ease a crisis of confidence in the banking system as well as encourage banks to begin more lending.
Other ideas include extending unemployment insurance benefits, typically a Democratic goal, but one that appeals to some Rust Belt Republicans. Another Democratic-backed idea would double the property tax deduction taken by people who do not itemize their taxes. And another calls for more spending on transportation infrastructure projects, which would create more jobs. Budget hawks in both parties might object, however.

Monday's House vote was a stinging setback to leaders of both parties and to Bush. The administration's proposal, still the heart of the legislation under consideration, would allow the government to buy bad mortgages and other deficient assets held by troubled financial institutions. If successful, advocates of the plan believe, that would help lift a major weight off the already sputtering national economy.
But the proposal ignited furious responses from thousands of Americans, who flooded congressional telephones. The House voted 228-205 against the plan. Some lawmakers reported a shift in constituent calls pouring into their offices Tuesday after the record stock market decline. Many callers, they said, want Congress to do something without "bailing out Wall Street."
Bush renewed his efforts, speaking with McCain and Obama and making another statement from the White House. "Congress must act," he declared.
Though stock prices rose, more attention was on credit markets. A key rate that banks charge each other shot higher, further evidence of a tightening of credit availability.
Bush was talking about everyday Americans on Tuesday, not banks or other financial institutions. And no supporters were using the word "bailout."
The president noted that the maximum $700 billion in the proposed bill was dwarfed by the $1 trillion in lost wealth that resulted from Monday's stock market decline.
"The dramatic drop in the stock market that we saw yesterday will have a direct impact on retirement accounts, pension funds and personal savings of millions of our citizens," Bush said. "And if our nation continues on this course, the economic damage will be painful and lasting."
Republicans said the FDIC proposal might attract lawmakers on the left and right who want to help small business owners and avert runs on banks by customers fearful of losing their savings.
Another possible change to the bill would call on regulators to modify "mark to market" accounting rules. Such rules require banks and other financial institutions to adjust the value of their assets to reflect current market prices, even if they plan to hold the assets for years.
Some House Republicans say current rules forced banks to report huge paper losses on mortgage-backed securities, which might have been avoided.
There was a note of irony in that proposal. One Republican familiar with the discussions conceded it amounted to step toward deregulation at a time when Obama, McCain and House members in both parties are clamoring for greater controls on the financial industry.
The rescue package was Topic A on the presidential campaign trail.
"The first thing I would do is say, 'Let's not call it a bailout. Let's call it a rescue,'" McCain told CNN. He said, "Americans are frightened right now" and political leaders must give them an immediate solution and a longer-term approach to the problem.
Obama issued a statement saying that significantly increasing federal deposit insurance would help small businesses and make the U.S. banking system more secure as well as restore public confidence. The bill's defeat in the House came despite furious personal lobbying by Bush and support from House leaders of both parties. But ideological groups on the left and the right organized against it. Even pressure in favor of the bill from some of the biggest special interests in Washington, including the U.S. Chamber of Commerce and the National Association of Realtors, could not sway enough votes.
http://news.yahoo.com/s/ap/20081001/ap_on_bi_ge/financial_meltdown



​

 

[Show-me]

Jeff,

I don't mind you post pics of one of my cats, but my wife is were I draw the line. Please stop now!

 

[ATCJeff]

Jeff,

I don't mind you post pics of one of my cats, but my wife is were I draw the line. Please stop now!

Sorry, but maybe you should ask her not to come by! She's very photogenic.

 

[350zCommTech]

Senate to vote on financial rescue plan on Wed.
By CHARLES BABINGTON and JIM KUHNHENN, Associated Press Writers 7 minutes ago


In a surprise move to resurrect President Bush's $700 billion Wall Street rescue plan, Senate leaders slated a vote on the measure for Wednesday — but added a tax cut plan already rejected by the House.

​

Financial rescue plan? Economic rescue plan? This is just the same BS, Paulson's looting of America plan with a tax cut thrown in to keep the dumb public happy. I guess I'll start greasing the old fax machine.

 

[Birchtree]

This old dumb member of the public would be very satisfied with a permanent tax reduction plan - I could support a number of mortgage payers with what I'll pay in taxes next year - where is my break. Allah, I didn't even get a stimulus check because my AGI was too high.

 

[Show-me]

I will be having a talk with her later.

 

[amoeba]

I'm hesitant also. What happens when it is realized that this really is only a very short term fix? And that we are still going to see everything 'tightening up' and costing more?

I couldn't care less about the senate; it's pretty much a foregone conclusion that they have the votes anyway. The house won't pass it.

Better save your kittens!

 

[Show-me]

I couldn't care less about the senate; it's pretty much a foregone conclusion that they have the votes anyway. The house won't pass it.

Better save your kittens!

Senators get elected by popular vote too, I reminded one of mine of that come 2010 and he better be listening.

 

[budnipper1]

Financial rescue plan? Economic rescue plan? This is just the same BS, Paulson's looting of America plan with a tax cut thrown in to keep the dumb public happy. I guess I'll start greasing the old fax machine.

Bailout Politics
The Congressional Dems who enabled this crisis are now being trusted to fix it?
By Thomas Sowell

Nothing could more painfully demonstrate what is wrong with Congress than the current financial crisis.

Among the Congressional “leaders” invited to the White House to devise a bailout “solution” are the very people who have for years created the risks that have now come home to roost.

Five years ago, Barney Frank vouched for the “soundness” of Fannie Mae and Freddie Mac, and said “I do not see” any “possibility of serious financial losses to the treasury.”

Moreover, he said that the federal government has “probably done too little rather than too much to push them to meet the goals of affordable housing.”

Earlier this year, Senator Christopher Dodd praised Fannie Mae and Freddie Mac for “riding to the rescue” when other financial institutions were cutting back on mortgage loans. He too said that they “need to do more” to help subprime borrowers get better loans.

In other words, Congressman Frank and Senator Dodd wanted the government to push financial institutions to lend to people they would not lend to otherwise, because of the risk of default.

The idea that politicians can assess risks better than people who have spent their whole careers assessing risks should have been so obviously absurd that no one would take it seriously.

But the magic words “affordable housing” and the ugly word “redlining” led to politicians directing where loans and investments should go, with such things as the Community Reinvestment Act and various other coercions and threats.

The roots of this problem go back many years, but since the crisis to which all this led happened on George W. Bush’s watch, that is enough for those who think in terms of talking points, without wanting to be confused by the facts.

In reality, President Bush tried unsuccessfully, years ago, to get Congress to create some regulatory agency to oversee Fannie Mae and Freddie Mac.

N. Gregory Mankiw, his Chairman of the Council of Economic Advisers, warned in February 2004 that expecting a government bailout if things go wrong “creates an incentive for a company to take on risk and enjoy the associated increase in return.”

Since risky investments usually pay more than safer investments, the incentive is for a government-supported enterprise to take bigger risks, since they get more profit if the risks pay off and the taxpayers get stuck with the losses if not.

The government does not guarantee Fannie Mae or Freddie Mac, but the widespread assumption has been that the government would step in with a bailout to prevent chaos in financial markets.

Alan Greenspan, then head of the Federal Reserve System, made the same point in testifying before Congress in February 2004. He said: “The Federal Reserve is concerned” that Fannie Mae and Freddie Mac were using this implicit reliance on a government bailout in a crisis to take more risks, in order to “multiply the profitability of subsidized debt.”

Chairman Greenspan added his voice to those urging Congress to create a “regulator with authority on a par with that of banking regulators” to reduce the riskiness of Fannie Mae and Freddie Mac, a riskiness ultimately borne by the taxpayers.

Fannie Mae and Freddie Mac do not deserve to be bailed out, but neither do workers, families and businesses deserve to be put through the economic wringer by a collapse of credit markets, such as occurred during the Great Depression of the 1930s.

Neither do the voters deserve to be deceived on the eve of an election by the notion that this is a failure of free markets that should be replaced by political micro-managing.

If Fannie Mae and Freddie Mac were free market institutions they could not have gotten away with their risky financial practices because no one would have bought their securities without the implicit assumption that the politicians would bail them out.

It would be better if no such government-supported enterprises had been created in the first place and mortgages were in fact left to the free market. This bailout creates the expectation of future bailouts.

Phasing out Fannie Mae and Freddie Mac would make much more sense than letting politicians play politics with them again, with the risk and expense being again loaded onto the taxpayers.



http://article.nationalreview.com/?q=OWE3OWU3OTExYzNlNTUzMzY2YmJmOWZjMzcwN2M1NjU=
​

 

[Birchtree]

Excellent read - good to get a little back up.

 

[budnipper1]

Excellent read - good to get a little back up.

I always find it difficult to disagree with anything Sowell says. Wish we could get Washington to pay attention to him.