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Thread: House rejects bailout plan, stocks take major tumble

  1. #1
    Friend of Gossip Rocks! buttmunch's Avatar
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    Default House rejects bailout plan, stocks take major tumble

    The US House of Representatives has voted down a $700bn (380bn) plan aimed at bailing out Wall Street.

    The rescue plan, a result of tense talks between the government and lawmakers, was rejected by 228 to 205 votes in the House of Representatives.

    About two-thirds of Republican lawmakers refused to back the rescue package, as well as 95 Democrats.

    Wall Street shares plunged at the news; the benchmark index saw its biggest daily points fall ever, down 770.

    A White House spokesman said that President George W Bush was "very disappointed" by the vote's result.

    Mr Bush later met Treasury Secretary Henry Paulson to discuss the way forward, and was also scheduled to hold talks with Federal Reserve Chairman Ben Bernanke.

    Speaking later on the White House lawn, Mr Paulson said the government's plan to address the crisis facing the US financial sector was much too important to be allowed to fail.

    US regulators would use "all the tools available" to help the US economy, but their powers were "insufficient", he warned.

    He added that he would be working with congressional leaders to get something done "as quickly as possible".

    Monday's vote followed a day of turmoil in the financial sector.

    * Wachovia, the fourth-largest US bank, was bought by larger rival Citigroup in a rescue deal backed by US authorities
    * Benelux banking giant Fortis was partially nationalised by the Dutch, Belgian and Luxembourg governments to ensure its survival
    * The UK government announced it was nationalising the Bradford & Bingley bank
    * Global shares fell sharply - France's key index lost 5%, Germany's main market dropped 4% while US shares plunged after the vote result was announced.

    'Global contagion'

    As news of the vote came through, traders on the floor of the New York Stock Exchange stood dumbfounded.

    Analysts say that without a bail-out plan, the banks will be left to handle all their own bad mortgage debt as best they can and more of them will be in danger of going bust.


    A trader rubs his face as he works on the floor of the New York Stock Exchange, 29 September 2008

    Why did the bail-out bill fail?
    Q&A: US $700bn bail-out plan
    Dow Jones plummets

    "There's a monster amount of fear out there," said Joe Saluzzi, a trading manager.

    "This is global contagion. It's no longer just the United States," he told Reuters news agency.

    Mr Bush had argued that the bail-out plan was a "bold" one which he was confident would restore strength and confidence to the US economy.

    But after a several hours of impassioned debate, the bill's opponents - the majority of whom were from the Republican Party - got their way.

    They had raised concerns about both the content of the plan and the speed with which they were being asked to pass it.

    Some agreement on issues such as oversight, greater protection for taxpayers and curbs on executive bonuses had been reached in fraught weekend talks.

    These concessions, however, ultimately failed to persuade enough lawmakers that the plan was in the best interests of the nation.

    Blame game

    The no vote plunged the world of Washington politics into turmoil, reports the BBC's Kevin Connolly from the US capital.

    Pelosi urges bipartisan approach

    So grave are the consequences of this decision, our correspondent says, that the speaker of the house paused for several long minutes after the vote was taken before declaring it official.

    "The legislation has failed, the crisis has not gone away," said Nancy Pelosi, the house's Democratic speaker.

    She said that 60% of Democrats had supported the bill, and urged both sides to try again to find a resolution.

    "We must work in a bipartisan way in order to have another bite at the apple in terms of some legislation," she said.

    Republican leaders, meanwhile, criticised a scathing speech by Ms Pelosi about the Bush administration's economic policies for injecting partisanship into the issue and scuttling the vote.

    Republican house leader John Boehner said: "We could have gotten there today had it not been for the partisan speech that the speaker gave on the floor of the House".

    The speaker's words, he said, "poisoned our conference, caused a number of members that we thought we could get, to go south".

    Call for calm

    Republican presidential hopeful John McCain accused Democrats of infusing the debate with an unhelpful partisan approach.

    "Now is not the time to fix the blame, it's time to fix the problem," he added.

    He urged members of Congress to go back to the drawing board "immediately" and work out a new deal.

    His Democratic rival Barack Obama countered that it was an outrage that ordinary people were being asked to clean up Wall Street's mess.

    HAVE YOUR SAY

    I am glad the bailout bill failed. I work five days a week, save cash and pay my bills. I did not want to pay for Corporate America's greed

    Lisa, Baltimore
    Send us your comments

    "If I am president I will review the entire plan on the day I take office to make sure that it is working to save our economy and (that) you get your money back," he said.

    He added that he expected Congress to pass a bail-out bill in some form.

    Lawmakers from both parties have called for further talks on new bail-out legislation.

    Frantic steps will now be taken to get some kind of amended version of the bill through Congress, our correspondent says.

    But, he adds, this vote would have shaken the confidence of the financial world and the ability of America's leaders to come up with convincing answers at a moment of crisis.

    UK Prime Minister Gordon Brown said he was disappointed by the vote's failure, adding that he was doing everything he could to protect the British economy. BBC NEWS | Business | House votes down bail-out package
    I'm not really sure what to think other than I wonder where to stash teh cash I plan on taking out of hte bank.
    'Those who sacrifice liberty for security deserve neither.' Ben Franklin

    "When fascism comes to America, it will be wrapped in the flag and carrying the cross."
    --Sinclair Lewis

  2. #2
    Elite Member cupcake's Avatar
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    Do not take your money out of the bank!!!..If we all do that then we really are screwed
    My grace is sufficient for you, for my my strength is made perfect in weakness...I love you dad!
    Rip Mom

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    Elite Member NicoleWasHere's Avatar
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    ^ My grandma was getting all panicky about it, and told me she was going to take all of her money out before anything happened... I told her what COULD happen, if she and other people did it, and she's STILL planning on doing it. -_____-;;

  4. #4
    Gold Member ymeman's Avatar
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    very true. but having just watched what happened when my town ran out of gas this weekend, I don't know what I would do. The mayor told everyone not to panic and get gas they didn't need, and everyone did anyway. Leaving people who didn't need it with zero.

    edit: losing my marbles. I meant, people who didn't need gas 'right then' didn't rush out and get it. Other people did, I passed two Hummers out joyriding when I was going to work Sat. night. People pissed away gas to cruise the streets of hooterville during a gas shortage, lol. Next day, that shipment was dried up and all of us were wondering where we were gonna score gas. I had to work over that night and caught a station opening cause they'd just gotten a shipment in at 2 a.m. Cops were there , barricaded off the station cause people were drunk and unruly, lot's of f-you's going back and forth. I called both my parents and they came and filled their cars up too.

    not that it matters to this topic but having watched this I have no faith whatever in people exercising good judgement or doing the 'right thing' when it comes to this.
    Last edited by ymeman; September 30th, 2008 at 12:39 AM.

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    Elite Member nana55's Avatar
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    Let the panic begin!
    If I can't be a good example, then let me be a horrible warning.

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    Elite Member kingcap72's Avatar
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    I was talking to my mother over the weekend and she said that she and my father already lost $18,000 in stocks, bonds, etc. And that was before the Dow plunged 800 points.

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    Gold Member mamaste's Avatar
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    Quote Originally Posted by buttmunch View Post
    I'm not really sure what to think other than I wonder where to stash teh cash I plan on taking out of hte bank.
    Don't take your money out of the bank. Did we learn nothing from It's a Wonderful Life? Your money's not in the safe. It's in Joe's house and the Kennedy house and Mrs. Macklin's house.

  8. #8
    Elite Member McJag's Avatar
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    Nicole & everbody else worried- Just go to this website (FDIC insurance) and make sure your money is covered. If not,change banks,but if you are covered there is no problem!! Do not panic-causes wrinkles.

    www.myfdicinsurance.gov
    I didn't start out to collect diamonds, but somehow they just kept piling up.-Mae West

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