January 19, 2001: 10,587.59
September 29, 2008: 10,365.45
NASDAQ Jan 19, 2001 = 2770.38
NASDAQ September 29, 2008 = 1983.73
CPI, January 19, 2001: 175
CPI, September 29, 2008: 219
Dollar exchange with Euro, January 19, 2001: 1.068
Dollar exchange with Euro, September 29, 2008: .695
And why not? After all, McCain said he was responsible this morning.
One thing that works in our favor for the CW (in assigning the blame for this to the Republicans) is that most TV pundits are so solidly members of the village, they can’t imagine sacrificing Wall Street to the fates of the free market. So I expect it won’t just be Tweety blaming Republicans–and John McCain in particular.
From ThinkProgress:
“[T]his bill would not have been agreed to had it not been for John McCain. … But, you know, this is a bipartisan accomplishment, a bipartisan success. And if people want to get something done in Washington, they just watch John McCain.” — Former Massachusetts governor Mitt Romney, 9/29/08
“Earlier in the week, when Senator McCain came back to Washington, there had been no deal reached. … What Senator McCain was able to do was to help bring all the parties to the table, including the House Republicans.” — Senior adviser Steve Schmidt, 9/28/08
“But here are the facts, and I’m not overselling anything. The fact is that the House Republicans were not in the mix at all. John didn’t phone this one in. He came and actually did something. … You can’t phone something like this in. Thank God John came back.” — Sen. Lindsey Graham (R-SC), 9/28/08
“Before John McCain suspended his campaign yesterday, the situation that we’re looking at today looked very different then. After he showed leadership and called for bipartisanship, for us to partisanship aside and tackle this solution head on, here we are.” — Spokesman Tucker Bounds, 9/25/08
Great work, McCain!! Here we are, thanks to McCain.
Update: Meanwhile, McCain’s hiding in the front of the Straight No Talk Express trying to figure out what he can say about this.
After bragging today about his role in shaping the economic bailout package, Sen. John McCain has made no statement to the press since the defeat of the bill, in part at the hands of House Republicans. McCain boarded his Straight Talk Air charter plane a few minutes ago, but the plane has not taken off yet. McCain is in the front of the plane, separated from reporters by a brown curtain
The bailout bill in the House just failed, 205-228. Last I counted, the Republicans had fallen short of even delivering the 70 yes votes they promised.
The stockmarket is bouncing up and down like a basketball–down 700, then down 400, and now down 600, now 450.
Which is as good an indication as anything else that no one knows what happens now.
I just heard a Barney Frank quote saying he’d wait to see how the markets react before deciding where to go now.
Barney: Think basketball.
Update: vote total fixed per Hugh.
Sure, the comparisons between Herbert Hoover and McCain were inevitable ever since McCain asserted "the fundamentals of the economy are strong."
But if you think about it, McCain’s about to do Hoover one better. After all, Hoover didn’t fuck up the response to a financial crisis until after he was President. McCain’s little photo op seems to have scuttled the Paulson deal, just as it was almost finalized.
Democrats complained of being “blindsided” by a new conservative
alternative to the plan first put forward by Treasury Secretary Henry
Paulson. And the outcome casts doubt on the ability of Congress to move
quickly on the matter, even after leaders of House and Senate banking
committees reached a bipartisan agreement Thursday on the framework for
legislation authorizing the massive government intervention.It was McCain who urged President Bush to call the White House
meeting attended by House and Senate leaders as well as Obama, his
Democratic rival. But the candidates left without commenting to
reporters outside, and the whole sequence of events confirmed
Treasury’s fears about inserting presidential politics into what were
already difficult negotiations.[snip]
At the same time House Financial Services Committee Chairman Barney
Frank (D-Mass.) said he feared McCain was undercutting Paulson by
appealing to conservatives in the House.“McCain and the House Republicans are undercutting the Paulson plan,
talking about a wholly different approach,” Frank said prior to the
meeting. “This is the presidential campaign of John McCain undermining
what Hank Paulson tells us is essential for the country.”
What is it that I saw on those signs, again? "Photo Op First"?
Thanks to Masaccio for explaining what Dick Durbin is trying to do with the bankruptcy provisions on the bailout bill. It sure sounds like it would be a pretty darned sensible way to keep people in their houses. -ew
The Bankruptcy Answer
Why are Democrats pushing to include the bankruptcy revisions in the bailout bill? Let’s see what happens to a troubled mortgage in a Chapter 13. Suppose we have a subprime mortgage. The note has an interest rate of 9%, principle of $200,000, and a 30 year term. The house cost $210,000, so there was a 5% down payment.
The family made the income level by aggregating the income of husband and wife. One loses a job, they get behind, and then they get a new job paying a lot less. They file Chapter 13. The point of the Plan is to offer a proposal to repay their creditors, including taxes, secured debt, and unsecured debt. The Bankruptcy Code dictates how much they have to contribute from their paychecks. The amount is basically the difference between their income and their allowed expenses. Both of these terms are defined in the Bankruptcy Code, and are sort of like your natural understanding, but not quite. The money goes to the Chapter 13 Trustee, who distributes it in accordance with the Plan. Read more →
Via John Cole, it appears our bankers were none too impressed with Bush’s speech last night.
Chinese regulators have told domestic banks to stop interbank lending to U.S. financial institutions to prevent possible losses during the financial crisis, the South China Morning Post reported on Thursday.
The Hong Kong newspaper cited unidentified industry sources as saying the instruction from the China Banking Regulatory Commission (CBRC) applied to interbank lending of all currencies to U.S. banks but not to banks from other countries.
I guess this is where we start talking about paying for milk with wheelbarrows full of cash, fresh off the very busy printing press.
Hank Paulson and Ben Bernanke are the wrong guys to solve this financial crisis.
I’m not talking, here, about Paulson’s very obvious conflicts of interest, though those are troubling. Paulson, after all, was CEO of one of the companies that in 2004 got an exemption on leverage limits–one of the moves that led to this crisis. And Paulson’s proposed bailout would disproportionally benefit his former company.
But I’m increasingly troubled by the ways in which Paulson and Bernanke are functionally inadequate to solve this problem–at least by themselves. By having Paulson and Bernanke solve this problem themselves, we guarantee that we’ll primarily address this as a finance crisis, and not an underlying structural crises in our economy.
While both Paulson and Bernanke have responsibility for the overall economy of the country, that responsibility is focused closely on monetary policy of the US.
The Fed describes its role as follows:
And Treasury describes its mission:
The Treasury Department is the executive agency responsible for promoting economic prosperity and ensuring the financial security of the United States. The Department is responsible for a wide range of activities such as advising the President on economic and financial issues, encouraging sustainable economic growth, and fostering improved governance in financial institutions. The Department of the Treasury operates and maintains systems that are critical to the nation’s financial infrastructure, such as the production of coin and currency, the disbursement of payments to the American public, revenue collection, and the borrowing of funds necessary to run the federal government. The Department works with other federal agencies, foreign governments, and international financial institutions to encourage global economic growth, raise standards of living, and to the extent possible, predict and prevent economic and financial crises.
The Fed talks about "full employment and stable prices." Treasury talks about "economic prosperity" and raising standards of living and "encouraging sustainable economic growth." Read more →
Hidden in an article reporting that Cheney’s going to go hunt up some support for the $700,000,000,000 bailout is this admission that the Bush Administration has been sitting on it for some time:
Fratto insisted that the plan was not slapped together and had been drawn up as a contingency over previous months and weeks by administration officials. He acknowledged lawmakers were getting only days to peruse it, but he said this should be enough. [my emphasis]
Which raises three questions for me:
A) First, as we’ll discuss today in the book salon on Woodward’s War Within, the Bush Administration refused to admit Iraq was FUBAR even while, for seven months, they were drumming up a new strategy because it was FUBAR. They did so because they didn’t want to affect the mid-term elections. So has the Bush Administration been formulating a plan to bail out their buddies, in secret, because they didn’t want to let the voters know how badly they had fucked up the American economy before November?
B) And if that is true, how much worse has the economy gotten–and how much more expensive will the bailout be–because the Bushies were trying to hide yet another colossal Republican failure?
C) Or, did they simply not tell us about their fuck-up so they could spring the $700,000,000,000 surprise on us on a Friday and demand results by Monday? The Shock Doctrine at work!
Though, I guess "A" and "C" are not necessarily either/or propositions.
From Helena Cobban (h/t MinnesotaChuck).
China’s President Hu Jintao has now explicitly linked his country’s readiness to show good cooperation in resolving the US financial crisis to the question of Taiwan.
Beijing’s official Xinhua news agency reported today that Hu and Pres. Bush conferred thusly about the crisis yesterday evening (Washington time):
Bush briefed Hu on the latest development of the U.S. financial market, saying his government was well aware of the scope of the problem, and had taken and would continue to take necessary measures to stabilize the domestic and world financial markets.
Hu [said he] hoped the measures would soon take effect and lead to a gradual recovery of the financial market, which he said not only serves the interests of the United States, but also those of China, and benefits the stability of the world financial market and the sound development of the world economy.
… He said China is ready to work with the U.S. side to intensify dialogue, exchanges and cooperation, and properly handle issues concerning mutual interests and of major concern, particularly the Taiwan question, in a bid to push forward the sustained and steady development of the Sino-U.S. constructive and cooperative ties.
How long do you think Hu has been waiting for the moment he had Bush by the balls?
When you come begging to your banker, you’ve got to expect him to issue demands, I guess.