US Bailout rejected

[minux]

Bloodbath after bailout blocked

THE $840 billion bailout of US banks has been rejected by US politicians, wiping tens of billions of dollars off Wall Street and threatening to do the same when the Australian market opens.
The local share market looks set to shed 7 per cent when it opens this morning after a horror session on Wall St, where the The Dow Jones Industrial Average suffered its worst single-day point fall ever.
The bailout plan, only agreed yesterday after a week of back and forth, was voted down this morning, sending markets into a panic. Wall St's losses were even bigger than the falls suffered after the September 11 terrorist attacks.
Traders watched the politicians reject the package, then erupted into frenzied selling as what has been described as "Wall Street's worst fears" came true.
Experts are saying that while the markets were not really convinced by the mega-bailout in the first place, the fact that it could not even pass its first vote means there could be no end in sight to the world financial crisis.
"It is unclear what the next step will be. It took days of painstaking negotiations to put together the deal, and congressional leaders and administration officials may have to go back to the drawing board,'' said Augustine Faucher at Economy.com.
"The US is looking at a severe recession if Congress fails to pass some sort of package.''
For Australians, it means that the slim hope of banks independently lowering interest rates have disappeared for the time being. It was thought the package could have made borrowing cheaper for banks, which would then pass on those savings to customers.
It also raises the chances that the banks will cling to their current rates even if the Reserve Bank lowers the official rate when it meets next week.

Why the bailout was needed

Years of easy credit, where banks and other lenders made loans they knew couldn’t be repaid finally caught up with the US financial system this year.

Many US banks hold bonds, which are backed by mortgages – many of these mortgages are in default, making the bonds worthless . Under the bailout plan $US700 billion of taxpayers’ money would be used to buy these distressed bonds.
But even when US political leaders agreed on the package yesterday, traders knew nothing was final until it was voted on.
When it was clear it would be defeated, the plunge began. The Dow Jones Industrial Average sank 770.59 points (6.92 per cent) to 10,372.54 after the closing bell in the worst single-day point decline ever, based on provisional data at the close of trade.

The slide eclipsed a 684-point drop on September 17, 2001, when the markets reopened following the September 11 terror attacks.
"It takes an incredible amount of fear to set off such an intense reaction on Wall Street," one business writer said after watching the fall. "The worry now is that with the ... plan's fate uncertain, noone knows how the financial sector hobbled by hundreds of billions of dollars in bad mortgage bets will recover."


Certainly is not looking good for World Markets...on a good note, Oil prices dropped dramatically due to this, now down to under $94 a barrel.

[VY03]

I knew this was going to happen sooner or later and yes oil has dropped down but is the price of petrol going to be cheaper or not

[Skitz]

I knew this was going to happen sooner or later and yes oil has dropped down but is the price of petrol going to be cheaper or not

People may lose their jobs and have no money to pay for petrol, so it may be a no-win situation.

[Reaper]

I knew this was going to happen sooner or later and yes oil has dropped down but is the price of petrol going to be cheaper or not

Petrol should be marginally cheaper. I believe the $A fell sharply as well which negages much of the fall in crude price.

Interestingly this has happened in America before in the early 80's. Pres Reagan bailed out the banks to the tune of several hundred billion (not far off what they are predicting the cost will be in todays money) way back then. I don't know much about the American banking system but things suggest that in addition to the monetry bail out, significant structural changes need to take place as well.

Reaper

[minux]

Petrol should be marginally cheaper. I believe the $A fell sharply as well which negages much of the fall in crude price.

Reaper

Not that sharply, closed at .799, was only at .81.

[Reaper]

Not that sharply, closed at .799, was only at .81.

Ok.... well somewhat then . I thought it was higher than that yesterday.

Reaper

[immortality]

haha, wait for the rest of the world to follow. wall street plunged, the rest of the world will follow. fat chance that oil prices (and therefor petrol prices) will drop to much. OPEC has already stated that they don't want to see prices drop bellow the US$100 mark so if it stays bellow that for to long OPEC will just reduce output to bring the priceback up.

damn. i hope those aussie and NZ bank are in beter shape then a lot of the US and some European ones because a fair few have now been bailed out

[Keepleft]

"One hell of a recession".

Peter Schiff predicts doom and gloom for the US economy if a bailout is voted in.

Best of ABC Online - ABC News (Australian Broadcasting Corporation)

Market panic as US $700 billion bailout rejected by House of Reps - Radio National Breakfast - 30 September 2008

ABC News (Australian Broadcasting Corporation)

[88GreenVN]

And wait for the 2011 (Robert Keyasarki of Rich dad poor dad book fame) crash to follow up the bad banks crisis.

By 2011 the number of Americas finishing working life and must withdraw their super will peak and put huge pressure on the super funds. Trouble is that there wont be any money left for them to retire on and so will be fighting the young for jobs.

Gunna be 1 hellova mess.

[minux]

And wait for the 2011 (Robert Keyasarki of Rich dad poor dad book fame) crash to follow up the bad banks crisis.

By 2011 the number of Americas finishing working life and must withdraw their super will peak and put huge pressure on the super funds. Trouble is that there wont be any money left for them to retire on and so will be fighting the young for jobs.

Gunna be 1 hellova mess.

Will be interesting to see how it effects house sales etc over here. A mini recession would be handy in some parts, especially to allow investors chances to buy houses at cheaper prices, which allows those who cannot afford to buy for one reason or another the chance to rent at less.

[88GreenVN]

Will be interesting to see how it effects house sales etc over here. A mini recession would be handy in some parts, especially to allow investors chances to buy houses at cheaper prices, which allows those who cannot afford to buy for one reason or another the chance to rent at less.

The retal maket in Adelaide is so tight right now running - vacancy is at 1.4% of stock.

So yes we need more investers for sure - but will they buy in this uncertain climate.

We dont have the bad loans the yanks have - they have just defered the pain for several years and now they are in meltdown. Silly buggers.

[Keepleft]

Pay off, get rid of your credit cards people. Spend some time listening and viewing the following to get an understanding of what is happening:-

30 September 2008

"One hell of a recession".
Peter Schiff predicts doom and gloom for the US economy if a bailout is voted in.

Listen:-
Best of ABC Online - ABC News (Australian Broadcasting Corporation)

Market panic as US $700 billion bailout rejected by House of Reps - Radio National Breakfast - 30 September 2008

NOW, take a view here folks! From a reply at Whirlpool to my initial post above:-
Peter Schiff- Bulls & Bears - 12/16/2006
http://www.youtube.com/watch?v=EoB4BS7CGAw
They laughed at Peter Schiff back in 2006.

Peter Schiff in 2007 on FoxNews:-
Peter Schiff: The Party is over!
Cheerleader 1: Sub-prime is a tiny, tiny problem.
Cheerleader 2: Our fundamental is strong.
Cheerleader 3: We have trade deficit for 32 years...we won't see a dollar crash anytime soon.
http://www.youtube.com/watch?v=PDcIYchtFRY

He was of course correct, the other 'experts' - wrong.

Now, April 2008
Peter Schiff: We're on the verge of economic collapse.
Idiot1: we are not in recession.
Idiot2: Everything is going to be fine...We are going through a normal cycle.
http://www.youtube.com/watch?v=iR_ssZzQyYQ

And again! Pay out what debt you have. Too many people are living beyond their means, 'ability to pay', and it will come home to roost here too.

[minux]

The retal maket in Adelaide is so tight right now running - vacancy is at 1.4% of stock.

So yes we need more investers for sure - but will they buy in this uncertain climate.

We dont have the bad loans the yanks have - they have just defered the pain for several years and now they are in meltdown. Silly buggers.

We will certainly buy more if the chance arises, as they say, one persons bad luck is anothers fortune.

Pay off, get rid of your credit cards people. Spend some time listening and viewing the following to get an understanding of what is happening:-

30 September 2008


Listen:-
Best of ABC Online - ABC News (Australian Broadcasting Corporation)

Market panic as US $700 billion bailout rejected by House of Reps - Radio National Breakfast - 30 September 2008

NOW, take a view here folks! From a reply at Whirlpool to my initial post above:-
Peter Schiff- Bulls & Bears - 12/16/2006
http://www.youtube.com/watch?v=EoB4BS7CGAw
They laughed at Peter Schiff back in 2006.

Peter Schiff in 2007 on FoxNews:-
Peter Schiff: The Party is over!
Cheerleader 1: Sub-prime is a tiny, tiny problem.
Cheerleader 2: Our fundamental is strong.
Cheerleader 3: We have trade deficit for 32 years...we won't see a dollar crash anytime soon.
http://www.youtube.com/watch?v=PDcIYchtFRY

He was of course correct, the other 'experts' - wrong.

Now, April 2008
Peter Schiff: We're on the verge of economic collapse.
Idiot1: we are not in recession.
Idiot2: Everything is going to be fine...We are going through a normal cycle.
http://www.youtube.com/watch?v=iR_ssZzQyYQ

And again! Pay out what debt you have. Too many people are living beyond their means, 'ability to pay', and it will come home to roost here too.

Agreed, I can list on my hands people we know who arent up to their neck in debt that they cannot pay. Anyone who has personal lines of credit is in for a rough ride. While we have our mortgages, we are safe in that we have never borrowed more than 75% of the properties values, this in itself makes an amazing differene not just to loan amounts but to most importantly repayment amounts. My Fiances mother is sitting on all her money just waiting to buy up when banks start forced banking auctions on properties. It will set her up for life as it will anyone else who has been careful with money.

[Full Spectrum]

If it doesn't pass, IT will take longer to overcome.

[Bax]

Never good, if you feel like looking into money situations look on youtube for some stories about centralised banking. It all looks fantastic.

[Bravotwozero]

Bankruptcy, not bailout, is the right answer. Bankruptcy does not mean the company disappears; it is just owned by someone new. Bankruptcy punishes those who took excessive risks while preserving those areas of a businesses that turn a profit. A bailout transfers enormous wealth from taxpayers to those who knowingly engaged in risky lending. So the bailout encourages companies to take huge financial risks because they're counting on being bailed out by the government. This generates enormous distortions in an economy's allocation of its financial resources.

The fact that government bears such a huge responsibility for the current mess means any response should eliminate the conditions that created this situation in the first place, not attempt to fix bad government with more government. The beneficiaries of the corrupt monetary system of the last three decades are now desperately looking for victims to stick with the bill after they have reaped decades of profit and privilege.

[immortality]

there is now a revised bailout package going before the house. lets see how this one does.

i need 2 hands and a foot to count the number of finance companies that have gone bust here in NZ in the last 2 years. i think there are going to be many people here that are gonna hurt when this is all said and done.

[Full Spectrum]

Laybuy is a hell of a thing.

[minux]

Laybuy is a hell of a thing.

Do people actually know what laybuy,saving and deposit mean these days?

[Full Spectrum]

Do people actually know what laybuy,saving and deposit mean these days?

No, Credit card plastic shove it in my boot now!.

[Rufus®]

Russell Crowe's answer to the problem at hand.... Crowe has 'plan' to fix financial crisis - Yahoo!7 News

Thank god he's a new zealander...

[TVR-190]

300million people, lets give them 1million each.

Def equals 300million dollars. no wonder the yanks like him

[Full Spectrum]

Russell Crowe's answer to the problem at hand.... Crowe has 'plan' to fix financial crisis - Yahoo!7 News

Thank god he's a new zealander...

Get rid of all the kiwis on welfare, Save a mint.

[Doubleshadow]

It is amazing to me when I hear this claptrap about letting companies go into bankruptcy to punish fatcat investors as if the value of stocks have anything to do with reality. The value of companies is all about perception. The reason why google can ask for a high price, is because of their perceived value. The truth is nothing has logically changed, except people's perception of the market. People stop investing, the markets will fall flat on its face, and capital investments, the lifeblood of companies will dry up.

It may make sense to let those companies go into bankruptcy, if the market operated with sense. The truth is, that the fatcats from these companies are walking away with their millions if the company sink or it floats. And if we do not bail them out, it will hurt the little assholes on the economy. Anyone who thinks that Bill Gates will be eating crackers because of the market crash, can bid on the bridge I am selling in Brooklyn. Bailing out these companies is the right thing to do to help the little people. The millionaires living upstate will just have to eat cavier 3 days out of the week, instead of the normal 7 days. This bailout will help jobs and the economy.

[Reaper]

It is amazing to me when I hear this claptrap about letting companies go into bankruptcy to punish fatcat investors as if the value of stocks have anything to do with reality. The value of companies is all about perception. The reason why google can ask for a high price, is because of their perceived value. The truth is nothing has logically changed, except people's perception of the market. People stop investing, the markets will fall flat on its face, and capital investments, the lifeblood of companies will dry up.

It may make sense to let those companies go into bankruptcy, if the market operated with sense. The truth is, that the fatcats from these companies are walking away with their millions if the company sink or it floats. And if we do not bail them out, it will hurt the little assholes on the economy. Anyone who thinks that Bill Gates will be eating crackers because of the market crash, can bid on the bridge I am selling in Brooklyn. Bailing out these companies is the right thing to do to help the little people. The millionaires living upstate will just have to eat cavier 3 days out of the week, instead of the normal 7 days. This bailout will help jobs and the economy.

Hahahaha How many people realise that they are also the same "fat cat" investors. Pretty much anybody with a superannuation fund is one. Stupid ****s....

Reaper