Tuesday, September 30, 2008

American Bailout Plan Stalked; Stockmarket plunged

WASHINGTON, Sept 30 — In a vote that shook the US government, Wall Street and markets around the world, the House yesterday defeated a US$700 billion (RM2.4 trillion) emergency rescue for the nation's financial system.

"We need to put something back together that works," a grim-faced Treasury Secretary Henry Paulson said after he and Federal Reserve chairman Ben Bernanke joined in an emergency strategy session at the White House. On Capitol Hill, Democratic leaders said the House would reconvene on Thursday in hopes of a quick vote on a reworked version.

The Bill went down, 228-205, even though Paulson and congressional leaders proclaimed a day earlier that they had worked out an acceptable compromise in marathon weekend talks.

Stocks started plummeting on Wall Street even before yesterday's vote was over. Dow Jones slumped 777 points, far surpassing the 684-point drop on the first trading day after the Sept 11, 2001, terror attacks.

65 Republicans joined 140 Democrats in voting "yes," while 133 Republicans and 95 Democrats voted "no."

"We're in this moment, and if we fail to do the right thing, Heaven help us," Republican Paul Ryan said.

Republican John McCain declared: "Now is not the time to fix the blame; it's time to fix the problem."

Democrat Barack Obama said: "Democrats, Republicans, step up to the plate, get it done."

Republican Barney Frank, chairman of the Financial Services Committee said: "Because somebody hurt their feelings, they decide to punish the country."

"The legislation have failed; the crisis is still with us," said House Speaker Nancy Pelosi in a news conference. "What happened today cannot stand."

Will the crisis leads to a global meltdown and lead to a global recession? I feared it will!



KLCI down by 24 points this morning


At 9.30am, the benchmark Kuala Lumpur Composite Index (KLCI) declined 23.78 points or 2.36 per cent to 995.94, after opening 24.60 points lower at 995.12.

Dow Jones is down by 7% yesterday. So, brace ourselves for similar adjustments. Hope the Hari Raya break would cushion the slide.

10 comments:

Anonymous said...

The American investment banks which fell such as Lehman Bros, Goldman Sachs, Merrill Lynch ect have been operated by crooks of the Lorraine Osman type. These CEOs awarded themselves high pay and bonuses even when their businesses are losing money. They should now be dealt with the Chinese way, i.e. a bullet each to the back of their heads

Hasbullah Pit said...

Lupa pula hari ini market masih dibuka.

sibuk dengan raya.

Jefus said...

where does the line mark the difference between the greed of a CEO with golden parachute and a pension fund holding the trust of many? for if the financial institution folds, the shareholders bears the brunt?

Investigations into Lehman Brothers, which filed for bankruptcy this month, and AIG, which was rescued by the government, have also been opened recently by federal officials.

There are inquiries into at least 26 companies, including investment banks, credit rating agencies, accountants and hedge funds – in addition to more than 1,400 investigations into brokers, appraisers, buyers and lenders. The justice department and the SEC declined to comment.


link here

was there sufficient monitoring? or did the greed get the better of everyone?

The Madness of Crowds,... or the Southern Island Bubble all over again?

on the other hand,..... isn't it a good tome to go shopping for equities? now, you can really get good buys,...... and the cycle of greed begins again,....

GobloKing said...

I don't think bailing out greedy Barbarians at the Gate would solve the problem. I tend to agree with the common American people.

The plan should not be done in haste
The plan should be to create max impact for the max people

BUT ye smarter 1/2 cautions me that in not bailing out these suckers, the impact on the US economy AND that of the world will be FAR worst

Meanwhile in Malaysia - semua pun Ok. There seems to be little or NO news of the impacts of the world's economic downturn.

Like I say Msia must be full of superheroes helming the economy which is why we are doing fine

Maybe we can hv our supereconomic advisers sent to US to help them solve their problems? which in turn will solve ours!

THE WORST IS YET TO COME MY FRIENDS!

washington-mutual-man said...

Once again, the world is in tumult and an impending financial crisis of unimaginable extent threatens to engulf it and the ultimate losers are all the working class.

All these are the result of raw and unchecked human greed perpetuated by the rich Americans who control their banking industry and their financial services sector.

Maverick SM said...

Hasbullah Pit,

Ya, hari ini masih ada market trading.

Jefus,

We are in a capitalist world.

The problem with the US economy is about capitalism at work.

Gobloking,

I agree that the bailing out is bad; but if the US govt do not, then the global economy will sink together. No one will be unaffected by the turmoil.

What is important is global stability and mitigation is a necessary act though it is not ideal.

Washington-mutual-man,

I agree; but tell me what's the difference with Malaysia? Large scale and small scale? Big vs small? Thief vs Thief?

I do not agree with the capitalists' plunging and pillages; but that's the price of capitalism which America has embraced.

washington-mutual-man said...

Mave

The difference is America talks with power. The capitalisation of one average listed company is already the size of the entire economy of Malaysia. They can do what they tell others not to do. This is raw power.

Malaysia tells US not to interfere. I agree. But do they need to listen?

Maverick SM said...

Washington-mutual-man,

Politics and economic power rules and the sheer size of the American economy and their might dictates terms.

However, Malaysia has BOLEH spirit and we believe we are smarter and better. It doesn't matter what is real; surreal is important.

washington-mutual-man said...

Agreed. Malaysia's situation is surreal.

We will wake up to a painful reality one day.

Anonymous said...

we shouldnt have to do a bail out send the american people the money let them do something with it we will be better in the long run tha little stimilus package was nothing compared to what they want to give the fat cats just gos to show the rich get richer.