Why Bailout Plan Fails - What's next for the Suffering Economy?
63With the falling stock market what happened to the financial rescue?
This left the Dow Jones industrials down as investors feared that the failure of the government's financial rescue plan in the House will force the country into a worsening credit and economic crisis.
Emergency Economic Stabilization Act FAILS to receive enough votes to pass in the House of Representatives. What happened? A majority of Democrats voted for the bill. A majority of Republicans voted against it. The Republican vote was more than 2-1 against the bill.
Wall Street is also worried about overall sluggishness in the world's economy. In the U.S., unemployment sits at a five-year high of 6.1 percent. With this rate expecting to increase further pressure is put on consumer spending accounting for more than two-thirds of the nation's economic activity.
After the House rejected the government's proposed financial bailout plan - investors rushed for the safety of Treasury bills, while banks charged more to lend to one another. This year's market turmoil had called into question the viability of the investment-banking business model.
Is it the end of wall street?
Wall Street's transformation also means that private equity companies and hedge funds will be the new financial innovators and move further onto investment banking's traditional arena.
Both hedge funds and private equity have intrinsic limitations on their ability to raise money and fund their activities, so neither is a perfect substitute for the former role of the investment banks.The new system will have more capital and less direct lending through such vehicles as asset-backed securities.
With the Economic Downturn Are we headed for a Depression?
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From Buildings and Loans to Bail-Outs: A History of the American Savings and Loan Industry, 1831-1995
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Will the Bill it pass the second time around?
The New York Times reported that U.S. House leaders were planning a second attempt to pass the bill.
The defeat is a massive setback for the Bush administration, specifically the Treasury Department, as well as lawmakers who have been working throughout the last week on the legislation in the wake of the collapse of Lehman Brothers Holdings Inc. (LEH) as well as the government's bailout of American International Group Inc. (AIG) and its takeover of Fannie Mae (FNM) and Freddie Mac (FRE).
Watch Video Bail out Rejected Fail
Research News
- CNNMoney: Stocks tumble | Bailout Tracker
- Frank rips GOP | Boehner blames Pelosi
- Read a draft of the bill | See how they voted
- iReport.com: Your take? | Who's bailing us out?
- If You Are Concerned About the Economy, You Are Not Alone
From foreclosures to government stimulus packages, it can get confusing dealing with your finances in today's economy. There are plenty of people wondering how the country got into this mess. - 6 hours ago
- Career Opportunities Decreasing
Take a look around and you will see that career opportunities are decreasing. We are in the middle of a huge recession and there is no telling when we will see the light at the end of the tunnel. I bet everyone who reads this article has been affected by job loss in some way or fashion. - 20 hours ago
- How the Economy Will Recover
Almost everyone is worried about the current state of the economy. We here it everyday in the media, and since media doesn't make much money on positive news it is rarely good news that we hear. The economy, however, will recover. - 23 hours ago
- Fritz Henderson Ousted and It's Cause of Opel
On Tuesday, Fritz Henderson suddenly "resigned" from his position as the CEO of General Motors. Henderson was ousted after a grueling two-day board meeting convened by Ed Whitacre. GM's board (now comprised of government lackies and union members) has long hated the prospect of being led by yet another GM lifer. So from the get-go Fritz's future at GM was tenuous. - 24 hours ago
- A Leap Into the Unknown - Next Year's Economy
The root cause of the current crisis is the mismatch between the monetary mass within the global financial system and the amount of assets available for investment. Current government and central bank policies have increased that mass beyond the system's capacity to absorb it. The probable outcome will be a massive currency crash, which only the implementation of alternative policies could prevent. - 25 hours ago
- How the US Government Made the Wrong Investment in the Banks
When the government decided to bail out the troubled banks under the Trouble Asset Relief Program (TARP) they took a lot of heat. At the same time, if they wanted to keep the world economy from imploding, they had no other choice. However, they did have a choice in how they structured such help. We discuss the government's investment here and hopefully illustrate why individuals should not take investment advice from the government. - 25 hours ago
Why Bailout Plan Fails - What's next for the Suffering Economy? in the News
- U.S. Economy May Grow as Much as 4% Next Year, Blinder SaysBloomberg9 hours ago
Dec. 16 (Bloomberg) -- The U.S. economy may expand 3 percent to 4 percent next year, supported by a recovery in investment, job creation and fiscal and monetary stimulus, Princeton University economist Alan Blinder said.
- Australian Economy Grew 0.2% on Government Spending (Update2)Bloomberg10 hours ago
Dec. 16 (Bloomberg) -- Australia’s economy expanded in the three months through September for a third straight quarter, boosted by government spending on roads, ports and schools.
- Poll: Action on climate will heat up economy, jobsWashington Post21 hours ago
WASHINGTON -- More Americans believe steps taken to reduce global warming pollution will help the U.S. economy than say such measures will hurt it. It's a sign the public is showing more faith in President Barack Obama's economic arguments for limiting heat-trapping gases than in Republican claims...
- U.S. Economy: Production, Producer Prices Increase (Update2)Bloomberg15 hours ago
Dec. 15 (Bloomberg) -- Factories in the U.S. churned out more goods in November than anticipated, extending a rebound in manufacturing that will give the world’s largest economy a lift into 2010.
- Poll: Action on climate will heat up economy, jobsSan Francisco Chronicle11 hours ago
More Americans believe steps taken to reduce global warming pollution will help the U.S. economy than say such measures will hurt it. It's a sign the public is showing more faith in President Barack Obama's economic arguments for limiting heat-trapping gases...
- China's Economy: Trouble AheadBusinessWeek19 hours ago
The latest statistics show the economy heading back toward double-digit growth rates, but there are also troubling signs of a bubble in property
- Obama asks bankers to help lift economyMalaysiaNews.net10 hours ago
WASHINGTON: President Barack Obama told top US bankers on Monday they owed it to the country to help lift the economy out of crisis by lending more money to small businesses in need and embracing fina...
- Australian economy growth lower-than-expectedMalaysian Mirror10 hours ago
SYDNEY -Australia's economy grew a lower-than-expected 0.2 percent in the third quarter, official data showed on Wednesday, indicating a slower recovery from the global financial crisis.
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Comments
Yes I was surprised to see the role republicans and the democrats play in the proposed bail out.
When people vote their party instead of the voting for the good of the country, they deserve to lose the next election.
Unfortunately, enough anti-do-something steam has been raised on this issue that anyone can say almost anything and someone will believe the lie.
The bailout is not perfect and personally I think it stinks, but I am more afraid of what will happen if the same trickle-down econimics folks who brought us much of this mess have a huge say on how to repair it.
Nothing that gets done will be 100% wonderful, but doing nothing is tantamount to jumping off the bridge. I'm not quite ready to jump yet - but I want to know who is.
Chef, I know this is no where near over- more negotiations will take place, congress wants to come up with rules to go along with the proposed action to bail out Wall Street and the Banks debt.
Thanks for this, RA! Believe me, it's a situation that's of just as great interest this side of The Pond (ie, the UK) as it is yours!
Vivenda, your right, President Bush is pushing for a reviving of the bill, and the Republican House aides said the FDIC proposal might be attractive to some conservatives who want to help small business owners and avert runs on banks by customers fearful of losing their savings. With the House not scheduled to meet again until Thursday, congressional leaders and administration officials promptly sought to assess what types of changes could win over enough votes to guarantee success.
Storytellersrus says:
15 months ago
Hey, RA, thanks for providing the "See how they voted" site. I've been trying to find that site to see how my Congressmen did- 4 Nays, 3 Yays. Guess I will be making some calls...
Amazing that the Democrats tried to bail out the President, harkening to his urgent yet last minute call, and the Republicans are attempting to blame them.
The second attempt could be Thursday, the day of the VP debate. Interesting times we live in...