Earlier on tonight, the indications were that the US House of Representatives would be voting around 2am AEST on the revised version of the TARP bailout bill (with extra billions of dollars in pork to attract lawmakers’ votes – added in the Senate amendment which John “Against Earmarks and Wasteful Spending” the Maverick McCain duly voted for). It doesn’t look like that’s the case because a lot of Congressthings want to go on record for their constituents by speaking on the House floor (and/or because they have to ask questions now because the bill has never been subjected to legislative hearings, as is normal in the US Congress).
Anyway, I’m off to bed. But you can follow what’s going on via this liveblog from Catherine Rampell at the NYT’s Economix.
NB: Previous discussion and commentary at LP on the bailout, the financial markets crisis and the ramifications can be accessed here.
Update: via danny in comments -
1:25 p.m. | Bill passes: The bill passed 263 to 171. The vast majority of Democrats voted in favor (172 yeas to 63 nays), while a slighter majority of Republicans voted against (91 yeas to 108 nays).
Reaction and commentary over the fold.
Dollars and Sense explains why the Dow nevertheless fell:
it is becoming clear that investors are more concerned about the the breakdown of the commercial paper and interbank markets than they are about the various fixes proposed to get them going again. As well they might be.
Needless to say, the, the bill’s passage didn’t do much to sooth the CP market, or the interbank market (which deals with banks lending amongst themselves)–the latter rate actually rose. The markets clearly think the TARP package is too little, too late, at least right now: we’ll see what happens next week.
This thing has taken on a life of its own, like the proverbial monster.
Ian Welsh skewers the “government will make a profit” talking point, arguing that the bill is a “huge giveaway of money to private interests”. Mike Madden looks at what changed politically to get the bill passed. Jill at Feministe links to some alternative policy suggestions, while Larry Elliott in The Guardian favours learning some lesson from the early 90s Swedish bank crash, but warns that the crisis may turn into something that “drags on for years” as with the Japanese deflation of the same time period.
Ian Welsh reads the tea leaves of the economic consequences, and is not sanguine that Obama will pop up in January and fix everything:
And there are some ways this could be fixed. A lot of economists, like Stiglitz, are betting that Obama will eventually do a real bailout bill. We’ll see. He made no real push to fix this bill at all that I am aware of and his various economic policies have long indicated to me that he is essentially a gentler kinder Reaganite in economic terms, so I’m not so sure. Still, there are solutions, and I’ll talk about some of them in future, as I have in the past. The question is whether there will be any political will to do them. When you can pass a 700 billion bailout for the rich, but putting in real changes in bankruptcy laws to allow folks to keep their houses is unthinkable, it’s clear that the elite consensus is still that the little people are always to be made to pay to clean up their betters mistakes. Until that attitude changes, very little useful is likely to get through Congress.
And thanks to tigtog for pointing to the Money Meltdown site which has a lot of useful info and links.
Update: If you believe Nouriel Roubini is right about what’s going on, it gets even scarier. Hilzoy summarises at Obsidian Wings:
This is indeed a cardiac arrest for the shadow and non-shadow banking system and for the system of financing of the corporate sector. The shutdown of financing for the corporate system is particularly scary: solvent but illiquid corporations that cannot roll over their maturing debt may now face massive defaults due to this illiquidity. And if the financing of the corporate sectors shuts down and remains shut down the risk of an economic collapse similar to the Great Depression becomes highly likely.
Further to the lies and manipulation exerted by the Bush Clique to ensure passage of this Bill. Democratic Congressman Brad Sherman of California’claimed that several Congressional representatives have said they were threatened with the imposition of martial law if the TARP Bill were voted down.
Video of speech.
Is Brad Sherman lying? Maybe.
If Sherman isn’t lying, was the martial law threat idle? Possibly.
Is this how legislation is usually enacted in the US? I’d like to think it isn’t.
From that link:
That’s US eastern time I guess, so it would have been 3.30 am Oct 4 2008, AEST, ‘ish.
The market in the US hasn’t responded to the bailout quite as expected.
More:
And I just discovered the Money Meltdown site, which has all number of links on the background of the financial crisis and current analysis of the bailout plan.
Dollars and Sense explains why the Dow nevertheless fell:
Ian Welsh skewers the “government will make a profit” talking point, arguing that the bill is a “huge giveaway of money to private interests”. Mike Madden looks at what changed politically to get the bill passed. Jill at Feministe links to some alternative policy suggestions, while Larry Elliott in The Guardian favours learning some lesson from the early 90s Swedish bank crash, but warns that the crisis may turn into something that “drags on for years” as with the Japanese deflation of the same time period.
Ian Welsh reads the tea leaves of the economic consequences, and is not sanguine that Obama will pop up in January and fix everything:
And thanks to tigtog for pointing to the Money Meltdown site which has a lot of useful info and links.
Update: If you believe Nouriel Roubini is right about what’s going on, it gets even scarier. Hilzoy summarises at Obsidian Wings:
Katz [1]:
Who is to say that won’t happen anyway? Especially when they find out that the sun cannot be commanded to rise in the west nor rain be ordered to fall upwards.
Kim:
I didn’t comment here earlier as I thought it would be better to let the dozens of other posters with a far better knowledge of the finance world than me have their say. Well, this topic has been up for 13 hours now and my comment is only the sixth, not the 106th, so I assume that everyone else is just as shocked as me.
The Aristocrats have won.
They are likely to have seen this crisis coming a mile off and have prepared themselves well to use it to their own advantage. Therefore, I suggest that the very strange and counter-productive conduct of The War On Terror may have had more to do with preventing violent opposition, by ordinary Americans inside the United States itself, to these new Aristocrats plundering and oppressing them even further than to hunting down Osama bin-Whatshisname and his evil followers.
The Aristocrats have won.
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No they haven’t. It’s the Commies. It’s always the Commies. The Commies are responsible. I’ll keep saying that. People will believe me. They have before. It’s the Commies.
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It’s the Commies. It’s the Commies. It’s the Commies. It’s the Commies. It’s the Commies. It’s the Commies. It’s the Commies. It’s the Commies. It’s the Commies. It’s the Commies. It’s the Commies. It’s the Commies. It’s the Commies. It’s the Commies. It’s the Commies. It’s the Commies. It’s the Commies. It’s the Commies. It’s the Commies. It’s the Commies. It’s the Commies. It’s the Commies. It’s the Commies. It’s the Commies. It’s the Commies.
Seriously you’re quite right.
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These people talk about the dangers of govt spending when it’s on hospitals and schools but when their selfish, dishonest behaviour threatens to cause the entire global economy to go down the gurgler then they turn instantaneously Keynsian (whilst off course finding some bit of govt intervention to blame this on).
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All this talk of free market is bullshit. It’s an instituted oligopoly run by people who scarcely pay any tax and refuse to let our taxes be spent on necessary public infrastructure. Instead it’s being used to subsidize their industries. it’s a private-public partnership. Like Melbourne public transportation. Here’s the deal. The public pays for it, hands a corporation a monopoly and then pay for shithouse service at ever increasing prices.
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Pricks.