Pelosi: Democrats don’t have the votes to pass the bailout bill; Update: Vote unlikely before Wednesday?
posted at 6:05 pm on September 26, 2008 by Allahpundit
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“We don’t have the votes to do it on our own,” Pelosi told reporters.
Pelosi said many House Democrats still have strong reservations about the bill, especially if it does not include bankruptcy protections or does not include a way to pay for the massive $700 billion price tag…
Pelosi acknowledged that at first glance, the bill was “very unpopular” among the American people. However, Pelosi highlighted new polling data stating that the majority of Americans favor some form of government intervention to calm jittery financial markets.
Probably just her way of building leverage for some of those left-wing goodies they want in the final package, but I don’t know. There must be a few Blue Dogs looking at the polling on this and getting nervous. How long does the leadership have to pass something before people on their own side start defecting and the whole thing turns into Amnesty Debacle redux? Or am I just being naive, and in fact this is a classic Pelosi gambit a la her original maneuvering on drilling in which she encourages House members whose reelection prospects are dicey to vote however they need to knowing that she’ll get her way anyway? In fact, losing a few Democratic votes arguably makes it easier for her to claim that support for the bill is bipartisan, since it means that the few votes they already have among the House GOP will be decisive, not mere ornamentation.
Update: Debaclemania!
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Do any of those self serving idiots know what’s going on?
rplat on September 26, 2008 at 6:40 PM
Nancy, you’re supposed to be a LEADER. Quit sticking your finger in the air to see which way the wind is blowing.
In case you’ve forgotten, that’s why you get the big bucks. As Harry said, “If you can’t stand the heat, get out of the kitchen”.
Nancy in way over her head and paygrade. Matched only by that lying ass Senator Reid.
GarandFan on September 26, 2008 at 6:40 PM
Bishop:
If this goes on until Wednesday I think it works to the Democrat’s benefits. And yes, banks and jobs and pension plans and state services are all on the line. People will blame Republicans as much and probably more than Democrats if there is no resolution.
Terrye on September 26, 2008 at 6:40 PM
Would you gasp if Sarah came out instead? McCain could say he got a call that he’s needed in D.C. again. I would, literally, roll off my cushy couch.
SouthernGent on September 26, 2008 at 6:41 PM
When I said, “get a hobby”, I meant something other than cyber-stalking.
Janos Hunyadi on September 26, 2008 at 6:41 PM
Well since McCain has said the bill must pass by Monday, the democrats will see to it that no vote takes place until after Monday, and they will destroy heaven and earth if they have to.
rockhauler on September 26, 2008 at 6:43 PM
The reason she said thurday they had a deal and now says we don,t have enought votes to pass it .(THE DEMS LIE AND THE DRIVEBYS COVER FOR THEM AND HALF OF THR AMERICAN PEOPLE DON,T EVEN KNOW WHAT COUNTRY THERE IN!!!!)
thmcbb on September 26, 2008 at 6:43 PM
McCain should call for Frank and Dodd to step down from their positions at the debate. That’d drip with awesomeness.
lorien1973 on September 26, 2008 at 6:18 PM
No, they should both go to jail for being the prime movers in this total fiasco. Don’t the Dems ever have any problems when they screw something up totally?
duff65 on September 26, 2008 at 6:43 PM
Back in 2006 hardliners were sure that if they got tough on immigration, it would help them win the midterms. Did it? No, they lost. I am not saying they were wrong, but I think that sometimes we forget the rest of the country does not look at the world the way Newt Gingrich does.
Terrye on September 26, 2008 at 6:43 PM
…excellent…thanks.
A bit quick…I got whiplash at one point…but full of facts….
…so…it’ll never see the light of day….
Puritan1648 on September 26, 2008 at 6:43 PM
Really? If McCain can explain during the debate that OBAMA “blew up the meeting”, and that an alternative plan is being discussed which would cost less than $700B and allow failing banks to buy insurance on the bad loans from the Government, McCain would get credit for saving taxpayers lots of money while supporting the economy, and Obama would look like the deal-breaker who can’t negotiate with Congress, and the House Republicans would look like geniuses.
McCain needs to put on his Rush hat tonight, and hit it out of the park. Just hold the cigar.
Steve Z on September 26, 2008 at 6:43 PM
Here’s a bit of good news. New poll has McCain up +3 in Colorado. FWIW
SouthernGent on September 26, 2008 at 6:44 PM
The Bailout plan is being altered per McCain/House GOPers.
They’ll have the framework done by tonight and the details pounded out by Monday.
Each side will claim credit although Obama comes out looking weak (”call me if you need me”)
The end of the world IS nigh – if you’re an Obama supporter!
Religious_Zealot on September 26, 2008 at 6:44 PM
Can this type of decorum be far behind? Any guesses as to who bludgeons whom?
turfmann on September 26, 2008 at 6:46 PM
I disagree, as Nando just admitted she couldn’t pass anything even through her own party. There are plenty of nervous dems who see political oblivion in their futures, they will start talking too.
Bishop on September 26, 2008 at 6:46 PM
No thanks, Nancy. You may have learned your street-fighting ways in the Baltimore precincts, but we’re not buying your bullying rhetoric and outright lies couched in dulcet tones. We’re not interested in any more Democrat failed policies. We’ve been bled dry since the days of the Great Society propping up your party’s social engineering.
onlineanalyst on September 26, 2008 at 6:46 PM
Here’s a bit of good news. New poll has McCain up +3 in Colorado. FWIW
SouthernGent on September 26, 2008 at 6:44 PM
Joy! Everyone dance, this is the sign we’ve been waiting for, Obama is on the ropes and sinking fast!
Ahhhh, the good ol’ days when everyone just lurved the polls, these days….not so much.
Bishop on September 26, 2008 at 6:47 PM
oops..it was only a measly $20 million dollars…for 17 days of work.
becki51758 on September 26, 2008 at 6:48 PM
anniekc on September 26, 2008 at 6:33 PM
My skills with verbal substitution have been put to the test this election season, so I can relate. She’s not your representative is she?
Cindy Munford on September 26, 2008 at 6:48 PM
Isn’t she just doing that so the pubbies can be blamed? Who really knows how many donk votes she can muster. I trust nothing she says.
a capella on September 26, 2008 at 6:49 PM
Man, this whole thing is such as mess. If the gist of what Rush reported today about the meeting between Bush, Paulson, McCain, O!, et al is true, then we are headed for serious trouble if this mO!ron gets in. Forget for a moment that this guy wants to model us after Europe, he is not even competent enough to run a meeting a bunch of his cronies, stacked with a lame duck President, and that weasel Paulson.
Any chance McCain had an iPhone in his pocket and was recording O!’s meltdown?
I can dream, can’t I?
Y-not on September 26, 2008 at 6:50 PM
Sweet? Sounds fishy to me.
Murphy9 on September 26, 2008 at 6:50 PM
From what I understand, the dems want to have the gov own the bad debt and then sell it when better times come around at a profit to the gov. Whereas the gop’ers want less gov control and any gov money is actually a loan to be paid back.
In brief…
Kini on September 26, 2008 at 6:51 PM
…ah…an aspiring spy…an agent provocateur aspirant….
…take a bit of advice from someone schooled in subversion…spies aren’t transparently obvious…they don’t show up, p*ss people off, wave their arms…”Notice meeeee! NOTICE meeeee!”…
…friendly recommendation: rodeo clown.
…that might work for you.
Puritan1648 on September 26, 2008 at 6:51 PM
LOL
ManlyRash on September 26, 2008 at 6:52 PM
Wednesday?
The Hang Seng will open Monday full of confidence in the Beltway solution.
Calling the Hunan Wok right now to get my order in before prices go up.
Limerick on September 26, 2008 at 6:52 PM
Trust me, asshole, I am not that. I really do support McCain. This, however, would force my hand.
By the way, fuck you.
indythinker on September 26, 2008 at 6:53 PM
No. Next question.
ManlyRash on September 26, 2008 at 6:53 PM
Hmmm… last time we needed a distraction it was Bubba vs. Monica. Obambi vs. Scarlett Johanson?
He’s just being consistent with his record on every other possible issue.
McCain in debate: “Senator Obama, could you please inform us on your position on:
- the economic bail out
- this week’s view of your spending programs and *cough* tax cuts
- how you will cut taxes for 95% of people who pay zero taxes?
- The Iraq surge
- Invading Pakistan
- Israel
- Iran
- Russia/ Georgia
- NATO
- Clean Coal
- Oil Drilling/ shale
Oh and after that, can we have your view on the Bush Doctrine and specific examples of your foreign policy experience?”
Damiano on September 26, 2008 at 6:53 PM
What ever the come up with needs to be examined with high magnification before its passed.
mindhacker on September 26, 2008 at 6:54 PM
Every time I see someone use the word troll, I feel worse about the intellectual level of people who comment on Hotair.
Murphy9 on September 26, 2008 at 6:54 PM
…cods of war? Slipping into Barney Frank territory now, aren’t we?
/cheap homophobic joke attempt
*SLAPS SELF*
*SLAPS SELF AGAIN*
*GRINS*
*CONSIDERS SEAFOOD FOR DINNER*
Puritan1648 on September 26, 2008 at 6:55 PM
Isn’t she just doing that so the pubbies can be blamed? Who really knows how many donk votes she can muster. I trust nothing she says.
a capella on September 26, 2008 at 6:49 PM
I don’t trust Ninny either, but her words are now public record and she admits her own party has reservations about the bill.
If she comes back with exactly the same bill next week and suddenly her party fully supports it, she will have a lot of explaining to do.
Her guys are scared and are looking for a compromise so that the GOP will share the responsibility.
Bishop on September 26, 2008 at 6:55 PM
Get ready for 7 minutes of, “Um, er, well, um, ah, er”
Kini on September 26, 2008 at 6:57 PM
I understand that Barney Fwank is fond of sea cucumbers…
ManlyRash on September 26, 2008 at 6:58 PM
True. In the immortal words of Scarlett O’Hara- “I can’t worry about that now. Tomorrow is another day!” And tomorrow is football day! SEC!!!!!!! How about that Oregon State beating USC! Turmoil in the polls! LOL! Is Alabama for real? Can Florida’s offense become better with the run? Is Boise State poised for another Cinderella run? Is Oklahoma truly the best team as far as balance? And will the Children of the Corn, a.k.a Nebraska, pull it out this year and help their poor fans out of the doldrums? Now these are some important issues that must be answered before Sunday!
freeus on September 26, 2008 at 6:58 PM
I hope this thing never passes. When you have a so-called national emergency like this and some Democrat staffer is making sure that ACORN is taken care of, you know A) The whole thing stinks and B) Congress has not learned anything. Socialists like Pelosi and her submissve Harry Reid are squirming because they can see that the public and media are not going to take their eyes off of this issue.
When McCain and Obama deviate from the foreign policy script tonight to discuss the economy expect McCain to question Obama on why he is against job growth by thwarting attempts to drill more in the U.S. Expect Obama to give more lip service about the need for change. And, unfortunately, expect the media and the mindless undecideds to lap it up.
grdred944 on September 26, 2008 at 6:59 PM
A question I haven’t seen asked so I’ll ask it…
What the hell happens to Russia, China, etc if this ‘crisis’ doesn’t get diverted? Not that I’m hoping for it, just asking how all their new found wealth will be effected.
Yes Martha, Limerick is slow.
Limerick on September 26, 2008 at 7:00 PM
Great ideas are seldom remembered but um, er, well, um, ah, er are never forgotten.
Murphy9 on September 26, 2008 at 7:00 PM
OK…just which a*****e are you talking to here?!
Without somehow indicating which a*****e you’re addressing, you’re likely to offend some other a*****e….
…some innocent a*****e who was just innocently sitting there, typing away….
…who now thinks that you mean to be rude to them….
…and who is now thinking that you’ve joined the club, and are now just another a*****e….
…egads…a proctologist would get whiplash around here sometimes…his trigger finger all itchy and all….
…so, in future, be specific…point out the a*****e in question….
…and, if you’re sitting on it, tip up onto one cheek so’s we can make a positive ID….
…by the way, some rodeo clowns have taken to calling themselves “bullfighters” now…so you can finally get some use out of those satin capris your momma left you….
Puritan1648 on September 26, 2008 at 7:02 PM
Too many asterisks @_@
*eats*
Grue in the Attic on September 26, 2008 at 7:03 PM
Don’t underestimate.
Anyone who can count them all deserves a prize.
Loxodonta on September 26, 2008 at 7:03 PM
…oh…that’s just nasty….
Puritan1648 on September 26, 2008 at 7:03 PM
Cindy Munford-
No, when we lived in the Bay area I was fortunate enough to live in Alameda Co.. Nasty Nancy is a downtown girl with all the freaks, and unfortunately all the $$$. It’s a good thing we moved on, prior to Ahhhnold and sanctuary cities- My head would have exploded if I’d had to deal with that!
anniekc on September 26, 2008 at 7:04 PM
I guess it depends on their level of investments in such banks.
But I have heard real estate agents selling Florida $Million dollar properties to wealthy Russians. China, has it’s own problems with tainted milk, but who knows.
Kini on September 26, 2008 at 7:05 PM
Kini:
That is the Paulson plan that the GOP is complaining about, I am talking about the GOP plan they say is geared toward private sector. I have never heard details as to how it actually works.
Terrye on September 26, 2008 at 7:05 PM
LOL Great comeback!
becki51758 on September 26, 2008 at 7:06 PM
…funny…every time I see someone use the word “troll”, I think of billygoats…and bridges…and Lindsey Lohan’s girlfriend/fiance…and Nancy Pelosi…under a bridge…with a billygoat…and Lindsey Lohan’s girlfriend/fiance…and then, usually, I run screaming into the night….
Puritan1648 on September 26, 2008 at 7:07 PM
You’re what…a sophomore at Our Lady of Lost Causes? Nice try Binky.
AubieJon on September 26, 2008 at 7:08 PM
…the necessity of it is disconcerting…but thank you…I’m here all night…try the veal….
Puritan1648 on September 26, 2008 at 7:09 PM
And if this thing does not pass, I think Republicans will lose big time. I really do. The Democrats will find away to blame them and with so many Republicans stating that they do not support the bill and that they want it to fail, it will make it all that easier to pin the blame on the GOP.
People may say they don’t want this to pass, and they might say the public will not like it, but public opinion can change very quickly if this thing gets half as bad as a lot of analysts say it will.
BTW, why didn’t Blunt and Beohner go to Paulson themselves early on if they had a better idea. Since when did Republican Congressmen of their stature sit back and whine that nobody is coming to talk to them?
Terrye on September 26, 2008 at 7:10 PM
anniekc on September 26, 2008 at 7:04 PM
She’s nasty. I just heard a clip from Barney Frank, telling everybody that everything is back on track now that McCain is in Mississippi. Can’t stand those two people.
Cindy Munford on September 26, 2008 at 7:10 PM
Puritan:
Just because someone disagrees with you does not make them a troll.
Terrye on September 26, 2008 at 7:11 PM
It’s the best in the city. But keep an eye out for anyone emerging from the men’s room.
ManlyRash on September 26, 2008 at 7:13 PM
How does that fit with Pelosi saying she doesn’t have enough Democrat votes and it may be until Wednesday?????
CC
CapedConservative on September 26, 2008 at 7:14 PM
From what I understand, the gop’ers are looking for better accountability as to what and where the money is going. Plus, they are looking any money used is paid back with interest. At least that’s what I think they are proposing. Whereas, the Paulson/dem supported bail out is a buyout of the credit institutions.
Bottom line, more versus less government ownership of private corporations. The gop reason is the freddie and fannie gov model didn’t work and got us here. And do we really want the gov to run these businesses with obvious ramifications.
Kini on September 26, 2008 at 7:14 PM
Yup, the Democrats were all set to pass a bill yesterday that has mysteriously swelled from 3 pages to over 102 pages in a week… and is still growing.
What the hell are they doing?
Damiano on September 26, 2008 at 7:17 PM
Kini:
I don’t think so. They do want more protection for taxpayers and all that, but there is a big difference between insurance and debt relief. And so far as I know their plan does not really deal with the debt that is loading the market down. AS for private ownership, that option is there now and people are not taking it because they do not know the true value of the assets. How does the GOP plan deal with any of that? Does it actually alleviate the problem?
The only compromise I can think of that can work is if they find someway to do both, only less of each. Find some way to combine them.
If they don’t do something, it will not be a good thing for anyone. People who think otherwise are dreaming.
Terrye on September 26, 2008 at 7:20 PM
The dems are worried also. Because if they take ownership of any plan and it doesn’t work, then they’re on the hook.
What I think the republicans are doing are taking a deep breath and taking time to think clearly and not emotionally – which is what the Paulson plan is not doing.
The question is: how much of this will really effect the markets if this crash should happen? Will it be as bad as everyone thinks?
Remember Y2K? Business is business, both rely on each other to put food on the table. The credit market might choke a bit, but it will eventually start lending. The real questions is how long will business get back to business.
Kini on September 26, 2008 at 7:21 PM
Damiano:
Three pages was not a bill, it was a framework.
Terrye on September 26, 2008 at 7:22 PM
What they do best, my friend.
ManlyRash on September 26, 2008 at 7:22 PM
I know just what you mean… I’ve had my umbrella up all week trying to keep the sky from falling on my head… nothing yet, but I’m sure it will anytime soon. Unless, of course, the market keeps solving things first. I think interest rates and inflation in excess of 15% should be just about right….
CC
CapedConservative on September 26, 2008 at 7:24 PM
Nancy, if you are going to lead, LEAD! If you are going to follow, follow. Otherwise, get the hell out of the way you useless idiot. Don’t the Democrats have someone better than Nancy the clown? Ditto for that whatever he is leading the Senate Democrats.
You Democrats have the majority in the House and Senate. If you don’t like the Bush request then write up your own.
Maybe for the sake of the country you should relinquish leadership to the Republicans.
Ragnarok on September 26, 2008 at 7:24 PM
Democrats control the Senate, and the House, they are being liars.
Chakra Hammer on September 26, 2008 at 7:24 PM
Sniff… sniff…. anyone smell bacon?
Kini on September 26, 2008 at 7:24 PM
Kini:
This is not Y2K, and if the Republicans take too much of a deep breath they will be run over.
I am totally disgusted with both parties right now. People can give Bush hell, but at least he saw a problem and tried to deal with it. He also showed a willingness to do some compromising. Everyone else is playing politics, pointing fingers, hoping for disaster or pretending one can’t happen, putting party above country and in general acting like a bunch of ill informed children who can not see past the daily tracking polls.
Sorry, but that is how I feel.
Terrye on September 26, 2008 at 7:25 PM
I know just what you mean… I feel your pain. If that damned market has just dropped like a rock today, I would sure have felt better.
CC
CapedConservative on September 26, 2008 at 7:27 PM
I think the GOP plan excludes the warrants, and the insurance plan will be an option which Paulson will have at its disposal, according to Kudow.
His take is here.
phronesis on September 26, 2008 at 7:29 PM
CC:
So where was the GOP leadership when this was going down? If this is all just a fantasy and there is no big deal, why didn’t Blunt and a few other powerful Republicans go to Paulso and demand time and answers? Why sit back and whine about being left out?
But if you really want to go with the there is no problem we can sit on this forever you better send a note to McCain and Blunt and the rest of those Republican leaders up there because they are on record saying this is a serious problem that needs a resolution the sooner the better.
I am just sick of it all.
Terrye on September 26, 2008 at 7:30 PM
Also, McCain tried but failed to put a bill through regulating the lending fannies and freddies. Republicans didn’t really support the maverick at that time either. So there’s adequate blame to go around.
But we have to know, meaning we the people, need to know the details of what rescue/bail out is going to be.
It is… our money.
Kini on September 26, 2008 at 7:30 PM
It never fails to fascinate and astound me to watch Nancy and co. lie with out blinking an eye! Barney Fwank has serious delusions if he thinks he’s going to come out of this unscathed- it may take awhile, but he’ll get his.
remember- there’s still an FBI probe going on.
(unless of course, the FBI is owned by the libs, too)
anniekc on September 26, 2008 at 7:31 PM
phronesis:
Thanks for the info.
Terrye on September 26, 2008 at 7:31 PM
The opened deep in the red and only rallied when news that bailout talks renewed in earnest.
phronesis on September 26, 2008 at 7:31 PM
…just remarking on what comes to mind when the word appears…Pelosi and the Billygoats…great name for a band….
…disagreeing with me isn’t a sign of trolldom…it just means that the offender is either wrong or, at very least, misinformed.
Puritan1648 on September 26, 2008 at 7:32 PM
Ok.
But 102 pages is not a bill… it’s a telephone directory for every pork place in the US of A.
Someone posted here the other day that some state has a law that all bills have to contain no more than one purpose and that purpose must be clearly stated in the bill’s title.
We need that law on the books for the Feds.
Damiano on September 26, 2008 at 7:33 PM
They were letting the committee holding the hearings do their job. They did. It came out of committee and it is now being debated… both houses… both parties. Last I checked, that’s the way the system works. Something probably does need done but that something is NOT buying those bad debts. Making loans available will keep the companies holding the bad loans just as whole as buying them. The only thing making loans WON’T do that buying the bad loans WILL do is save the bacon of all those other folks holding the credit default swaps. I’m sorry, their bacon does not need saved.
CC
CapedConservative on September 26, 2008 at 7:34 PM
Kini:
I am aware of the bill McCain tried to push through in 2005. I am also aware of the fact that Bush tried from 2003 onward to get the regulation for Fannie Mae and Freddie Mac over to Treasury. I know that the Democrats are more responsible for a lot of this. That is not my point.
My point is the here and now. Not something that happened in 1992, or 1995, or 2003 or 2005. And now I hear GOPers complain that they were not included in the process, and I wonder where were they? They did not wait for anyone to include them in the process when it came to immigration, they made themselves part of the process. The Democrats are the majority, the Republicans know that, if they want to be included in the decision making they have to interject themselves, they could have gone to Bush, they could have done a lot of things.
This whole thing is becoming theater.
Terrye on September 26, 2008 at 7:36 PM
The markets took the delay fairly well today. I’m feeling more optimistic. Also, a bill should require 60 votes in the Senate. If it is laden with pork and clauses that are good for members of Congress & their contributors, but bad for the country, I have faith that McCain will spell that out, item by item.
Loxodonta on September 26, 2008 at 7:36 PM
…oh…now you’re being nasty again….
…wait a second…is that Barney and Larry Craig? Are they dating now?
Puritan1648 on September 26, 2008 at 7:36 PM
CC:
What happens if they can’t pay the loans back? How does this deal with the underlying problem of insolvency that results from having all those toxic debts out there? These people have been getting loans for awhile now and all that accomplished was to add to their debt load, how will another loan make a difference?
Terrye on September 26, 2008 at 7:39 PM
I read the China is going to call on our $1 trillion plus debt to them if this does not get settled. I was slow on the consideration on China in this mix.
freeus on September 26, 2008 at 7:39 PM
The only problem with the Kudlow article is that the ownership is in the governments hands, thus the government gets the money back, not us. It’s left for future administrations to either expand the goverment, the Obama plan, versus the smaller goverment, the McCain plan.
That’s not a win win for anyone but the government.
The problem with this solution in it’s current form, the bail out, doesn’t stop banks from making bad loans. If any bill passes it needs to have protections to prevent this from happening again.
Kini on September 26, 2008 at 7:41 PM
Loxodonta:
I think they took the delay pretty well because they believe there will be some kind of package. If on the other hand days pass and nothing happens, the slide could begin again. That is what happened before.
But however, feckless our political class may be sometimes I just can not believe they would play this game forever, sooner or later they have to end this. And I think that if it ends with a compromise package, things might work out pretty well. If no one screws it up.
Terrye on September 26, 2008 at 7:42 PM
Damiano:
As bills go that is not too bad really. And the more concerns people have, the more guarantees they want, the longer it will get.
Terrye on September 26, 2008 at 7:43 PM
There is a massive overwhole of the regulatory structure going on. I’m not sure if its included in this bill or not,but in defintely being worked on in Congress right now.
phronesis on September 26, 2008 at 7:45 PM
Kini:
No matter what they do, any kind of return they get will go to the government. How else can it be?
Terrye on September 26, 2008 at 7:45 PM
You lost me… First. If they don’t pay the loan back (that they get for a loan they have that went bad), we are no different than where we would be if WE (the people) bought the loan in a bailout and it went bad. However, they must FIRST attempt to collect on any credit default swaps they hold on that loan. If they collect the loan or on a credit default swap. It costs US NOTHING. Remember now, these are the people we are concerned about.. those holding and making loans. We could give a sh*t about the guy holding the credit default swap that goes out of business having to try to make it good. If their debt load is so high now that they cannot survive, then they should be out of business.
CC
CapedConservative on September 26, 2008 at 7:46 PM
Anybody interested. Here is some very good reading and explanation of credit default swaps and how this is the true problem they are trying to fix.
Bailout of AIG was directly caused by Credit Default Swaps:
FANNIE/FREDDIE bailout caused $1 Trillion of Credit Default Swaps to trigger…
Proof that settling debt at or close to par is a bailout of credit default swaps:
Closing the barn door after the horses are out:
Excellent explanation of the credit default swap bailout.
CC
CapedConservative on September 26, 2008 at 7:58 PM
Russia’s been in an economic pickle of its own making since August. The markets didn’t react well to their howitzer-housefly action in Georgia, and they’ve seen the largest outflow of capital since they defaulted on debt 10 years ago. Bad Ivan! No biscuit!
China’s stock markets lost 8 years of gains before the sovereign wealth fund was called in.
DrSteve on September 26, 2008 at 7:59 PM
But Nancy; didn’t you and Harry (cadaver) Reid tell us just two days ago that if this bill wasn’t passed before TODAY that the entire world economy would crash …TODAY?
LegendHasIt on September 26, 2008 at 7:59 PM
I beg to differ. When I checked in here this morning, the first post I saw was “the market is tanking”. It was down about 120…. hardly considered deep in the red these days.
CC
CapedConservative on September 26, 2008 at 8:00 PM
This is from the link from phonesis linked to, it has a lot of interesting information:
I don’t think a lot of folks understand this win-win scenario. Let me repeat: The taxpayers own the bonds the Treasury buys; the taxpayers own the cash flows generated by the bonds; the taxpayers own the profits when the bonds are sold; and the taxpayers benefit when the profits and cash flows are used to pay-down government debt.
Actually, for taxpayers, it’s a win-win-win-win.
Think about this. The troubled assets purchased by the Treasury right now are likely to be very under-priced because of the chaotic and frozen market conditions. But over time, through monthly cash-flow payments or through loan sales, taxpayers will get all their money back and in great likelihood a handsome profit.
I have been in conversation with leading House Republicans all day. And they understand these key points. Unfortunately, this understanding did not materialize in their original meeting with Mr. Paulson a few days ago. But now the actual reality is sinking in.
Another point: Republican leader Eric Cantor has an excellent idea for a federal bond insurance guarantee for straight mortgage-backed paper, financed by private-sector insurance premiums. That will improve investor confidence in mortgage bonds and will make those bonds highly marketable. Importantly, senior Treasury officials have told me that Mr. Paulson will accept the insurance idea as an option in the final bill, alongside the ability of the Treasury to purchase distressed assets.
He also says the ACORN stuff is to go. It answers a lot of my questions.
Terrye on September 26, 2008 at 8:00 PM
My point is, shouldn’t that return go back to us and not the government? The underlining causes of the lending problem is the rules need to be changed. Bailing out lenders with out safegards will only encourage them to do the same again because the government will come to the rescue.
Beyond what the bill should include in protection/insurance, there has to be other incentives. Eliminate the capitol gains tax, the estate tax, alternative minimum tax. Do that then watch the economy grow in leaps and bounds.
Kini on September 26, 2008 at 8:01 PM
Lemme see if I have this straight:
* We begin to see the cracks in the masonry when the “collect your 40 acres and mule” policies of “government sponsored companies” over-reach their mandates….
* We see banks, which jumped on the gravy train over the last 10 years, begin to find that they’re holding, and have been trafficking in, bad paper, begin to rattle and hum….
* We’re told by, in some cases, the very architects of this mess that we’d better throw a basic sh*tload of money at the problem or the whole thing’ll come crashing down….
* A meeting is held to discuss a 3-page “agreement” — no better than a junior-high schooler’s term paper outline — on the table, which’d better be swallowed whole or said miscreants will hold their breath until they turn blue….
* 3-pager is loaded with hidden goodies to friends (how this problem got started in bank-dom)….
* It being damned hard to hide even the thinnest goodie in a 3-page document, even one written by me, a smell begins to rise to the ceiling….
* Adults show up to said meeting and, smelling said smell, decide that as bitter as the problem is, this pill is worse.
* People begin to topple over, kneel as to the Pope, hyperventilate, wave their hands in the air…and that’s just the media….
* …and the guy on the white horse is stuck in traffic….
First they create the crisis, then they propose an unrealistic and frankly rather odious solution, and then they begin gesticulating like spoiled children when their thinly-veiled chicanery is held up to the light.
…Obama is the perfect standard-bearer for the Democratic Party…all hat/no cattle….
Puritan1648 on September 26, 2008 at 8:02 PM
CC:
The markets are on hold. I don’t think you will see any real negative stuff if they get a deal in the near future.
Terrye on September 26, 2008 at 8:02 PM
Kini:
Theory has it, we are the government. Kudlow said the agreement in writing {I guess} is that the profits go the National Debt. all of them, 100%.
I also think the GOP bill mentioned tax cuts.
Terrye on September 26, 2008 at 8:05 PM
Thanks!
I’m a know-nuthn about all this high finance stuff but I couldn’t help but wonder how China calling in our debt helps China. We go down, the EU goes down and all those Barbie Doll and microprocessor plants along the Yellow River suddenly become worthless too.
Like I said, can’t see how China, or Russia, would want us to tank. It would mean they all tank too….right?
Limerick on September 26, 2008 at 8:05 PM
The impact of this is speculation. We have lots of people threatening doom and other saying it will not be that bad. One thing is for certain. Tossing a trillion dollars into the an economy that currently only has a little over 7 trillion in M2 (money supply used to estimate inflation) will be EXTREMELY inflationary.
CC
CapedConservative on September 26, 2008 at 8:08 PM
The assumption is these bonds will increase in value over time.
There is no guarantee that will happen. It assumes there is no risk.
Kini on September 26, 2008 at 8:08 PM
CC:
I think the Cantor/Paulson plan linked to above has more details, but the original GOP plan did not really deal with the underlying problem, that is the toxic assets. In other words, as long as they are out there and they can not be valued just loaning more money may not help.
Terrye on September 26, 2008 at 8:10 PM
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