Wall Street Twists and Turns in Agony, $1.3 Trillion Plunge
John Terrett, Al Jazeera’s correspondent in New York, said “I’ve never seen anything like this before.
The US bail-out package
“We’re seeing quite literally shocking scenes on the floor of the New York Stock Exchange.
“People were standing around unable to know what to say to each other or what to do next … The open-mouthed, shocked looks on the faces of the people on the stock exchange floor is something I will remember all my life.
“Investors are reacting to the fact that this bill has failed.”
He said that traders had been expecting the bail-out plan to have been voted through before markets opened on Monday.
“A lot of people were walking around Capitol Hill saying, “don’t vote for the bill,” and now it has collapsed. This was not the story we were expecting to tell today.
“We’re in completely unchartered waters once again.”
Congressional leaders on both sides of the U.S. political spectrum – both Republican and Democrat – voted against the bill, which was defeated 228 to 205.
Some Republicans who voted against the bill had called it “socialism,” while Democrats not onside with the biggest bailout in U.S. financial history said they were concerned the bill didn’t contain enough provisions to help homeowners.
The news sent stock markets on both sides of the border into a tailspin. The TSX was down 897.93 points, or almost eight per cent, at 3:19 eastern time while the Dow Jones had suffered a loss of 640.93 points.
Media coverage of recent events on Wall Street is really starting to get on my nerves. The media continues to promulgate the Washington fairy tale that taxpayers may actually make a profit on the money used to bail out Wall Street. What a joke!
If money could be made on the toxic assets held by U.S. financial institutions, why aren’t the private equity funds or the sovereign wealth funds falling all over themselves to purchase these assets? If these assets were any good, why is there basically no market for them? The answer to these questions is that these assets are nearly worthless trash. And your government is going to buy them.
Where is the outrage? If a financial institution is “too big to fail,” is not that same financial institution too big to be leveraged at 35 to 1 or higher?
After bragging today about his role in shaping the economic bailout package, Sen. John McCain (R-Ariz.) made no statement to the press after the defeat of the bill, in part at the hands of House Republicans.
Instead, McCain boarded his Straight Talk Air charter plane, where he sat in front, separated from reporters by a brown curtain, without making a comment on the bill’s defeat.
Holtz-Eakin said. “Their partisan attacks were an effort to gain political advantage during a national economic crisis. By doing so, they put at risk the homes, livelihoods and savings of millions of American families.”
The adviser also blamed remarks delivered by House Speaker Nancy Pelosi, chastising President Bush’s free market economic policies, for pushing Republicans away from the bill.
Obama’s campaign released a statement hours after the House of Representatives voted 228-205 against President George W Bush’s 700- billion-dollar bailout package.
The failure in the lower House showed why US voters are “disgusted” with the leadership in Washington, campaign spokesman Bill Burton said.
“Now is the time for Democrats and Republicans to join together and act in a way that prevents an economic catastrophe,” Burton said.
“Every American should be outraged that an era of greed and irresponsibility on Wall Street and Washington has led us to this point, but now that we are here, the stability of our entire economy depends on us taking immediate action to ease this crisis.”
The Dow Jones plunged by more than 7% on the news – just 3% less than an official crash. It closed down 777.68 at 10365.45.
Great going Bush. Thought it was smart to tell McCain to “rush to Washington” and mess with the process. The scab has been pulled off the gaping wound that is America’s economy. You remember that guy … Bin Laden? Well, terrorist damages don’t always have to be bloody. They can be green. Bin Laden is more market savy than you will ever be. Isn’t it interesting that mostly “coalition” allies are being hurt the most by Wall Street meltdown. Yes, China and India are being squeezed, but they can take the bruises. Saudi Arabia, UAE, Qatar and Egypt can be impacted, but only because they own so many American assets.
Isn’t it interesting that Russia is bold enough to make a nuclear deal with our errant buddy Hugo Chavez, while we are distracted. Chavez, Putin in nuke deal Russia has agreed to dispatch long-range bombers and warships to Venezuela for exercises near US waters. During his global tour, Mr Chavez forged key military and energy cooperation deals which analysts said seemed likely to put him on a dangerous footing with the US. Russia’s Energy Ministry announced that the two countries would also form a consortium to invest tens of billions of dollars in oil and gas projects in the South American country. Venezuela is the world’s ninth largest oil producer and a major supplier to the US..
A few $Billion here and there actually do add up. The bottom of our barrel must be pretty close now. America’s survival, now, depends on those nervous foreign countries who own us. America’s arrogant interpretation of capitalism has run out of excuses. We all suffer from the misinformation we were fed. That’s why the house vote failed. The American public is never invited to the table for explanations. We are always on a “need to know” consideration. Without transparency and accountability, Americans cannot and will not trust the partisan spin doctors. That was made very clear today. Who can trust the Bush Administration, anyway?