patrick.net

Neutron, on c-span.org front page.

Does this means Hank Paulson will turn in his resignation? Or Bernanke? I don't think that would actually help anything. Better they stay until the next president decides who he wants to appoint.

My stocks are down big time, and my short positions were too small to provide any cushion. My 401K - fully invested has lost huge money - big portion today.

Still, the fact that this particular bail out bill not passing makes it all worth it. I know we are screwed no matter what. But this bail out would have screwed us without any tangible hope of help.

Let the other alternatives now come to forefront.

Paul,

Yes, this is a small victory for democracy.

> Where can I find a record of the votes? I want to see how my reps voted.

Yes, if anyone can find a record of how our "Representatives" voted, please forward it to p@patrick.net

I will happily repost it on my site so that we all know whom to kick out of Congress at the first opportunity!

The gubermint websites are not responding.

I do think it is funny how people say there is a huge fire and it needs to be put out. These people know nothing about firefighting.

My job requires that I fill the role of a Fire Birgade. The firebirgade are the first guys on the scene of a fire at my work and we are tasked with dealing with it.

One thing we are trained over and over to do is not risk our lives for a fire. If the fire is bad enough, let it burn and just protect the exposures. This means keep it from spreading to other structures by using water curtains or spraying it down with water streams. This means the thing on fire is going to be lost. Knowing when to let something go is very important! Why risk more to save something that is beyond salvage?

Roll call 674 votes are at:

http://clerk.house.gov/evs/2008/roll674.xml

Every economist believes that we need a bailout.

Huh? We certainly do not need a bailout. We need to prepare for a recession or a depression.

Many economists agree that recession is a necessary evil.

StuckInBA Says:

My stocks are down big time

Yes, but notice that each time recently that we have had a 300-500+ drop, the stocks recover rather quickly. Even the '87 crash fully recovered in one year. Lets see how low the stocks will be next week.

Once again I miss the new thread... holy crap, the Fed is expanding TAF by $300 Billion to $450 Billion total. We don’t need no stinkin’ Paulson Plan. As I have previously pointed out the Fed has a little less than $300Billion in Treasuries available (almost $200B are unavailable as they have been swapped out through TAF). Looks like the Treasury will continue to hold a bake sale for the Fed. Again I ask, do they need Congressional approval, or is this now the Ben and Hank show?

Thanks justme! I copied it and added a few notes to make it clearer that we should kick out the Ayes as soon as possible:

http://patrick.net/housing/contrib/roll674.html

Patrick,

Actually, I am not in favor of kicking out the AYEs. Many of them are solid and well-meaning representatives, and there should be no judgment on whether they were wrong or not until we see how this all plays out. This decision is not practically irreversible, unlike the similar and very ill-fated decision to go to war in Iraq.

We shall see how well we do without the bill.

It is quite possible, as Headset says, that the dip in the market will not last very long. Personally I think today looked promising in terms of market reaction. I think someone said that the market first did not like that the bill was going to pass, and then it didn't like that it did not,. All in all it was a 7% day. It could have been much worse.

And EBGuy just wrote about a new 300B addition to the Fed Term Auction facility. This might be enough to tide the worst over and let a more free market do its job.

“…gave proof through the night that our flag was still there…”

...where the flag pole was anybody's guess, but Paulson was sure walking funny.

I'm sorry, anyone who voted to spend $700 billion of taxpayer money to buy distressed mortgage-backed bonds at OVER market value, rewarding the exact behavior that got us into this, is definitely guilty of betraying the people.

Especially since the vast majority of people recognized this for the scam it is and were against it. Our representatives should represent us. They did, but just barely.

The ones who did not represent us should not be forgiven. They failed.

I agree with Patrick! If they voted yes for the bailout, throw them out of office! Run their asses out of Washinton on a rail!

Oh ho.
This is but the first dip. We are seeing 401ks flight to security. Even more importantly tomorrow is "Redemention day" at the hedgies. The massive sell-off will pop them and drive the markets to heck. Also, after the hedgies pop, they will simply say 'bankrupt' and all that borrowed moeny they used will go bad. And wow, at up to 50:1 that is a ton of debt going bad.
Bond market will go bad. I am curious to see Mr. Gross' much hyped Plan B.
People's flight to cash will onlybe changed by inflation scare, and I simply cannot believe the Fed would do that on purpose.
Also, we FINALLY saw Europe get it. They are worse than us. I predict Germany will be the first bank that drops the EU central bank. More will follow. Italy and Spain will be hardest hit at first.
Like the US, the British Pound is backed by the taxing authority of Mother England. But as a country whose wealth and workforce are in the financial sector, they will be disproporitannly hit. Pound sterling may hit dollar parity by years end.

In the end, calling the bluff of the Financial gang was the right thing t do. So many resrouces are so misallocated now. I want to see all those quant mathmatecian PhDs working on real problems, like: 50% solar cell effeciency, algea biofuels, fusion, cheap de-salinization, etc

Pound sterling may hit dollar parity by years end.

If you prediction comes true. I will consider you an Oracle (as in Delphi, not database). Is anyone else predicting that?

Dollar-Quid parity would make it cheap for me to take my family to see all our bloke relatives.

Oh yeah genius! Free market, democracy - more like idiocracy! People have no idea!! When they all lose their jobs they'll look back on this say that that was the day we could have done something and we failed ourselves.

US stock markets lost $1.1 trillion today. Most of that came out of people's retirement accounts.

So people voted to lose money - far more money in the future than this plan would have cost. Brilliant!!

If you prediction comes true. I will consider you an Oracle (as in Delphi, not database). Is anyone else predicting that?

I am not so brave... but dollar-euro parity may be a reality.

Not investment advice

When they all lose their jobs they’ll look back on this say that that was the day we could have done something and we failed ourselves.

Coulda, woulda, shoulda. Meaningless.

Exactly! Today was it. It's done. Depression here we come!

The previous industrial might of the US was daunting. We could make machinary that was less expensive and with higher quality than the rest of the world. And we did very well as an export nation.
Now we have a massive trade imbalance and simply paying the interest on our debt is causing huge piles of cash to build up in foregn ledgers.
While we, likely, will not be an export nation for a while as all other economie are adversely affected, we do at least have a very well developed domestic market.
We are simply better positioned to weather this crises.

As for the pound. Timing is so hardto call. I thought we would be at DOW 10,500 months ago. So, 3 months to sterling parity? maybe not. I just do not see the way clear for England to dig out from their problems with their 1 trick economy.

I have lots of money in Key Bank. I also know they have massive amounts of land in a RE trust where I live. I wonder what the chances are of them selling some of it to me to raise capital?

When they all lose their jobs they’ll look back on this say that that was the day we could have done something and we failed ourselves.

Look, we can prop up this sytem until it looks like a Dr. Seuss tree house, but that is still not going to prevent it from falling, as far as I can see. Yeah, people are going to get hurt, me included. But keeping it up in the air just so it doesn't fall down tomorrow is not the best use of yet another $700B of borrowed money. And when it hits the ground the next day, we could then say, "Why didn't somebody stop that crazy bailout bill!?!"

The system's broken (and broke). Time to take our medicine and fix the damned thing.

No - today was the day we say to Greenspan, "That was not economic growth basedon productivity gains, those were fake gains based on shadow banking and leverage"

And that $1.1 that disappeared today, that money that was NEVER real.

Paper gains. Paper losses. C'est la'vie.

But I do feel bad for retirees. No idea what we can do for them other than give em a desk and say, "Working in your 70s in high tech is easier than hefting bricks" I really don't mean to sound callous, but the short term recovery to Dow 14,000 isn't in the cards and if reitrees were havy into the market - yeowch.

Shit I feel just terrible for all those people who lost money in their 401k's. But what truly puzzles me is how this could happen? I thought everyone in the bay area was rich beyond compare and everyone that lives there were not only baller programmers but financial geniuses? What gives? You Bay Area residents shouldn't worry, you can always use your house equity. Plus the vigorous manufacturing section will weather all storms.

Shit that is just never going to get old.

How does it feel mother fuckers?

When Bear Stearns went under, the Fed put up $30 billion in taxpayer dollars in order to....prevent Lehman/Merrill and the entire financial system from collapsing.

Well, what happened? Six months later, Lehman & Merrill collapsed along with the entire financial system. So the taxpayer lost $30 billion to delay a collapse for six months.

Maybe $700 billion could buy us a year or two...but the financial collapse is coming. Let's just rip the band-aid off and get it over with...

NO BAILOUT!

But I do feel bad for retirees.

Sorry, I do not feel bad for them. They should have seen this coming.

So if you take a giant shit log (BA?) and slice it into very thin slices apparently it does not really smell that bad, but when you go to make a shit sandwich, man it reeks. I guess if you end up with too many shit sandwiches you can always petition the government to buy your shit sandwich stand.

Love the boomer fuck Paulson. He just reeks "trust me".

Suck it long, suck it hard. Get back to work code monkeys.

I'm just worried that this will happen: the Dems will put back in the concessions to the GOP they pulled (e.g. $$$ for ACORN) and pass it on a strictly partisan fashion tomorrow.

Dennis, the bill *will* be passed sooner or later, in one form or another. There is only *one* Ron Paul. :(

Sorry, I do not feel bad for them. They should have seen this coming.

I don't. Even if they could predict the housing market, they might not have been savvy enough to do something with their money to "protect" it.

I’m just worried that this will happen: the Dems will put back in the concessions to the GOP they pulled (e.g. $$$ for ACORN) and pass it on a strictly partisan fashion tomorrow.

Well, not tomorrow, 'cause they're taking Rosh Hashana off. No. Really. Their self-described *Henry Paulson-end-of-the-world-financial-armageddon-48-hour-doomsday-clock* is ticking well into T+12 days, ohmygodweregonnadie!!!!!

...but they'll be back Thursday.

But yeah, they may very well then pass the ACORN version on a party-line vote. BUT then it has to get past the Senate, (which could miss cloture) which almost certainly means a more moderate bill, then back to conference, and another opportunity for those fine upstanding reps of ours to show some backbone. Or at least their talent for self-preservation.

And when it goes to the Senate, there are a couple of Senators (M and O) who then get to show their worth. :)

Let's see...the Senate has 49 Dems, 49 GOPs, Lieberman and one other I. Tie goes to Dick Cheney.

Why is options liquidity so shitty nowadays? The bid-ask spreads are horrible even for large-cap stocks options.

Peter P :

When volatility is so high, the market makers often increase the spread. I haven't noticed any major drop in open interest.

I was watching Nightly Business Report on PBS just now, and they were trotting out one `talking head after the other that said congress better had pass the bill or else. No surprise there,

The only voice of reason was John Bogle of Vanguard fame. He basically stated that we need a support deal, but that it should be based on equity purchases and not bad asset purchases. Now there is a guy that I can support. He has always been in favor of the shareholder (that's you, surfer-x :-)) rather than the management.

If we must have a bailout, ANYTHING is better the the cuurent POS.

Why all the posturing? Why didn't Congress serously consider something else. What is Paulson not telling us?

"englishman26 Says:
US stock markets lost $1.1 trillion today. Most of that came out of people’s retirement accounts."

Then it's their own darn fault for not actually saving, and buying into the idea that investing=saving. Investing has risk, and if you lose, you have only yourself to blame for gambling.

Pay attention to your money. Nobody else is going to look out for your best interests; that's your job.