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horgad
1000+ Penny Miser Member
USA
1641 Posts |
 Posted - 09/25/2008 : 15:14:30
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When confronted by a bunch of bankers and Wall Street executives, our representatives folded like a cheap suit.
-----------------QOUTE----------------
Lawmakers reach bailout deal
By Jason Szep 39 minutes ago
NEW YORK (Reuters) - Lawmakers reached basic agreement on a massive financial bailout plan, lifting world stock markets, sending the dollar up and breathing life into troubled money markets.
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The breakthrough on a $700 billion rescue plan was sealed ahead of a 4 p.m. ET emergency meeting with U.S. President George W. Bush and the two men battling to succeed him, Democrat Barack Obama and Republican John McCain.
Sen. Christopher Dodd, chairman of the U.S. Senate Banking Committee, said House of Representatives and Senate negotiators had reached "fundamental agreement" on a set of principles guiding a bailout bill.
Republican Sen. Robert Bennett of Utah, following a closed-door meeting of lawmakers negotiating the bailout package, said, "We now expect that we will have a plan that can pass the House, pass the Senate and be signed by the president."
Lawmakers declined to provide details of the plan, but it is expected to include limits on executive pay and strong oversight provisions.
News of an agreement stabilized beleaguered money markets that were frozen by a reluctance by banks to lend. The rate on one-month U.S. Treasury bills shot higher as traders unwound safe-haven trades.
Still, officials from France to China voiced alarm.
"A crisis of confidence without precedent is shaking the global economy," French President Nicolas Sarkozy said in a speech. "A certain idea of globalization is drawing to a close with the end of a financial capitalism that had imposed its logic on the whole economy and contributed to perverting it."
The swirl of meetings in Washington followed fresh turbulence in the world economy.
Orders for costly U.S. manufactured goods plunged in August, new-home sales hit a 17-year low, while new claims for jobless benefits shot up last week, according to government reports that showed the world's largest economy rapidly weakening.
Top U.S. industrial conglomerate General Electric Co, widely seen as a bellwether of the U.S. economy, issued a profit warning, citing "unprecedented weakness and volatility" in the financial services market.
The crisis reverberated in Amsterdam and Brussels, where Fortis NV, the Belgian-Dutch financial services group, denied a rumor that the Dutch Central Bank had asked a Fortis rival to support the company's liquidity position. Fortis shares sank as much as 21 percent to 14-year lows.
In Asia, hundreds of people lined up outside the Hong Kong branches of the Bank of East Asia Ltd, some sleeping there overnight, to withdraw their savings amid fears the bank could be Asia's first victim of the year-old credit crisis.
More than 400 customers crammed into the bank's only branch in Singapore, despite assurances from the city-state's monetary authority that the bank was sound and news that billionaire Li Ka-shing had bought stock in the bank in a vote of confidence.
China's banking regulator sought to reassure jittery financial markets, denying a report that it had told local banks to stop lending to U.S. banks and stressing that foreign bank operations in China were healthy.
INTENSE BAILOUT TALKS
Signs of a breakthrough on the rescue package, which aims to stave off a widespread financial meltdown, gave beleaguered U.S. stocks and the U.S. dollar a boost.
The Bush administration hopes to restore liquidity to financial markets and revive the foundering U.S. economy by spending $700 billion to buy up toxic mortgage-related securities and other sour assets held by financial firms.
But just weeks before Americans go to the polls to elect a new president, critics are concerned the plan will let freewheeling bankers off too lightly, and doubts have surfaced over whether it can solve the wider crisis.
Lawmakers are seeking several concessions from the White House, including a curb on the pay of executives whose companies seek government help, and a provision that would give taxpayers an equity stake in some of the companies so the government can profit if they prosper in the future.
"I'm optimistic (the bailout) will pay for itself and make money for the taxpayers, especially if you (the government) take an equity position that makes these companies healthy," House Speaker Nancy Pelosi, a California Democrat, told reporters.
"The money comes back to the Treasury," she added.
U.S. STOCKS, DOLLAR RISE
U.S. stocks rose more than 2 percent, while the dollar rebounded on news of a deal in Washington.
"I certainly think that Congress will pass something and that will help for a little while," said Warren Simpson, managing director at Stephens Capital Management in Little Rock, Arkansas.
Concern lingered, however, that even if Congress approves a bailout, it may lack the muscle to save the U.S. economy from recession or a steep economic tumble, potentially squeezing the slowing world economy.
"The U.S. may be closer to reaching a deal to approve the bailout, but there is still a lot of uncertainty on its overall impact on the economy," said Mark Pervan, a senior commodity strategist at Australia and New Zealand Banking Group Ltd.
German Finance Minister Peer Steinbrueck said one outcome of the crisis would be a less dominant role for the United States in the global financial system.
"The United States will lose its superpower status in the world financial system. The world financial system will become more multipolar," he said.
(Reporting by Richard Cowan, Alister Bull, David Lawder, Kevin Drawbaugh, Glenn Somerville, Noah Barkin, Richard Leong and Ellis Mnyandu. Writing by Jason Szep and Jason Neely; editing by Jeffrey Benkoe and John Wallace)
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Edited by - horgad on 09/25/2008 15:20:47 |
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horgad
1000+ Penny Miser Member
USA
1641 Posts |
Posted - 09/26/2008 : 08:31:26
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| I guess that was a little premature. Some of the folded suits that we elected to represent our interests are fighting back now. The green light is back to yellow. |
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Tourney64
1000+ Penny Miser Member
USA
1035 Posts |
Posted - 09/26/2008 : 08:40:15
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| Why isn't the dollar falling like a rock? |
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swusc
Penny Hoarding Member
USA
553 Posts |
Posted - 09/26/2008 : 08:47:17
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quote:
Originally posted by Tourney64
Why isn't the dollar falling like a rock?
Why would the dollar fall? In bad times... cash is king!!
-SWUSC |
`Everybody is ignorant. Only on different subjects.' Will Rogers
"This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the "hidden" confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard." Alan Greenspan, 1966. |
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horgad
1000+ Penny Miser Member
USA
1641 Posts |
Posted - 09/26/2008 : 08:48:10
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quote:
Originally posted by Tourney64
Why isn't the dollar falling like a rock?
In a word "intervention". The US has been using up its foreign currency reserves to support the dollar and other countries have been helping as well. The blue line falling is us selling Euros to buy dollars.
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Edited by - horgad on 09/26/2008 08:53:32 |
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horgad
1000+ Penny Miser Member
USA
1641 Posts |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 09/26/2008 : 12:14:49
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Why would the dollar fall? In bad times... cash is king!!
I hate to say this,
but fiat cash is the imposter sitting on the throne.
(Just as the Zimbabweans learned, the Argentinians learned, the citizens of The Wiemar Republic learned, the citizens of Israael learned-not once but four times! cash backed by nothing ain't king.) |
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coppernicus
Penny Collector Member
USA
383 Posts |
Posted - 09/26/2008 : 23:05:26
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| horgad - Great Link! |
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Bailout Gets A GREEN light
Forum Locked
