Tag Archives: financial crisis

A lot of zeros…

What is to blame for not  getting the rescue plan through? Republican ideals or Democratic politicizing?

Representative Adam Putnam of Florida, the No. 3 House Republican, said Pelosi’s “speech cost us votes” because it set a “partisan tone,” a reference to her comment before the vote blaming Bush administration policies for the crisis.

Democrats voted 140 to 95 in favor of the legislation, while just 65 Republicans backed the bill and 133 opposed it. Bloomberg.com

If so, what did that look like?

“Bush’s policies got us into this mess.”

Joe Blow Republican replies, “That’s a personal and party insult! I’m voting ‘no’!”

I’m not sure whether the bailout is a great idea, but I’m a little nervous about the alternative. On the other hand, I’ve a feeling that this is only a plan to get us through November 2008. With banks failing throughout Europe, this crisis is taking on a semi-global dimension, so I’m not sure buying bad debt in America will do much good at all in a globalized economy.

Besides, I’m not sure that $700 billion is really a significantly large number:

The Dow Jones-Wilshire 5000 folks say the stock market lost $1.2 trillion in value today. Year-to-date, the figure is $4.2 trillion. […]

If the stock market closes tomorrow unchanged, this will be the third-worst month for the S.&P. 500 since World War II. The two months that were worst marked panicky lows, so perhaps there is hope. (NYT)

Bets for tomorrow? I’m thinking we’ll see another significant drop. Maybe the index will drop a cool 1k in a day?

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German Economics Experts

The German perspective on the bailout:

It’s not a call for assistance; it’s a scream for help. US Treasury Secretary Henry Paulson is asking other countries to help buy up bad US debt. The US government is putting up $700 billion in taxpayer money in the hopes that the measure might restore stability in the financial system. Some countries are planning to help. But the German government has answered this call quickly and clearly: no.

Economics experts think that’s the right response. As they see it, in the long run, those responsible for the crisis — who have been cashed out with high salaries and bonuses for years — will not be penalized for billions “but will be let off the hook like everyone else,” says Carsten Meier of the Kiel Institute for the World Economy IfW. According to Meier, by injecting capital into the market, the US government is putting everyone who speculated and lost back on their feet and thereby standing in the way of a market cleanup.(Spiegel Online)

I’m not sure I’ve heard anyone in the States formulate it quite that bluntly.

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