I was rather surprised to see this bill become rejected, perhaps in part because of my bias assumption that all members of Congress would buckle in as usual and simply cast a "yay" vote. Apparently common sense and intestinal fortitude was somehow miraculously manifested in Washington Yesterday, which is great-but surprising news.
And now the international backlash, there is just an incredible bitterness that has engulfed major world markets along with their corresponding major news agencies.
Bernd Weidensteiner, analyst at Commerzbank states "A number of possible options are now being discussed. A revised version of the package might be put to the House again for approval, and to up the pressure on the house, the Senate might be asked to vote first. The package would almost certainly be approved there
If they are asked to vote first, without reading the bill under "pressure". Sounds like a common crime in politics known as DURESS.
Perhaps the most unnerving article I have read thus far is a commentary piece in the Financial Times of London by Willem Buiter, in which he writes "Opposition to the proposal came from two different sources. A few remaining libertarians and believers in unfettered free enterprise voted against. Even when they recognise the risk that a calamitous collapse in economic activity may result, they view this as a form of creative destruction that is an integral part of a Darwinian market economy. I dont know anything about Gresham Barrett, a Republican congressman from South Carolina but his statement fits the bill: My fear is the government will be forever changing the face of the American free market. Because I believe so strongly in the principles of the free market and the belief in freedom, I will be opposing this bill. Those who genuinely hold these views are mad, but honest and principled. I wish them a good depression." bear in mind this is not a rambling by a college student, but rather a "Professor of European Political Economy".
Judging by his rather naive statements, it is apparent that Buiter has not actually read the draft of the Bailout, in fact neither has many members of congress due to "Congressional Martial Law" (Not to be confused with Domestic/military martial law) in which case it severely undermines the input of a congressional members constituents.
But there does remain a few noble economist who see the bill for what it is, a severely flawed legal instrument. Joseph stiglitz writing for the London Guardian (Guardian Unlimited) writes "US treasury secretary Henry Paulson's approach is another example of the kind of shell games that got America into its mess. Investment banks and credit rating agencies believed in financial alchemy the notion that significant value could be created by slicing and dicing securities. The new view is that real value can be created by un-slicing and un-dicing pulling these assets out of the financial system and turning them over to the government. But that requires overpaying for the assets, benefiting only the banks"
In any event, I was correct in my past video about my assumptions on Washington Mutual, AIG, and now included into the growing list is Wachovia.
What's next? a country?
1.Joseph Stiglitz 'Bail-out blues"Tuesday September 30 2008 10:34 BST Guardian Unlimited/London Guardian
Guardian.co.uk
http://www.guardian.co.uk/commentisfree/2008/sep/30/marketturmoil.wallstreet
2.Kathryn Hopkins(Bernd Weidensteiner commentary)"US bail-out plan: What the economists say" Tuesday September 30 2008 10:59 BST London Guardian/Guardian Unlimited. Guardian.co.uk
http://www.guardian.co.uk/business/2008/sep/30/wallstreet.useconomy
3.Willem Buiter "Those whom the gods would destroy, they first make mad"September 29, 2008 Financial Times of London FT.com
http://blogs.ft.com/maverecon/2008/09/those-whom-the-gods-would-destroy-they-first-make-mad/
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