DOW falls by more than 500 points as House votes on Wall Street Bailout

[Lenin's Law]

Very interesting developments here in the US, as Congress remains skeptical to pass the bailout , investors send their disapproval as DOW falls by more than 500 points. Funny how the so called "party of the people" the Democrats are even more supportive of bailout of the millionaires on Wall Street than the Republicans are. This is going to be great stuff to build class consciousness among the people.

[Psy]

Very interesting developments here in the US, as Congress remains skeptical to pass the bailout , investors send their disapproval as DOW falls by more than 500 votes. Funny how the so called "party of the people" the Democrats are even more supportive of bailout out the millionaires on Wall Street than the Republicans are. This is going to be great stuff to build class consciousness among the people.

Like the saying back in Paris May 1968 "The economy is wounded, I hope it dies!"

[BashTheFash]

"The economy is wounded, I hope it dies"

:thumbup::thumbup::thumbup::thumbup::thumbup::thum bup::thumbup:

[Lenin's Law]

Bailout defeated.....for now at least.

CNN and the corporate media is now telling us that we need "to suck it up, hold our noses and accept the bailout"

I say FU, capitalist pigs. It is to the immense credit of the American people for their militant opposition to this bailout and their rejection of the huge propaganda offensive by the entire ruling elite: the leadership of both political parties, both presidential campaigns, the entire corporate media trying to scare us into accepting what is a bailout for the reckless greed and speculation of Wall Street capitalists.

[Sprinkles]

Has McCain already promised he will chase the economy to the gates of hell?
He'll probably fly out in his private corporate jet to defeat it, but get shot down in the process and end up being captured by the lobbyists.

Edit:

Bailout defeated.....for now at least.
Guess I was right.

[Lenin's Law]

Dow now flirting with biggest 1 day drop in US history.

[Os Cangaceiros]

The U.S. financial system is on a wild rollercoaster ride right now. After the last drop, it shot back up on the news that our wonderful government would prop up the banks. :rolleyes:

It looks like it may be all downhill from here, though.

Don't worry, though: the U.S. government isn't going to let anything truly drastic happen, even if it means the blatant fleecing of every member of its citizenry. And you know what the sad thing is? We're all just going to sit here and take it, all the while believing that it's in our best interests.

[Die Neue Zeit]

The more important development is the plunge in the price of oil barrels, at one point at only $95:

http://ca.news.yahoo.com/s/capress/080929/business/oil_prices

[Psy]

The U.S. financial system is on a wild rollercoaster ride right now. After the last drop, it shot back up on the news that our wonderful government would prop up the banks. :rolleyes:

It looks like it may be all downhill from here, though.

Don't worry, though: the U.S. government isn't going to let anything truly drastic happen, even if it means the blatant fleecing of every member of its citizenry. And you know what the sad thing is? We're all just going to sit here and take it, all the while believing that it's in our best interests.
If you been paying attention today, the bourgeois bureaucracy was highely divided suggesting the capitalist class is highely divided.

[Die Neue Zeit]

^^^ I think the division is between the "industrial" (anti-bailout) and the financial (pigs at the trough without any "entrepreneurial" pretensions) bourgeoisie.

[Nothing Human Is Alien]

Stocks tumble as bailout plan fails in House

NEW YORK - Wall Street plunged precipitously Monday, at one point sending the Dow Jones industrials down more than 735 points as investors feared that the failure of the government's financial rescue plan in the House will force the country into a worsening credit and economic crisis.


As the vote was shown on TV, stocks plunged and investors fled to the safety of the credit markets, worrying that the financial system would now keep sinking under the weight of failed mortgage debt.


"Clearly something needs to be done, and the market dropping 400 points in 10 minutes is telling you that," said Chris Johnson president of Johnson Research Group. "This isn't a market for the timid."


While investors had some worries that the vote would be close, many on Wall Street appeared to believe it would ultimately pass. The proposal wasn't been seen on the Street as a panacea for the deepening problems in the financial sector that have led to the failure of Lehman Brothers Holdings Inc. and Washington Mutual Inc. and the forced sale of Merrill Lynch & Co. and Wachovia Corp. — and that still pose a threat to many other banks.


The markets turned highly volatile as it became clear the measure wouldn't find the necessary support. The Dow regained ground then fell back again, trading down 571.55, or 5.13 percent, to 10,571.58. At its low, it was down 735.36, beyond its previous record for an intraday drop, 721.56, set during the first trading day after the Sept. 11, 2001, terror attacks. Still, in percentage terms, the decline remained well below the more than 20 percent drops seen on Black Monday of October 1987 and the Depression.


Broader stock indicators also tumbled. The Standard & Poor's 500 index declined 81.15, or 6.69 percent, to 1,132.12; the decline on the day represented a paper loss of more than $700 billion, S&P said.


The technology-heavy Nasdaq composite index fell 142.52, or 6.53 percent, to 2,040.82.


The Federal Reserve declined to comment on the market's decline.


With Wall Street in turmoil, the yield on the 3-month Treasury bill fell to 0.39 percent from 0.87 percent on Friday. That showed that investors were prepared to get meager returns on an investment as long as it was secure. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.62 percent from 3.84 percent late Thursday.


Investors also faced other worries about the banking system. Wachovia became the latest big bank to be rescued from its overwhelming bad mortgage debt, agreeing to a Federal Deposit Insurance Corp.-brokered buyout of its banking operations by Citigroup Inc.


Marc Pado, U.S. market strategist at Cantor Fitzgerald, said investors are worried about the spread of troubles beyond banks in the U.S. to Europe and other markets.
"Things are dying and breaking apart while they sit there and vote on this thing," he said.


The dollar fell against other major currencies, while gold prices rose.
Light, sweet crude fell $10.52 to settle at $96.36 on the New York Mercantile Exchange as investors feared that a worsening economy would slice into energy demand. If the decline held, it would be oil's largest ever one-day drop.


Marc Pado, U.S. market strategist at Cantor Fitzgerald, said investors are worried about the spread of troubles beyond banks in the U.S. to Europe and other markets.
"Things are dying and breaking apart while they sit there and vote on this thing," he said.


Lawmakers voted down a plan that was different than what the Bush administration had originally proposed. There were restrictions allowing Congress to limit how much of the money goes out the door at once. It also included caps on pay packages of top executives as well as assurances that the government also would ultimately be reimbursed by the companies for any losses. The Treasury would have been permitted to spend $250 billion to buy banks' risky assets, giving them a much-needed necessary cash infusion. There also would be another $100 billion for use at president's discretion and a final $350 billion if Congress signs off on it.


Wall Street found further reason for worry overseas. Three European governments agreed to inject Fortis NV with a $16.4 billion bailout. Fortis, with has headquarters in Brussels, Belgium and Utrecht, Netherlands, is Belgium's largest retail bank.



The British government, meanwhile, said it is nationalizing mortgage lender Bradford & Bingley, which has a $91 billion mortgage and loan portfolio. It was the latest sign that the credit crisis has spread beyond the U.S.



Japan's Nikkei stock average fell 1.26 percent. Britain's FTSE 100 fell 5.30 percent, Germany's DAX index fell 4.23 percent, and France's CAC-40 fell 5.04 percent.



Investors had been looking to the government's proposed plan to jump-start the credit markets.



Fred Dickson, director of retail research for D.A. Davidson & Co., said it's imperative that corporate and institutional investors somehow regain confidence in the markets.
"It's probably fair to say that we are not going to see any significant stability in the credit markets or the stock market until we see some sort of rescue package passed," he said.



Citigroup's acquisition of Wachovia's assets will include five depository institutions and the assumption of debt. The FDIC said Citigroup will absorb up to $42 billion of losses on a $312 billion pool of loans. The FDIC said it would cover any additional losses. The FDIC gets $12 billion in preferred stock and warrants under the deal. Citi fell $1.14, or 5.6 percent, to $19.01.



Meanwhile, consumer spending fell in August to its lowest level in six months. The Commerce Department said spending remained unchanged rather than increasing 0.2 percent as economists had expected. It was the worst showing since February.
Personal incomes rose a better-than-expected 0.5 percent after falling 0.6 percent drop in July. But after-tax incomes fell by 0.9 percent. Incomes benefited in past months from the government's stimulus checks.



The Russell 2000 index of smaller companies fell 42.48, or 6.03 percent, to 662.31.
Wall Street is also worried about overall sluggishness in the world's economy. In the U.S., for example, unemployment now sits at a five-year high of 6.1 percent. That rate is expected to increase, perhaps putting further pressure on consumer spending, which accounts for more than two-thirds of the nation's economic activity.

[R_P_A_S]

Like the saying back in Paris May 1968 "The economy is wounded, I hope it dies!"

who said this in paris?

[Psy]

who said this in paris?
Don't know.

[Dr. Rosenpenis]

when you made this thread there were already three other ones about the same fucking thing

[Mindtoaster]

Dows down 777 points last I checked

[ComradeR]

It seems that the petty squabbling and infighting among the US bourgeoisie will bring about the very collapse of their empire that they are trying to prevent. It's very entertaining to watch.

[RebelDog]

If the Bush administration is consistent in its policies toward those who defy them, they should be preparing a military strike against the Capitol building as we speak.

[Djehuti]

Great.


The SIEU proposes some alternative ways so spend the money...
http://blogs.seiu.org/blogs/2008/09/26/take-a-deep-breath-our-economic-recovery-plan/

[Red Flag Rising]

militant opposition to this bailout

Commrades, THIS is our revolution? The American people opposed the buy-out so they could keep their own incomes. How is this "militant?" The charge was lead by the REPUBLICAN PARTY, i.e. the reactionaries.

Now the broken pieces of these big banks will be absorbed by smaller ones and the economy will gradually pick up steam. The bail-out had components in it that would have siezed a big chunk of the US economy and fucked over the taxpayers.

We just missed a good opportunity see the people lose much of their incomes and get pissed off about it. As it is, the progressives in the Democratic Party come off looking like the bad guys.

[chegitz guevara]

To be honest, RFR, we have to exist in order to have the opportunity. This crisis will not be solved by a bailout. It's going to go on for a while. We can use this crisis as an opportunity to grow the left.

[Red Flag Rising]

You are exactly right, commrade, and that is what the bail-out would have done push the crisis more and give us a better opportunity to take advantage of it. But now, we are left on the outside and the worst elements are making hay of the situation!

[chegitz guevara]

You are exactly right, commrade, and that is what the bail-out would have done push the crisis more and give us a better opportunity to take advantage of it. But now, we are left on the outside and the worst elements are making hay of the situation!

That's unfortunate, but we can only do what we can do. Let's not get upset about what we can't do and work hard on what we can.

[Psy]

You are exactly right, commrade, and that is what the bail-out would have done push the crisis more and give us a better opportunity to take advantage of it. But now, we are left on the outside and the worst elements are making hay of the situation!
The crisis won't be solved either way, the bourgeoisie is stuck with the choice of stagnation (not bailing out the banks) or hyper inflation (bailing out the banks through the printing of more money) and this reason why the bourgeoisie is highely divided about what to do as whatever they do the economy will still be wounded.

[Guerrilla22]

This doesn't mean that a bail out plan still won't be reached. I'm guessing after seeing what happened with the stock market yesterday congress will probaly reach some kind of agreement for a bail out.

[Psy]

This doesn't mean that a bail out plan still won't be reached. I'm guessing after seeing what happened with the stock market yesterday congress will probaly reach some kind of agreement for a bail out.
That would lead to hyper inflation.

[Red Flag Rising]

That would lead to hyper inflation.

Right on! and hyper-inflation = revolution.

[BraneMatter]

In case anyone's interested, here is a breakdown of the vote (http://clerk.house.gov/evs/2008/roll674.xml), by Representative.

[cyu]

As it is, the progressives in the Democratic Party come off looking like the bad guys.

I think they're just showing their true colors.

From http://dealbook.blogs.nytimes.com/2008/09/30/among-bailout-supporters-wall-st-donations-ran-high/

"lawmakers who voted in favor of the bailout bill have received 51 percent more in campaign contributions from sources in the finance, insurance and real estate industries"

[Dr. Rosenpenis]

If you been paying attention today, the bourgeois bureaucracy was highely divided suggesting the capitalist class is highely divided.

The divide in the bureaucracy means nothing.
The divide between non-interventionism and interventionism is the manifestation of the obvious inconsistency in private capital's need to privatize profits and socialize risk. Voters with "libertarian" principles and their representatives are nothing but sheep who follow the meaningless rhetoric that the government mustn't intervene in the market. The market and a strong and interventionist government are mutually reliant. One needs the other and vice versa.

[Psy]

The divide in the bureaucracy means nothing.
The divide between non-interventionism and interventionism is the manifestation of the obvious inconsistency in private capital's need to privatize profits and socialize risk. Voters with "libertarian" principles and their representatives are nothing but sheep who follow the meaningless rhetoric that the government mustn't intervene in the market. The market and a strong and interventionist government are mutually reliant. One needs the other and vice versa.

It is more then just a divide in the politicians if you look harder bourgeois economists are also divided, they state that bail outs would bring hyper inflation and inaction would bring stagnation but they argue witch would be worse for the markets.

[Os Cangaceiros]

Right on! and hyper-inflation = revolution.

Ridiculous.

This bailout won't be some kind of catalyst for revolution. No, if it were to happen, the American taxpayers would not only go along with it, but they'd go along with it feeling that it was in their own best interests. Few people seem to remember that the Depression was actually worse under Roosevelt's tenure than it was under Herbert Hoover's. Yet Roosevelt was venerated like a deity by many. (One visitor to America commented that Roosevelt had a presence in many American working households comparable to the Virgin Mary in Italy.)

[Djehuti]

You are exactly right, commrade, and that is what the bail-out would have done push the crisis more and give us a better opportunity to take advantage of it. But now, we are left on the outside and the worst elements are making hay of the situation!

Revolutions are rarely preceded by a crisis, but a crisis is often preceded by some kind of revolution.

People don't rise up when things are as worse as they can be, but rather when things are as good as they can be (within capitalism).

I don't think that this crisis will create some kind of revolution or even anything close (well, it will meen the definite end to americans hegemony). I am much more interesting in what will come after, when the crisis has dropped. Then we might see an advancement of the working class and revolutionary tendencies. So long, the best we can hope for is more of Keynes and less of Friedman, and thats quite likely really.

[black magick hustla]

Revolutions are rarely preceded by a crisis, but a crisis is often preceded by some kind of revolution.

People don't rise up when things are as worse as they can be, but rather when things are as good as they can be (within capitalism).

I don't think that this crisis will create some kind of revolution or even anything close (well, it will meen the definite end to americans hegemony). I am much more interesting in what will come after, when the crisis has dropped. Then we might see an advancement of the working class and revolutionary tendencies. So long, the best we can hope for is more of Keynes and less of Friedman, and thats quite likely really.

actually, there tends to be more class struggle in times of crisis.

[Djehuti]

Also remember that this crisis (and other crisises like this) are not the actual crisis but rather the solution of the actual crisis.

The thing is that since the 80ies finance capital has grown over three and a half times more than nominal BNP. So there's a lot of what Marx called "fictious capital" in the global economy right now (especially in the US economy), it means that the numbers we see on the stock market etc. lack any correlation to actual value.

"Fictious capital" is not realised capital, it just represents the memory of used capital or the expectations of not yet existing capital. Capitalists simply believed (or just didn't give a shit, only caring about short profits and thus shoved all problems into the future) that nominal BNP would have grown 350% more than it did.

So whats happening with the "crisis" is that all this fictious capital ceases to exist, the stock market falls, people who believed that they owned millions realises that they actually never did etc. Capitalism restores itself to balance.




For the US this crisis is very, very serious. The US economy have not gone well since a long, long time but they have constantly shoved all problems into the future, exported inflation to China etc. Now they stand with enormous debts and huge holes in the economy (for consuming much more than they produce). Also their infrastructure is about to collapse having not seen major reforms since like... well a long time ago. And the US also lack any kind of wellfare and social security etc. And they still have to pay for the war in Iraq. The US should have made the needed investments a long time ago and they might never recover to their former strenght.

One thing that is proven is that states with strong "automatic stabilisers" (such as public unemployment ensurances, tenancy rights etc) don't suffer as much from economic crisises as states without. It is also proven that much privitized states (such as Chile 1982) are much more affected by an economic crisis than states with much public ownership. Neo-liberalism makes society much more vulnerable to this kind of events.

[Psy]

Ridiculous.

This bailout won't be some kind of catalyst for revolution. No, if it were to happen, the American taxpayers would not only go along with it, but they'd go along with it feeling that it was in their own best interests. Few people seem to remember that the Depression was actually worse under Roosevelt's tenure than it was under Herbert Hoover's. Yet Roosevelt was venerated like a deity by many. (One visitor to America commented that Roosevelt had a presence in many American working households comparable to the Virgin Mary in Italy.)

Not even all the bourgeoisie agrees with the bail out is a good idea, they debate if stagnation or hyper inflation is better.

[JimmyJazz]

Don't worry, though: the U.S. government isn't going to let anything truly drastic happen, even if it means the blatant fleecing of every member of its citizenry.

I agree. This isn't 1929. Not even conservatives nowadays have any illusions that a laissez faire system can work through crises on its own.


Ridiculous.

This bailout won't be some kind of catalyst for revolution.

I agree again, what would it be, history's first revolution by consumers? What would the revolution lead to, a 'free association of borrowers'? It's a silly idea.

[Psy]

I agree again, what would it be, history's first revolution by consumers? What would the revolution lead to, a 'free association of borrowers'? It's a silly idea.
The bailout would case hyper inflation like we saw in Argentina and like in Argentina if it gets bad enough there would be massive unrest.

[Guerrilla22]

That would lead to hyper inflation.

Yeah, I know, but it hasn't stopped them, some kind of revised measure is in the works even as we speak.

[JimmyJazz]

The bailout would case hyper inflation like we saw in Argentina and like in Argentina if it gets bad enough there would be massive unrest.

How has that turned out? Is Argentina moving towards socialism? :confused: Sorry, I'm not in favor of "massive unrest".

[Psy]

How has that turned out? Is Argentina moving towards socialism? :confused: Sorry, I'm not in favor of "massive unrest".
It was before the capitalists called a election to distract the workers, as while the workers in Argentina were militant they lacked enough class consciousness. Just because there is a revolutionary situation doesn't mean a revolution but at least revolution is then possible.

[Psy]

Yeah, I know, but it hasn't stopped them, some kind of revised measure is in the works even as we speak.
It doesn't matter what they do, the capitalist is caught between a rock and a hard place were whatever they do will have serious side effects.