Monday, September 29, 2008
A Stock drop of over one point, for every billion dollars requested (and refused)
777.68 in the decline, that was the precipitous drop of the Dow Jones index by the end of trading on Monday afternoon. Not to be left out of the fun, the TSE index itself retreated some 840.93 points, the largest drop in eight years, letting Toronto share Wall Street's Monday Meltdown horrors with Bay Street and beyond.
The decline was spurred on by the failure of Congress to pass that 700 billion dollar bail out request from President George Bush. A political tsunami that washed over from Washington and through Wall Street, leaving the American political scene mired in acrimonious finger pointing once again, a lame duck President seemingly with no political capital left with his own party and a financial market teetering it seems on the cusp of complete panic.
As the vote progressed in the House it became quickly clear that the Republicans were not going to deliver the required number of votes to inject that 700 billion dollars of monetary relief to the struggling American fiancial system.
With each vote moving to the Nay side of the House, the immediate effect was another tumble in the stock market, leaving the commentators to marvel in a form of horror as the stock market appeared to be heading into meltdown territory.
As the final hour of trading got underway heading for that final figure of a downward slide of 777.67 points on the day, the realization became clear of the political chasm that exists between Democrats and Republicans, and more importantly between Republicans and their own President which seems to have grown wider and wider with each passing day since last weeks address to the Nation.
Republicans seem to forget that it was their President who brought forward this package, using a prime time television address last week to advise that dire consequences were ahead if it did not pass. It was their nominee for the Presidency this year, who suspended his campaign with much drama last week, all in a bid to get the job done. And yet, here we are, the bill was rejected and the financial markets sit upon a precipice.
The Republicans seemed to suggest that an intervention today by Speaker Nancy Pelosi, caused the Republican revolt, a most disturbing thought that some words perceived as too partisan, would be enough to take down the nation's economic standing.
Perhaps the recalcitrant Republicans should borrow a page from their nominee for President and "put country first."
Of course some commentators are of the opinion that is exactly what they did today, Lou Dobbs on CNN in particular putting forward the theory that the denial of the bail out was a triumph for the nation and to a degree a return to basic capitalism.
All eyes now turn towards the Asian Markets and then Europe which will react to Monday’s meltdown on Wall Street. Even before the drama on Wall Street on Monday, European governments had been busy with guarantees and bail outs of financial institutions of their own,
Once a rock this large starts rolling down a mountain, it’s hard to stop. For the US economy and the world economy the rock picked up some speed today and could very well crush everything and everyone that gets in its way.
When historians look back on September 29, 2008 one wonders if they will remember a day where politics unravelled an economic system, leaving a nation changed for a generation, or if the events of today were but yet another hiccup in what seems to be a long running and apparently unsolveable crisis of confidence in both financial and political institutions.
New York Times-- Trying to Avoid Economic Calamity, Lawmakers Grope for Resolution
New York Times-- What’s Worse Than a Flawed Bailout?
New York Times-- The 3 A.M. Call
New York Times-- OK, we are a banana republic
New York Times-- Shades of Newt Gingrich: Don’t Snub Those Republicans … Or the Nation WILL Suffer
New York Times-- Authorities Aid Banks in Europe
New York Sun-- Markets Tumble as Bailout Fails
Wall Street Journal-- Bailout Plan Rejected, Markets Plunge, Forcing New Scramble to Solve Crisis
Wall Street Journal-- 'No' Votes Came From All Directions
Wall Street Journal-- Dysfunction in Washington Exacts a Heavy Price
Wall Street Journal-- The Depression of 2008? Don't Count on It
Wall Street Journal-- How Voter Fury Stopped Bailout
MSNBC-- Bailout failure throws banks into disarray
MSNBC-- Bailout vote stuns Washington, markets
MSNBC-- Stocks plunge after bailout bill fails in House
MSNBC-- Asian markets fall sharply at opening
CNN-- Bailout plan rejected - supporters scramble
CNN-- Lawmakers quickly point fingers after bailout fails
CNN-- Stocks crushed
CNN-- Without a Bailout Plan, What Will the Cost Be?
Fox News-- House of Representatives Rejects $700B Bank Rescue Package
Fox News-- Bleeding Red: Dow Dives 778 on Rescue Vote
Fox News-- Why It Was Tough to Vote for the $700B Rescue Plan
CNBC-- What Went Wrong -- Forces Lined Up Against Bailout
CNBC-- Congress Should Stop Pointing Fingers and Do Something
CNBC-- Congress Vows New Effort To Approve Bailout Plan
CNBC-- Dow to Slump Below 10,000 on Rich Man's Panic
Globe and Mail-- Bailout woes signal rocky path for McCain, Obama
Globe and Mail-- Black Monday revisited
Globe and Mail-- Oil slides $10 a barrel
Globe and Mail-- Bailout fails. What's next?
National Post-- Fear sweeps markets as U.S. bailout fails
National Post-- Partisan bickering kills bailout deal
National Post-- Washington puts the world on the ledge
National Post-- Financial markets go up and down as they should
National Post-- Hunker down: It's going to get uglier
National Post-- Cash is king: Folk
National Post-- Harper says ready to "help" in financial crisis
National Post-- Europe may be living in denial
National Post-- Gut check time