House Rejects Bailout Vote


95 Democrats and 133 Republicans voted against the bill. Republicans blamed Pelosi’s speech for making the vote partisan. However that doesn’t explain how the Speaker failed to sway nearly a hundred – or 40% – of her own party. Bet there’s a whirring sound coming out of Tip O’Neill’s grave.

Leadership LOL

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One Comment

  1. Greg Burnham:

    29 SEPT 2008 – 11:31am – Greg Burnham
    It’s the economy, stupid…

    Ok, so the Dow Jones Industrial Average is off by about 770 points so far today on the news that the House rejected the $700 billion bail out. Why is the media acting shocked at the drop? Perhaps they are driving ratings instead of reporting dispassionately again. A pity.

    By using a single company’s stock as a microcosm of the Dow Jones Industrial Average we can more readily grasp today’s fiasco. There are times when a company’s predicted “direction of performance” is accurately reported prior to the official numbers being released. By the time the official numbers are released the market has already priced the stock with that expectation incorporated into the calculations by which price is set. However, even if the official numbers show the prediction of a favorable “direction of performance” through increased earnings was correct, if the increase is less than what was expected, the stock price will correct down to a level consistent with the unexpected information. Alternately, sometimes the unexpected can actually have a positive effect on the market. For instance, premature reports of very low earnings for ABC Corp may affect its price prior to its official numbers being
    released. However, once the official numbers are released, even though the earnings are down the stock could rally if the decline is less than what was expected.

    Truth be told, markets react most dramatically, up or down, to the unexpected. Surprise causes market fluctuation and sustained flux causes volatility. Today’s sell off is an indication of just how much effect speculation is still having on the market. Speculation that the House would pass the bill caused traders to align their strategy accordingly. When it didn’t pass, traders re-adjusted their strategy in an attempt to cut their losses. But where did Wall Street get the idea that the bill was a sure thing to pass today in the first place? Lawmakers, media pundits, the White House, and perhaps others with something to gain from the turmoil caused by uncertainty fed the expectation. It was akin to a massive insider trading tip that was transparently leaked to the general public. Because markets are generally efficient, the expected outcome was prematurely incorporated into the market and prices adjusted accordingly.

    Profiting from insider information trading is illegal. But imagine what might happen if the “apparent insider information” that became public knowledge was DIS-information and was presented in such a way that not only Main Street, but even Wall Street found it nearly impossible to conceive of any other alternative? Welcome to “How to Further Centralize the Banking System 101” for dummies.

    So where does that leave us? Americans aren’t stupid; markets aren’t human; and the media has an agenda. Well, that’s just grand! But after all the smoke clears remember that those who govern through the use of periodic “shock therapy” are enemies of liberty.

    9/11 resulted in trauma based blind acceptance of many otherwise unconstitutional policies. Hank Paulson will perhaps become the Tom Ridge of finance. Right now he has about as much credibility as Colin Powell did before he resigned. The only difference between the two?—We know Powell is a man of integrity who was misled. Unfortunately, despite his best intentions, we still ended up in Iraq.

    Be vigilant. The underlying agenda is all important.

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