House Votes Down $700bn Bailout
The US House of Representatives has voted by 228 to 205 down the $700bn bailout agreed over the weekend. Two-thirds of Republicans and 95 Democrats rejected the deal.
A massive drop in the Dow Jones ensued with a 778 point decline. After the close the percentage was 7.7%. The S&P 500 suffered its biggest percentage drop since Black Monday in 1987.
The FTSE dropped 270 points or 5.3%.
Other Market Moves
Three governments, the Dutch, Belgian and Luxembourg pumped €11bn into Fortis bank. Fortis for its part will have to sell its stake in the ABN Ambro bank.
French bank Dexis has become the latest target of speculators. Dexia handles a lot of the finance for local government. The French government made the now obligatory statement tha the bank would not be allowed to fail.
Wachovia, another bank under attack has been swallowed by Citigroup in a government backed deal..
The UK government is nationalising the Bradford and Bingley bank. Spanish banking giant Santander is to take the savings business and branch network.
Showing posts with label Congress. Show all posts
Showing posts with label Congress. Show all posts
Monday, 29 September 2008
Sunday, 28 September 2008
$700bn Bailout Deal Hammered Out
A bill is likely to be bought to the House floor on Monday on the proposed $700bn bailout of the financial markets by the US Federal Reserve. Congressional leaders and the Bush administration have reached a tentative agreement.
Staff members from Congress are working through the night to finalize the details and language of the bill. Headline items that have become attached are executive pay limits for executives whose firms seek aid and help to prevent home foreclosures by the government as owner of the distressed mortgage-backed securities.
Firms may have to surrender an equity stake to the government, so the taxpayer can profit if it actually works in the years ahead.
A Congressional panel is to have strict oversight of the deal. Firms hired by the US Treasury are to abide by conflict of interest rules. The White House conceded these restrictions on its requested unfettered authority to run the bailout programme. Democrats for their part removed a demand for judges to be allowed to amend first mortgages. A fee on securities transactions, essentially a tax, to pay for the rescue was also dropped.
“All of this was done in a way to insulate Main Street and everyday Americans from the crisis on Wall Street,” Nancy. Pelosi said at the news conference. “We have to commit it to paper so we can formally agree, but I want to congratulate all of the negotiators for the great work they have done.”
In a statement, Tony Fratto, the deputy White House press secretary, said: “We’re pleased with the progress tonight and appreciate the bipartisan effort to stabilize our financial markets and protect our economy.”
Staff members from Congress are working through the night to finalize the details and language of the bill. Headline items that have become attached are executive pay limits for executives whose firms seek aid and help to prevent home foreclosures by the government as owner of the distressed mortgage-backed securities.
Firms may have to surrender an equity stake to the government, so the taxpayer can profit if it actually works in the years ahead.
A Congressional panel is to have strict oversight of the deal. Firms hired by the US Treasury are to abide by conflict of interest rules. The White House conceded these restrictions on its requested unfettered authority to run the bailout programme. Democrats for their part removed a demand for judges to be allowed to amend first mortgages. A fee on securities transactions, essentially a tax, to pay for the rescue was also dropped.
“All of this was done in a way to insulate Main Street and everyday Americans from the crisis on Wall Street,” Nancy. Pelosi said at the news conference. “We have to commit it to paper so we can formally agree, but I want to congratulate all of the negotiators for the great work they have done.”
In a statement, Tony Fratto, the deputy White House press secretary, said: “We’re pleased with the progress tonight and appreciate the bipartisan effort to stabilize our financial markets and protect our economy.”
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