Pitch Is Out, I Can’t Hold Altitude!   Leave a comment

Via NPR this morning, on the way into work… the $700 billion dollar bailout package is now the flameout package.  Surprise, even the Wall Street Journal called this one wrong.  The market is eating its own brain.

Declining stocks trounced advancing ones on the NYSE by about 30 to 1. On the Nasdaq, decliners beat advancers by more than 6 to 1.

I confess to being astonished; it’s just amazing to me that Congress didn’t pass this bill.  Not because I agree with the bill (or disagree, for that matter, there are plenty of arguments for both sides)… I just didn’t think it was possible that Congress *would* vote it down.  You pass the bill, and it doesn’t work, you can point your finger at everyone else, including both candidates for President.  You don’t pass the bill and markets crash, you’re going to be paying the piper when retirees’ 401k accounts lose 20% or more of their value in a week.  Retirees vote.  If you’re looking to cash out some of your retirement funds, you’re already plenty angry that the net value of your portfolio has dropped to 75% of what it was a year ago.  Losing another 10-15% is going to spur outright rage.  Not to mention what these guys think.  Apparently the thought process among the House Reps actually is completely backwards to the way I’m thinking – reps in competitive races were much more likely to vote against the package than for it.

I guess they’re going with the, “It’s not my fault, I didn’t do it!” line?  Somehow I don’t think that’s going to sell well with the constituency, but we’ll see.

I think I might actually have to applaud “free market” lawmakers for putting their money (and not taxpayers’ money) where their mouth is -> “let the market correct itself!” is IMO a goofy way to manage a complex economy, but damned if we’re not going to find out right now how well that works out.  I imagine there’s more than one “conservative” investment banker who is suddenly realizing that “leaving the market alone” applies in good times and bad, and that the party who has been tagged as “pro-business” maybe isn’t as “pro-business” as that investment banker thought.  I expect a number of those not-really conservatives to vote for blue come November, just because they’re angry that they’re getting exactly what they’ve asked for.

Of course, this just could be a fake fight, like the Democratic fight against FISA.  If the market drops to 9,000 before tomorrow’s close, a bunch of those holdouts might cave before the week is out, especially if those aforementioned retirees bombard them with phone calls.

Shaping up to be an interesting week, no matter how you slice it.

[edited to add: photo humor]

Posted September 29, 2008 by padraic2112 in news, politics

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