Fool Poll: Do You Agree With the House's Vote?

The people down on this bill will be the first ones to complain about their stock accounts and 401ks being down, and then be griping about the long unemployment lines if the bill doesn't pass. This bill may not be perfect, but we all need it. Quit screwing around and pass the $#%&** thing!

As far as investing is concerned, those who are long on stocks are screwed either way. The market shot downward on prospects of the bailout. It then shot downward even faster when the measure failed. It just doesn't matter. Stocks are heading nowhere but down and are not a good place to be and won't be for some time to come. I've been selling and now regret not selling everything a year ago. I'm certain that my retirement date has just been extended another 2 years, if not longer.

We have to stop buying things we can't afford. Maybe the "bitter pill" we need isn't this bailout plan but the inevitable financial reboot.

After going through hurricane Katrina 3 years ago, and going without jack for a few days, you find out real quick what you really must need in life. Priorities change significantly. Do you really need that X Box 360? What about the 50 inch High Def TV? Food/water/clothes were pretty good. We survived.

This bailout has thankfully been defeated. Americans are a resilient group, and I think that the level of anger from the public was grossly underestimated by politicians/Wall street.

THANK GOD!!!! Thank God this nightmare of a bill didn't go through. We need to prevent COMMUNISM in this country. Let the natural order of CAPITALISM take place.

I'm pretty shocked the bill failed. The politicians are so afraid of upsetting someone that they have chosen the easy way out - do nothing. In the meantime, things are not going to fix themselves. I don't have a lot of investments, but I'm sitting on them. Panic is only going to make things worse. The "doom & gloom" mentality of the media and panic selling has certainly added more water to this sinking ship, but I'm still foolish enough to believe that people in general are going to get themselves together and realize something needs to be done - even if it's not perfect. But, this is one time where the so-called politicians need to stop being political and step up as LEADERS!

I'm tired of socialism. Let the guilty parties pay for their mistakes. We need to get the gov't OUT OF the economy, not increase its involvement.

Until they add a clause to this bill to draw and quarter the executives and political officials responsible for this, I'm opposed to this bill 100%. I'm sick and tired of paying for other peoples' irresponsibility and bad decisions.

Let the market reset. We can't rewards these speculators or they'll just start working again on new creative ways to fleece us after this mess clears up, and we'll have another mess to clean up in 15 more years.

Here is the House voting record for the "bailout" resolution. I suggest the rest of the 90% of us opposed to this measure call our Representatives who voted "Aye" and inform them of our votes for their opponents in the coming election. Maybe they'll change their tune when this inevitably comes up for a vote again this week:

http://clerk.house.gov/evs/2008/roll674.xml

To pass any bill that has balooned from 12 pages to 108 over a weekend without public review is the potential for a disaster. Aside from the fact that there needs to be action, there MUST be checks and balances put into place to ensure that:

1) This can't happen again. The root cause was making home loans to people who were not capable of paying those loans back. At a minimum, getting a loan should be as difficult as it was 20 years ago.

2) The US Taxpayer will recover their investment. If the taxpayers are investing up to 700 Billion, they deserve the appropriate return on those monies. Any amount given must be a LOAN that is paid back with an acceptable rate of return.

3) There must be accountability for the mistakes. No golden parachutes. Many indictments. No bank or individual gets rich off the US Taxpayers money.

To guarantee that those things happen, it's going to take more than just a weekend to write the code and verify that it has those protections.

The Big Diehl, some of us actually have integrity and that means going with what we think is right even if it means less money for us or a later retirement date.

So yes my mutual fund (25% S&P500, 50% non USA stocks 25% bonds) is down 10% YTD and I expect it go down a good chunk more if the bailout does not pass.

Are the people pro the bailout because it is the right thing in their minds, or because it means they will get their 401k's saved at the possible expense of everyone else?

Anyway, if nothing else this short term victory for the no bailout crew will send the message that it is not so easy to just up and spend 700Billion because there "Might be and end of the financial world"

My whole family (hubby, sister and her husband) are against the bailout plan. I am sorry that big banks and such made so many stupid errors that they are failing. I understand that the mortgage subprime mess began with Clinton and extended through the Bush administration.

Anyway, perhaps it is time for the demise of those companies that are failures. Something does need to be done to those that took multiples of millions with them as they fled the leadership position but let the chips fall where they may.

Government bailouts just cannot continue. If they don't, it will never end.

This plan was crafted too hastily. Your article said, "Regardless of who's to blame or who should be held accountable, these are extremely serious times not just for Wall Street, but our entire economy. The debate over how and why this happened can go on for days, but it's important to realize the proposed bailout is designed to help the financial system, not Wall Street fat cats hoping to cash in off of your hard-earned tax dollars." Accountability is the issue - not so we can see people do the perp walk - but so we can put measures in place to prevent such an event from happening again. Congress has never done anything this fast. That's reason enough not to trust it.

I don't know even a tenth of the details, but here's what I do know:

1) Too much power is in the hands of the Treasury Secretary. The bill gives him the authority to do whatever he believes is necessary to stabilize the economy Who will oversee him?

2) Where is the money coming from? From here on Main Street it looks like the only thing that can be predicted with 100% certainty is runaway inflation resulting from such a voluminous increase in the money supply.

3) The people that caused the problem - or at least looked the other way while it happened - are in charge. Who else could benefit but the fat cats, including those in Washington? Well, except maybe stupid borrowers (see next point).

4) The whole thing is immoral. There I said it. Somebody had to. Bankers got greedy and got rewarded (Franklin Raines). Washington weasels on the House and Senate Finance committees had their hands in the cookie jar (Barney Frank, Chris Dodd, Barack Obama). Borrowers bought houses they couldn't afford and they would have gotten a free pass via mortgage renegotiation. And it would all have come from the pockets of those who pay their mortgages and their other bills on time. Call me simple-minded if you will, but that sounds like stealing to me, and stealing is wrong.

5) Barney Frank said the assets the people would be buying are riskless. If they're riskless then there must be no crisis and noone is really losing money. I already make enough stupid investment decisions, I don't want the government doing it on my behalf.

6) Money was earmarked in this bill for unions and various other special interests that are non-germaine to the crisis.

7) This is where I disagree with the Fool's position the most. I don't wan't the government having an equity stake in anything. That's Marxism pure and simple.

My hope is that while Congress tries to look like it's doing something the market will work it all out. Banks are being bought by other banks and risk remains where it belongs - in the hands of the owners of the businesses. Had this bill passed it would have been the death of accountability, American capitalism and the Constitution.

What I would like to see is some kind of plan that guides the financial sector to cover these substantial losses out of future profits from what good business they might still have. Bad mortgages need to be rewritten with substantial time extensions (mortgages in Japan cover 3 generations now) that allow the homeowners to cover payments and the mortgage holders to eventually make a profit. The burden on both the maker and the borrower for such a long time will serve as a stern reminder for us all of the value of living within our means. Allowing everyone to walk away with a swat on the backside is just encouragement to see what else might be gotten away with. Business loans to assure solvency AFTER troubled companies show some resolve and take steps to correct the fundamental errors in these parts of their business models is more prudent and potentially profitable for all involved. Hard work and commitment to making an honest buck is the only thing that will solve this problem.

For better or for worse, we live in a free market society. When the government removes the penalties associated with risky behavior, that behavior becomes rampant. The government then feels compelled to step in and regulate or legislate away the new risky behavior. This principle has been repeatedly demonstrated in various social programs over the years and now in the financial sector. The guilty (and many innocent) will pay for the mistakes made by these financial institutions, but look at the few banks who are in a great position now. BofA, Wells Fargo, Citigroup, Chase, etc. were all accused of being stogy because they wouldn't play in this high-flying money-making arena. Now they are all taking this opportunity to grab some huge values.

Furthermore, this bailout punishes smart investors and smart taxpayers who didn't play in this game, it punishes people who bought homes within their means, it punishes those who have waited to buy a home because they couldn't afford to pay as much as the market was asking. It also punishes anyone who spends a dime in the US as inflation is bound to skyrocket.

Let the markets correct themselves. We'll pay a hefty penalty now, but huge government intervention brings the far larger and longer cost of a socialized financial system.

http://www.reason.com/news/show/129107.html

Here during 2004 hearings on Freddie Mac and Fannie Mae are Democrats Barney Frank, Maxine Waters, Gregory Meeks, Lacy Clay and Artur Davis excoriating regulators for suggesting there was a problem at Fannie and Freddie, Republicans Richard Baker, Ed Royce, Don Manzullo and Chris Shays calling for more vigorous oversight of Fannie and Freddie, and former Fannie Mae CEO, member of the Clinton administrator and Obama adviser Franklin Raines describing the mortgages they were buying as “riskless” and suggesting capital required to support them should be under 2%.

http://www.youtube.com/watch?v=_MGT_cSi7Rs&eurl=http://5...

i hate the plan but it seems to be a necessary evil the reason for it not passing seems more to be about the upcoming election than it does about the actual plan. if the politicians are so concerned about the public they need to show it by putting an effective plan into place now before the econmic situation gets worse.we have to look past it being a bailout of the "fat cats" of wall street and more on the ramifications of whats going to happen to america if we do nothing. the eyes of the world is on us and if we fail we become vulnerable that is not a place we want to be in.

Here Here...Congress got it right today!

I'm a small business owner and sick and tired of paying into our goverments madness!. My IRA dropped like everyone elses. So be it as this economy is sick and this is what needs to happen. The fear that my business (grocery store) would not be able to borrow money to stay in business is BS! Tell you what folks, if I have to borrow to pay my employees and stay in business I am no better off than the bastard banks that did that very thing. The good banks will survive and the healty will loan money to good healthy businesses. This is the free market system at work.

Wow, I am shocked at the lack of understanding of how our financial system works in this country by people that frequent the Fool website. This website and EVERY respectable economics publication out there explains in excruciating detail the point of this rescue package. "Free" market behavior is what got us into this mess in the first place, so to now advocate that it will get us out is ignoring history. Wikipedia the "great depression" and maybe you will understand what is at stake. This is like the climate change issue, can we afford to be wrong? I say no. Is the bill perfect, no, but it is a good compromise between bailout and taxpayer protection in the form of equity stakes. However, for those that are against it, I recommend you spend more time reading, and less time ranting, to understand exactly what you are wishing upon us.

Full disclosure: I am not nor ever have been in the financial business nor did I benefit financially from any of the last two "bubbles".

Future: All medicine and no sugar for quite some time. No two ways around it.

Pelosi's words,

"It's a staggering figure.... $700 billion, a staggering number, but only a part of the cost of the failed Bush economic policies to our country,'' Pelosi said, blaming Bush for inheriting a budget surplus and turning it into a record deficit with " reckless economic policies.... "It's really an anything goes mentality, no regulation, no supervision, no discipline."

1. 2001-April, the Bush administration, in its 2002 budget proposal, asserted that the size of Fannie Mae and Freddie Mac is a "potential problem," and that financial trouble in these "Government Sponsored Entities," or GSEs, could "cause strong repercussions in financial markets."

2. 2003, autumn, the Bush administration pushed Congress to create a new federal agency to regulate and supervise Fannie Mae and Freddie Mac.

On 2003-Sep-10, then-Treasury Secretary John Snow, before the House Financial Services Committee, " We need a strong, world-class regulatory agency to oversee the prudential operations of the GSEs, and the safety, and the soundness of their financial activities."

On the same day, 2003-Sep-10, at the same hearing, the ranking Democrat on the House Financial Services Committee Congressman Barney Frank (now chairman of the same committee) said in response, "Fannie Mae and Freddie Mac are not in a crisis. The more people, in my judgement, exaggerate a threat of safety and soundness, the more people conjur up the possibility of serious financial losses, to the Treasury, which I do not see, I think we see entities which are fundamentally sound financially and withstand some of the disaster scenarios, and even if there were a problem the federal government doesn't bail them out. But the more pressure there is there, the less I think we see in terms of affordable housing."

The legislation the Bush administration put forward that day was blocked.

3. Alan Greenspan, 2005-Sep-17, to the House Financial Services Committee, on Fannie/Freddie, "Enabling these institutions to increase in size--they they will once the crisis in their judgement passess--we are placing the total financial system of the future at substantial risk."

4. Alan Greenspan, 2006-Apr-6, "If we fail to strengthen GSE regulation we increase the possibility of insolvency and crisis."

The same day, Democratic Senator Chuck Schummer, "I think Fannie Mae and Freddie Mac over the years has done a good job and are an intrinsic part of making America the best-housed people in the world. If you look over the last 20 or whatever years, they have done a very, very, good job."

5. Senate floor, 2006-May-25, John McCain, "For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac... and the sheer magnitude of these companies and the role they play in the housing market... the GSEs need to be reformed without delay." In the Senate Banking Committee, the Fannie/Freddie reform legislation that McCain cosponsored, 100% of the Republicans voted FOR it, and 100% of the Democrats, including Chuck Schummer and Chris Dodd, voted AGAINST it. As we know now, Dodd received $133,900 in campaign contributions from Fannie/Freddie ( per opensecrets.org ), ranking #1 in Congress. Obama received $105,949 from Fannie / Freddie ( per opensecrets.org ), ranking #3 in Congress. Senator Obama was silent on this legislation.

6. 2008-Sep-25, former President Clinton indicated he AGREED with Fox News assertions that Democrats are responsible for failure to rein in Fannie/Freddie--Bill Clinton told ABC's Chris Cuomo that for years, Democrats have been "resisting any efforts by Republicans in the Congress or by me when I was President to put some standards and tighten up a little on Fannie Mae and Freddie Mac."

The dow should be at 8800-9000 this year. The market is just correcting itself. Don't panic. (avg increase of 6% for the last 40yrs). The bubbles are collapsing, the economy is not ending. There are plenty of good jobs out there (go to Career Builder.com). Housing prices are where they should be. Yes, a lot of investors lost there money, and banks aren't getting there loans paid back. There will be new banks and lenders in the years to come.

alot of people to think that the market will work itself out i am not so sure. if you ever read anything by adam smith he warned against extensive deregulation this was a storm waiting to happen. governments need to be more involved not less thats the problem now not enough monitoring and restrictions in place. free market should rule with regulations and a safety net in place. it's not about socialism (education could be considered socialism) but whats best for the general public. if my stock fails ok i knew the risk but if it fails because of some whacked out bs loans that shouldn't be legal than i have a problem. my portfolio is bleeding and i want the leaders who are suppose to be LEADERS to get off their ass and do their job whether they are reelected or not is not important as doing the job they were elected to do NOW!

That Bill was a joke, wheres Milton Friedman when you need him :(

is it me, or has the Fool community taken crazy pills.

what part of Government Sponsored Enterprise (GSE) reminds you of a "free market capitalist" economy? That's what Freddie Mac and Fannie Mae are: Government Sponsored Enterprises.

Let me say that one more time for the Socialists: GOVERNMENT SPONSORED ENTERPRISE

Next for all, Socialists and Capitalists alike, please visit the Ludwig Von Mises Institute for intelligent analysis of our economy.

Ludwig Von Mises is famous for his 1923 paper Economic Calculation in the Socialist Commonwealth, in which he theorized that the pricing mechanism which made free market capitalism rational (again, something America has come close to, but has never had), made socialism irrational. In fact, since socialism lacked a pricing mechanism to distribute goods and services, it was indeed a giant price fixing scheme.

Now, reflect on that last statement while you consider the role of Freddie and Fannie in our economy again, and as you consider the government's plan to buy worthless assets above market price.

It's too bad that the editors of Fool have lost their way. It appears they have sipped the Manifesto, and the wrong one at that. Maybe had they taken the time to read The Revolution: A Manifesto by Ron Paul, they might have been introduced to a cogent economic policy.

Sound money.

Balanced budgets.

End the Federal Reserve.

Return to the Gold Standard.

And for pete's sake, enough government involvement in our economy.

Cheers,

David

Has anyone seen those commercials now where you can get an equity loan using your car?

Are we making the same mistake again there.

I know it's sort of off topic but I'm just curious to see what people think of that.

To me this is a question of trust, namely, how can we trust this administration to get it right? Can we believe the Bush/Cheny Chicken Little act? Can we put our faith in Paulson, the Goldman-Sachs hot shot that helped get us into this mess? They are all owned lock, stock, and barrel by big oil and the rest of the super rich. The current plan does not have enough controls in it, and yet is too much for many in the House to accept. I'm on the cusp of retirement, with LOTS to lose, but I'd rather take a really serious hit and work a few more years than give in to yet another "Trust me" deal with these guys.

....."Unbelievable. Wall Street and its backers created this mess and now they are going to clean up like bandits."... ..... No, we, as a PEOPLE, created this mess. It was our own greed and excesses. We did nothing to stop the madness. We did nothing to demand that fraudulent legislation be repealed. We did nothing about making our lawmakers and representatives accountable to US. Now, Wall Street, the Lenders and the Politicians took advantage of this, but ultimately, it is our own spending/savings habits and appathy that caused this. No one held a gun to any one else's head and said "Buy more house than you can afford" or "Go ahead, run up that credit card, we'll get you another one!" No one told us we had to speculate in the stock market. No one kept us from organizing and voting out corrupt Politicians. We did this to ourselves. The Problem is that those of US that are responsible refuse to look in the mirror and admit who is ultimately at fault. It's much easier to cast blame far and wide. Unfortunately, those of US that have been fiscally responsible are the one's that are getting the short end of the stick. As usual, we will have to wipe the backsides of the wealthy, the politicians, the welfare bums, and the illegals to make our country somewhat whole again. But that is always the case. Remember, no good deed goes unpunished. I am reminded of the famous Pogo cartoon..... . "We have met the enemy.....and he is us!" Respectfully, Michael

There are two elements in the current crisis: securitization of collateralized loans, including mortgages, and the collapse of the housing market. The companies and individuals who tried to exploit CDOs and related instruments, and think Fannie, Freddie and Lehman Brothers as examples here as well as people who got loans they knew they couldn't afford all are contributing factors but not the main line issues. The problem with securitized debt itself is that it was never openly traded and much of our current issues, particularly pricing of these instruments would never have happened if there were market makers and freely traded markets for them. This was not an evil plot however. The holders of these securities planned on keeping them to maturity. Most people would be surprised at who holds these instruments - virtually across the board in financial institutions, including mutual and retirement funds. The notion that this is only a Wall Street issue is very misguided.

The other component is the housing crises. Part of it is indeed defaults but most of it is directly caused by the drop in sales prices and the corresponding loss of collateral securing the mortgages. Dropping of collateral drops the face value of the securities and in turn the ability of the institutions holding them to lend, including new mortgages. This in turn drives housing prices lower in a vicious circle. Some of the questionable participants and I see Fannie and Freddie as likely in that camp accelerated the housing bubble and contributed to it but the issue is that the fall of prices is not stopping not that it got too high.

Lending institutions cannot lend against this collateral because they can't price it. Mostly at risk now, is not Wall Street but the Regional Banks. Whachovia was our largest regional until it failed today. Washington Mutual was our largest thrift. Most of the others are at risk and you are seeing the same stock price death spiral as with Wachovia.

There are reckless institutions like Lehman Brothers and potential malfeasance on the part of others. Federal Prosecuters have supoened Freddie and Fannie to investigate potentially criminal activity. They spent hundreds of millions on lobbying Congress over the years and frankly, one should not be overly supprised to see some of our Congressmen in orange jumpsuits before this is over. Large amounts of money to curry political favor can easily cross the line. All of this is interesting but side shows not the main event.

What has happened is that our Financial System has frozen up Coast to Coast. The country cannot progress without lending and the failure of lending is what got us into the Great Depression. The populist cry for the heads of financial institutions and outrage in "bailing out Wall Street" do not perceive that it themselves that are in peril and need rescue.

The intent of TARP was to separate the housing related issues from the rest of the economy to get Main Street going again. Replace the collateralized securities with Treasuries and banks can honor lines of credit to businesses large and small.

This all could become very, very bad for all of us. People who see this accurately and unemotionally need to start speaking up. Too many in Congress are pandering to a confused mob rather than exercising calm judgement. We need to inject some reason into this. If we have to wait for the first quarter to resolve this, I fear many millions of us will be on the street and out of work.

Ken

Michael,

It's important for Americans to take responsibility for not holding their legislators accountable.

We must also, however, hold the Federal Reserve accountable for placing excess credit in the hands of the banking industry.

As any economist (that hasn't sold out to big gov) will tell you, excess credit causes malinvestment.

Take a moment to Google: "Money, Banking and the Federal Reserve" video,

The video is 45 minutes long, presented by the aforementioned Ludwig Von Mises Institute, and it clearly explains how our way of life is threatened by this unrestrained monster.

Sound money.

Balanced budgets.

End the Federal Reserve

Return to the Gold Standard.

Ron Paul 2012

Cheers,

David

www.mises.org

What irks me is that Paulson did not have any alternate plan, so the Fool can say this wasn't a bailout of Wall Street fat cats but lack of a Plan B belies that statement. What other potentially invigorating things for the economy can we do with that kind of money...sever our dependence on foreign oil by developing new technologies, improve our education system, provide healthcare for everyone? All those things could do wonders for spending power of average Americans...not just Paulson/Bernanke's golfing buddies. That is an astronomical sum of money, it shouldn't just go into a pit dug by irresponsible home owners and shady lenders.

Ken,

That was an excellent analysis of the problem, but you failed to touch on the policy that created the housing price bubble that needed to be adjusted in the first place.

While empty suits and skirts in media and Washington scramble to tell us what we already know, it was only the Austrian School economists who consistently predicted this crisis would come.

And they have a fine track record of understanding these problems dating back one hundred years.

While Ron Paul, an Austrian School economist, was running for President he was LAUGHED AT for predicting this very mess.

Now you ask me to listen to the people who mocked him? Rather than listening to those who saw this coming: Ron Paul, Peter Schiff, Lew Rockwell, Jeffrey Tucker, Thomas Woods, and others?

The Austrian economists continue to advise a policy of restraint.

Sound money.

Balanced budgets.

End the Federal Reserve.

Return to the Gold Standard.

Or, bail everybody out and prolong the agony.

Cheers,

David

I have read the proposal on Washington Watch. While we do need a plan to solve this problem, the proposal by the Democrats is not it. We must not include payment of interest to these failed institutions. WE must eliminate interest rates that vary depending on which part of your credit card is accessed. We must include usury clauses to prevent recover at the expense of those who need some but not much credit. Credit card accounts must be redefined as revolving charge accounts and the maximum penalty for being late on only one payment, even if this is on successive months, must be limited to the interest earned on the outstanding balance. An account that is two months late should be suspended until brought current and possibly have the limit reduced.

This is a required change in our credit laws. Failure to prevent a repeat by not including needed reforms is not acceptable.

Changes in interest rate not related to the borrower's actions must be prohibited.

Why is it so hard to understand we( the tax payers) are all ready on the hook? The mess, loss of jobs, our markets will be staggering compaired to what if any the bail out would have cost. Get the politics and hate of Wall Street out of this and use some common sense. I am now very afraid for our future. RJ

It's too late to blame the evil greed mongers. We must do something soon and I dispair that it will happen.

When I read the comments above I see a lot of cynicism and mistrust. It may be warranted. I also see a lot of proposed ideas that may or may not be better than Paulson's proposal but those were not in any of the choices.

I also see some folks who have no clue as to how much this melt down will cost them. During the depression unemployment rose to 35%. No one in my lifetime has seen more than 10 or 12% and that was a nightmare. How much do you think our government will spend to keep people from starving? Where will the money come from because no one will have income on which to pay taxes?

Many of us are relying on 401(k) plans and other pension investments to fund our retirements. When your former employer goes bankrupt and the plan's investments have lost 50% of their value, who will pay your pension? The same government may pick up some of the tab through the pension insurance. You would be receiving the same government money you were not willing to loan the banks to get through this crisis and the government has no chance to recover that through selling an investment it acquired at a discount.

I sent an email to my congressman letting him know that I hold him responsible for the extra years I may have to work before I retire. He voted against this bill rather than taking a leadership position and educating his constituents on the consequences of failing to act. I hope someone comes up with an alternative that people can support but nothing will include everyone's wish list.

Amcress,

Of course not, but we certainly can not trust those who caused the problem in the first place by requiring that loans be made to those without the financial ability to repay the loans. This was caused by the Clinton Democrat controlled Congress requiring sub standard loans. This experiment in Social Engineering has now blown up in our faces.

Unfortunately there are very few in the current Congress who are not tainted with support of, or at least failure to, oppose the system that blew up.

No bailout. Not now, not ever.The last decade has seen an entire generation of business school graduates waste its efforts on trading and capital transfers instead of investment and capital formation. The dislocation we are now going through must be wide enough and deep enough that our brightest young men and women will return to their proper role in our republic: leading our economy to and our government to prosperity.

I'm glad it didn't get passed!

What the heck? Bush wants to BORROW more money to purchase bad paper!!! This makes no sense.

Another way to look at it - The government wants to stabilize the credit market so we can add to our RECORD consumer debt level... This is insane!

Buy gold!!! INVEST IN ALTERNATIVE ENERGY TECHNOLOGY!!! We're spending $500 Billion per year on foreign oil!!!

The market will stabilize on its own. Short term pain now, or long term pain later!

Note that Donald Trump expects the price of oil to fall dramatically which will, according to Trump, create a great rebound of the economy.

I have noted that when oil prices fall the stock market goes up.

It looks like we have many varied ideas about what this will bring from varied sources.

What a great day for American Taxpayers. I'm a ridiculously liberal democrat who didn't want to see this passed. It's a terrible bill for taxpayers. Yeah, the credit markets still suck, but last I checked Costco was still open. There's a ton of ways to clear out the toilet without flushing 700 million dollars down the drain to boot. Has anybody thought about regulating CDS's and moving them to an exchange? Stop believing the lie that what's good for Wall St. is good for Main St., hope this thing doesn't come round again and try to store up a little cash for the incredible bargains you're likely to find! Fool on!

Relax everyone. There is an alternative that can be done without the Legislature's approval. See below.

Open the discount window to accept the distress securities. Create a valuation model based on time, type or other information to reach a realistic value. Lend "80%" of the value of a 50/50 blended package of currently acceptable collateral and revalued MBSs. This would limit the Government's exposure, or 60% of the revalued MBSs.,

But most importantly, it would bring the "mark to market" valuations closer to the real underlying values indirectly, rather than directly. Which is the true purpose of the Bush, Paulson and Bernanke plan. There would also be no chance for any upside unless the rate were slightly increased. No carrying cost. No attachments. No PORK. I hope that this is "Plan B" and it will save the taxpayer from Congress and perhaps save the Financial system at the same time.

Stephen Jensen

Banker / Economist

Government intervention is what created a lot of this mess to start with. Numerous reports have been out for years warning about Federal policy and its negative effect on a free market. Under the guise of "saving our economy" the Senate put in pork projects as part of this bail-out bill, i.e., giving taxpayers' money to ACORN! This bill should not be passed in any form-capitalism will work if the government will let it. This fascism disguised as "helping the county" is disgusting and Congress should be ashamed.

It's unfortunate it didn't pass, odious as it is for the government to get involved. Maybe a time-line needs to be included in the bill, so the entities that caused the problem have to hustle to build their liquidity, rather than sitting back and just taking handouts. There should be high expectations of them to buy back the toxic paper the government is taking off their greedy hands, sooner rather than later. If it weren't for the potential for the market to plummet I'd actually like to see what would happen without government intervention. Don't think we have the luxury of time for that right now, though. I also strongly believe that this bill needs to be more clearly explained to the public so that they'll better understand the reality of what's at stake.

I wish others in the Fool community were willing to address the monetary policy perpetuated by the Federal Reserve and fiat currency that created not only this mess, but also the 1929 boom/bust and the Great Depression.

I see commentors here and always proclaiming that we are headed for another Great Depression if we don't read history.

Well, even the Keynesians and Socialists now admit that 1) Federal Reserve policy of debasing the currency in the 1920s created the recipe for the 1929 bust - a policy similar to the one we have employed for the last 15 years. and 2) that the interventionist bailout of the government - both Hoover's and FDR's administrations only PROLONGED the depression.

Yes, we are sure to repeat history. Or, you can take a deep breath and read this wonderful PDF version of Murray Rothbard's Austrian School analysis of the Great Depression:

http://mises.org/rothbard/agd.pdf

His description of policy and popular opinion bears such close resemblance to today that it's frightening. For those of us with a dispassionate and curious mind, it seems there is no hope.

Sound money.

Balanced budgets.

End the Federal Reserve

Return to the Gold Standard.

Cheers,

David

We are in a financial crisis everone agrees. We don't agree on how to get out of it. My opinion is to let free enterprise take this issue and deal with it. I think we can solve it. Get the government out of it. Watch oil!! You can see the price coming down when it looks like no dea is going to be made. Oil is now $96.00 a barrel. If this deal goes through watch oil jump up to $125.00 or more!! Let enterprise rule and you will see oil drop back to 30-40-50 dollars a barrel, and you will see the economy start a comback. It will take some time, and we will suffer a bit, but the fat cats, Wall Street and rest will have to pay for their poor business practices!! In the mean time maybe we can kick a bunch of legistators out of office and put some people in who are willing to work for the people instead of themselves.

I'm definitely thankful this didn't pass today. This bill had quick fix written all over it, and at least in my experience quick fixes don't work...ever; they just make you feel better. Well, until you find out you just wasted your time and money :)

Greed and socialistic policies got us into this debacle, so why not give capitalism a shot this go around shall we? I mean continuous growth is great, but last I checked we're not in a utopia, so sometimes we'll hit recessions.

This is what irks me about government. So many times we already have laws that cover these situations, but someone gets lazy and doesn't enforce them. So, the natural reaction is to create more laws that won't get enforced.

Here's the scoop: If a bank wants to get rid of toxic paper, allow the public to bid on this paper. If the banks puts out $500K in mortgages and really wants to sell it, I'll bid $100K and kick the b*stards out of their house. I'm about ready to go to WFC and see if they'll take 60 cents on my up-to-date mortgage balance.

The problem with this bailout package is that it tries to address the wrong problem, by immunizing bondholders from their risk in holding bank debt rather than actually adding capital to the markets. Here's a pretty clear analysis of the question that economist John Hussman formulated as an open letter to Congress. It's worth reading:

http://www.hussmanfunds.com/wmc/wmc080922.htm

They let WaMu fail, and now our stock account is down a few thousand....How are they deciding who gets saved and who doesn't?? Only the BIGGEST screw-ups get saved?

What about us "little people"?? When do we get OUR bailout??

The whole system stinks. I'm not even looking at our stocks today, because it's too upsetting. I just don't trust the government to do the right thing...Is it more scare tactics or is it real?

What caused the end of the American empire? Our perverse value of American exceptionalism. Every socialist. Or fascist. Dude, how can you be socialist and fascist at the same time? It seems like the majority of Americans would rather give up on their fellow Americans than lend a hand. Let the individual spirit rule the country. Dog eat dog. Free flowing capitalism at its best. Ayn Rand's objectivists rejoice!

But where has it left us? A broken economy, a broken country. We are owned by China, our jobs are shipped to other 'more efficient' countries, the rich are becoming richer and the poor are becoming much much poorer. Is this capitalism? Who cares. What we need are solutions. Deep down I could care less about the -isms calling this bill socialist or fascist, non-American, like any of it matters. All of the people who are against the bill because 'we should let free markets run their course,' I want to know how the economy will run without any liquidity and four or five highly leveraged super-banks.

Without this bill we are nothing. Because what is America without its perverse capitalism?

Opposition to the rescue plan is a consequence of the electorate and the investment community' failure to understand some simple economics. This is a tragic day.

People are acting from a place of anger not sense or understanding. All of the arguments that describe the economic situation accurately and illustrate the dire consequences of not passing this rescue have already been made, and largely ignored.

Free markets require regulation to remain free. It is regulation that makes the market transparent and limits theft of investors money by management. It is a failure of regulation that caused this problem just as it was de-regulation that led to the S&L disaster.

In 1929 we chose the wrong path, non-intervention, and people vowed never to make that mistake again. Unfortunately those people are dead now.

The kids who grew up during the Great Depression are old, we don't pay much attention to them. We even ignored Warren Buffet who supported this rescue package. He understands the economy and what life is like during a Depression.

So now we are going to make the same mistake again. People will lose their jobs and their homes. Pension funds will not be able to meet their obligations and a lot of excellent companies will go bankrupt.

Economics is really a model of collective psychology. The markets are gripped by fear. This fear will probably result in irrational actions that will further damage the economy. The economy is what can save us but first we must save it.

The national debt, as a portion of GDP is estimated to be 70% which is manageable. Without borrowing another cent debt as a percentage of GDP will rise as the GDP contracts. In other words adding this debt facility will probably improve the debt/GDP ratio.

For you investors think of a national debt/GDP as being somewhat akin to the debt/equity ratio of a corporation.

The $700 billion addition to the debt would be small relative to the $$ trillion that the Bush administration has already added. By comparison the Clinton administration added about 1 trillion.

At the end of the Clinton administration debt/GDP was 57%

If people are truly concerned about the debt they should elect Democrats. Since WWII Republican administrations have increased the debt at more than twice the rate that Democratic presidents have.

Just track the national debt and GDP over the years on this chart:

http://www.whitehouse.gov/omb/budget/fy2006/pdf/hist.pdf

Select the data during years when a Democrat has been president against years when a Republican has been president.

It is all about the economy which is us.

I think it's so easy to sit and second guess everything that's been done in the last week or so, but where was all of this outrage a few years ago when anyone with half a brain could see this coming - enjoying their rapidly increasing investments. What about the "little people" - all those people who bought houses they knew they couldn't afford. I am very sympathetic to what is going on, but as the saying goes - if it seems to good to be true.... We all have responsibility in what happened, because we as Americans are basically apathetic to what is going on until it directly effects us. Where was all the pressure we should have been putting on our politicians when they were allowing all of the deregulations and subprime housing mortgages? I agree that a bandaid is a short term solution and generally just makes people feel better, but feeling better may make people a little more confident in their future - which in a capitalist society usually involves spending and investing money. And let's not forget who drives the market - it's people. And don't for one minute think the stock market wasn't controlled by people today.

So, if the market/economy should be allowed to correct itself, it's going to have to be up to individual people to react responsibly and not allow the market to crash further. I don't think people have enough confidence right now in their livelihood or futures to sit this one out. I think the bill would have allowed a breathing period. Besides, the bill could be amended with a new administration just as easily as it could have been passed. Nothing, especially in government, is written in stone.

I've lost about 80% of my net worth, with this economic 'crisis'. I'm quite upset, and am bitter towards the leaders of these companies who don't do what they are being paid to do. But I am at ease now that the House has shut down this Bill. I wish I never lost what I lost but it's a small price to pay to keep BIG GOVERNMENT medling more than they already do with this country. Yes, this too shall pass.

We shouldn't bail them out. Republicans insisted that "free Market" must rule without Govt Intervention. With the passing of the Gramm-Leach-Bliley Act in 1999 coupled with Gramm Commodity Futures Modernization Act in 2000, here is the result of less oversight. Now they want, no demand government intervention? The top 75 CEO's compensation pkgs for 2007 totaled over 4 billion dollars. Need I say more?

I am incensed by Nancy Pelosi's comments today. To interject not only partisanship but hostile and hateful partisanship into such a monumentally serious issue for our country should be grounds for her removal from the position of Speaker.

We do need a basic realignment of our markets. We need to repeal the 1977 community reinvestment act and all of the stupidity that followed it in order to bring sanity back to the realestate markets. Well meaning as this legislation is it is misguided. Poor people can't afford to own homes which is why untill 1977 banks did not issue them mortgages. We need to reenact the Glass-Steagul act in all of it's glory for the exact reasons it was enacted in the first place. We need to reinstitute the up-tick rule for the reason mentioned above. We need to protect our fearless leaders from themselves by passing legislation forbidding elected officials from participating in the markets including realestate while in office and for three years after leaving office. We need to reduce the corporate income tax rate to twenty percent and close the loop holes in tose tax rules. We need to reduce the tax rates on capital gains, intrest income and other investment income to one tenth of one percent for a period of no less than two years. This "bailout" will only prolong our agony and not provide any real solutions just look what happened in Japan. They are still feeling the affects after eighteen years. Then look at Canada they are recovering nicely. Fool on! there will be bargains once again.

Hire 10,000 ex-KGB agents. Set up a nice camp in Siberia. Send all the Wall Street types that made more than $1,000,000 a year from this mortgage securitization there and have them held for ransom until we get as much back as we can.

I have not heard of provisions to ensure lenders who seek federal funds under the bailout commit to set of criteria in future lending to eliminate the reasons for the problems creating the crisis in the first place:

ARM mortgages should be eliminated.

Subprime loans should be eliminated.

Mortgage bundling and REITs should be eliminated.

Perhaps all loans should be fixed interest and require down payments of at least ten percent or twenty percent.

Realistic loan qualification criteria should be used to determine the maximum loan amount based on borrowers current earnings and obligations.

Borrowers' credit ratings should also be required to determine maximum loan amounts.

Verification of employment should also be required.

Besides the law of supply and demand, there is another law, an immutable law, that I have continued to observe over the past 50 years of my life: The law of sowing and reaping. When one sows corn, they shouldn't expect to harvest peas. When one sows squash seeds, they shouldn't expect tomatoes. How is it then, that folks continue to sow greed and debt, not proper stewardship, and expect long term wealth and prosperity.

We are now reaping what we have sown. Sowing more debt ($700b) to put a new patch on that old wineskin, is just going to make matters much worse in the long run. Oh, it may provide some short term relief, but in the long run it will really hurt our future generations. It will also reward the greed and incompetency inherent in the current economic system, as well as serve as a slap in the face to many Americans who have been faithful stewards, who have saved, and who have not run up huge debt.

It is right for people to be concerned about the collapse of our economic system, similar to what happened in 1929. And why not? We, like idiots, have failed to heed the lessons of history and have made the same mistakes as before: We have allowed banks, insurance companies and investment brokers to effectively meld together in the same incestuous relationships as before. They in turn have invested in highly speculative and risky investments and loans. We were not content, as investors, to be partial owners in companies we believe in (i.e., stocks and bonds). We had to bring betting to Wall Street as well (futures, options, spreads, hedge funds, short selling, margin accounts, etc.).

Our government collectively and we individually, must turn back to sound principles of financial stewardship. Those principles include living within our means, and sound investing, not wild speculation. I hope it is not too late.

Wasn't it the demise of a bloated Freddie and Fannie that got us spiraling into this mess?

So why is our constant solution to government errors more government?

Why stop with just the bailout? Why not just go all the way? Give it all to Washington. Everything. If the federal givernment know what's best, then what are we waiting for?

We can make our own decisions. Even the bad ones.

It is a sad day for the United States when the Speaker and the President want to literally buy our liberty.

Please, no sale.

Some kind of bill needs to pass but I dont think ceo's should get any golden parachuts AND I also believe the failed mortgages should all be forclosed on no matter how sad the story so we can get out of this mess the sooner the better. And Congress should put politics aside, quit pointing the fingers of blame and get to work. And I blame the 24 hour news coverage of breathlessly reporting how the sky is falling and also pointing fingers of blame and in general causing widespread panic.

I disagreed with the bailout and applaud the Congress voting it down. I had written my congressman, Steve Chabot, to tell him specifically that I was against the bailout and that it amounted to corporate welfare. The people are overwhelmingly against this legislation! This is NO SURPRISE, and anyone calling this a "failure" is flat wrong, the people have spoken. It was a SUCCESS to vote this down.

ha, ha, ha, I am as mad as hell and cannot take anymore. Please join me in a bottle of virtual champagne as we watch Main Street burn. Burn baby burn! The 60s have really caught up with us! Watch as the poor (you, dear reader) march in the streets and line up for soup.

I cannot begin to understand how Main Street manages their money (they will not have any soon anyway, so that is a moot point). I am Main Street, retired. I placed a nice chunk of change in I-Bonds and T-Bills when I retired. Remember that 5-year plan the MF-RYR suggested??? I can wait it out.

A lot of Main Street will find a bleak / black Thanksgiving and Christmas. Too bad; they encouraged their representatives to obey them. Hah! probably the first time the reps ever did that. Chicken hearts.. they are supposed to represent the best interest of their community, not spineless obedience. The mob is not intelligent.

We asked for a vote of confidence and got it.... Major newspapers should follow the headlines in England when a PM goes down. "A VOTE OF NO CONFIDENCE".

BTW, thank-you Motley Fool for being there when I needed you. I hope the recovery does not really take that 5-years. I grew up very poor and was happy for that cup of soup per day, but do not want to do that again.

P.S. I read those 100+pages... did anyone else?

The Congress doesn't get it. I believe that this problem was caused by government more than Wall Street. Fannie Mae and Freddie Mac at the direction of the federal government guaranteed unwise loans to uncreditworthy people and sold them to Wall Street with an implicit, if not stated, guarantee. As I listen to the Speaker and others berate Wall Street greed and Bush deregulation as the culprits, I cringe. Any solution whose first step is not the dissolution of Fannie Mae and Freddie Mac only continues the problem. Propose a solution that respects free market capitalism, and I'll be willing to listen. The current bailout plan simply kicks the can down the road.

I know this is off topic and irreverent, maybe disrespectful, but wouldn't it have been funny if the DJI ended down by 666 instead of 777. The Christian right would freak.

zerozero3,

You are genius. Reading the comments here makes me realize how dumb our country really is. I only hope those on the hill are smarter then the majority of their constituents, come to a compromise and get something passed. History is a brutal master and all those who do not understand it will repeat it.

Here's one of the things that bothers me about the bailout. We are told that the taxpayers will get their dime back and maybe interest on their dime when the houses bought under the mortgage bailout are sold in the future. Homes on which mortgages have been foreclosed are probably setting empty. What will an empty house, with no active utilities, no security system (copper pipes, fixtures, etc. of some have been removed by thiefs), no pest control, no house or yard maintenance and subject to vandalism be worth when the time comes to sell it ? Maybe, only a nickel will be the return on a this dime.

You know what, I went by my credit union today and spoke with one of the senior loan officers. I asked her how this proposed bailout would affect her bank and she told me if anything, it might hurt business a little. What with all of these born again investment banks, being allowed to change into commercial banks. They'll be competing with the existing commercial banks and credit unions for depositors.

My two cents worth:

The last people I would have confidence in to find a workable solution to this economic problem in our country, is the same people who created the problem to begin with!

You can't tell me Paulson and Bernake couldn't see this balloon inflating two years ago! But you know what, if they really did not know, how much confidence does that inspire?

I believe some help from Washington is necessary but, I believe this bill wasn't a good solution. There were other ideas being floated which should have been given consideration before a bill of this magnitude and scope was thrown in front of the House with essentially a day or two to make a thoughtful analysis and decision. It seems to me too much like the typical government response which is quick to push through a solution, often times not achieving the desired outcome. I know the markets are extremely volatile and facing tremendous pressure but, I think taking another week to develop a sound plan is in our country's best interests. Besides, I think it was irresponsible to place so much authority in the hands of the Treasury even with the oversight they proposed. $700 billion would disappear quickly and they would be back to the well for more. A government/Wall Street versus purely taxpayer solution is necessary. I also don't think it helped to have the Speaker of the House, Nancy P come out and blame the whole mess on Bush and the Republicans immediately before the vote particularly when the Democrats continue to deny any responsibility for their actions which surely contributed to this mess. It is a bi-partisan mess and the Speaker as well as the other Democratic leaders need to acknowledge that and get politics out of the picture for the good of the country. I believe the post mortem will show who the culprits are and then we taxpayers need to kick them to the curb. It's time for our elected representatives to remember who put them there and who can kick them out. We need a comprehensive bi-partisan government and Wall Street solution. Seems like Wall Street feels the taxpayers own the problem. I have lost a lot of money in this environment but, I will not sell my soul to have the government adopt a plan which cause my grandchildren to face the burdens of paying off the national debt for the irresponsible actions of our generation. We can do better than that terrible bill. Let's get it done.

People... Do you want to go thru years of pain just to teach these guys a lesson, or protect what you have and at least have a chance to avoid another great depression (which would be much more brutal and violent then 29) ???

Call your congressman and asked them to get this bill thru... Problem is, most of the folks that are against it have no real investments to worry about, or concept of the way things work.. Combine that with an election year, and all I can say is get ready for all heck to break lose...

I was against the bill as it stood - I think the republican provisions/alternatives will make it pass-able - by Republicans anyway - lol. Ding. Round 2

Pelosi and Frank were disgracefull.

Short and sweet this was a total B@#% S*+% job on the part of the Republican party ( and some Democrats too). They are playing politics because they are worried about how this will look to their constituents and possibly put their seats in the house in jeopardy. If they were REALLY concerned about "Mr. and Mrs. Mainstreet" SOMETHING would have been done to stop the bleeding and then make changes later. They just keep saying It's socialism for the rich, that the people don't want this and I am not going to let them down. Guess what guys NOBODY wants to waste more than HALF A BILLON dollars covering the behinds of yours higher income friends who led us down the road to oblivion! But unfortunately for us, the people you won't let down, have been let down by you. You're keeping us in the dark about what the use of that money will really do...keep avg. joe financially alive becaue as we all know Mr and Mrs Mainstreet is always put in the forefront of crusades but are always crucified when it's all over!!! The Mainstreets loose no matter what action is taken because the rich get richer and the poor get poorer but the poor don't have to go down in oblivion. But why should you care, you have you're rich friends to help bail you out!

What are the details of this plan?

i.e - what fiscal controls to help out taxpayers?

- how will we (taxpayers) be compensated if plan works?

- what will prevent leaders from scamming us again?

- what protections will be in place to prevent good-old-boy system as it is currently being used in politics and wall street

- will greased palms get preferential treatment as is current practice on wall street and Washington?

Warren Buffet once said "I'd rather be generally right, than precisely wrong." The bill may not have been perfect, but in voting it down, I'm reminded of the phrase "cutting off your nose to spite your face". God help America.

uaford: greetings. Don't be fooled again the sky isn't falling. check with your local banker the lending window is open. However they only loan money to people with a reasonable expectation of being repaid. urMajesty your argument is a travesty Jimmy carter started this. Bill Clinton accelerated it and none of our fearless leaders have had the guts to deal with it. Just like Medicare and Social security we have to have a crises for reasonable change to happen. This "Bailout is a bad idea built on fear. When the big banks which were exposed to bad paper finish failing and have been purchased by well funded institutions like Wells Fargo (WB) thier lending windows will be open again also, Fool on.