Bailout Plan is Going to Fail to Pass

[Torie]

Some version of it will be back.

[Torie]

My Congressman voted for the bill of course.

[Torie]

Oh my God. I'm going to be poor.

Really?  What are you invested in?

Wachovia I think. I told him the bank would fail this week. I was wrong. It ceased to exist as a bank on Sunday night.

[Torie]

I was down about ten percent overall, but have mostly recovered.  Well, that's my little stock market fun money.  I'm a small player on the open market, though.

I dread to look at my retirement account.  I have lost about three thousand dollars per quarter over the past several quarters, and that even counts the 1500 I put into it each month.  So basically I'm at a net loss for at least six months now.  But I have purposefully invested more aggressively.  My wife invests much, much more conservatively in her 403B plan, by mutual agreement.  

I have no idea what happened to mine today, because I didn't look, but I'd rather lose every single penny I have in it and have to start all over than see even one taxpayer dollar go to the banks in this manner.  And I expressed it in exactly those words in an email to Bruce Braley.  Apparently I wasn't the only one in my district who did so, thankfully.  Every vote counts.  Stay on your elected officials about this, because the house and senate might not let it go at one defeat.  They love to spend your money.

And as jmfcst said, it's really best not to panic.  Let this recession run its course.  We have ups and downs.  And, really, you still have your health and your smarts.  Money is a fleeting thing, after all, and it grows on trees anyway, so it's probably best not to give yourself a heart attack worrying about the stock market.

The sad thing is to watch the mounting losses in my high credit quality short term corporate bond fund, which is the largest holding by far in my retirement account. I bet it dropped another couple of percent today (it's just not so high credit quality anymore - heck it lent some money to Lehman Brothers and WAMU and Wachovia - ouch!)

[Torie]

R.I.P. economy.  Congress failed us in the most epic way.  Saving their own electoral hides at the expense of us all.

I am not persuaded this bailout would have made much difference. It was only going to be spent at 50 billion a month, and if there are no real subsidies (they seem to have been cut back under pressure), the feds can provide liquidity other ways, and are - to the tune of 350 billion today.

[Torie]

The few who voted YEA actually make sense considering the lean of their district.

Kanjorski committed suicide for some reason. (yea I know he was a negotiator, but geez)

Ya, my Congressman loves this bill, in the land of high real estate prices going down, and trust funds eroding. Of course we need a government bail out!

[Torie]

Does anyone seriously doubt that congress will fail to pass any bailout bill?

Though this first bill failed, there will no doubt be a vote that will pass.  Presumably, that bill will be a more cautiously constructed affair with a smaller price tag to the American tax payer.

It's far too early to call this a disaster.  Today was painful, but an overreaction.  A bailout will be passed, and those 777 points will be factored back into stock prices.

Don't count on any bill to jump start stock prices. I doubt that will happen.

[Torie]

Anyone else feel like our situation is creepily like Japan in the mid 1990's? What are the chances we head down the same track (ie a severe recession larger than anything since the great depression).

The US tanks failed institutions in a hurry. Japan didn't. That is a big difference. The key is to get assets priced right, and get rid of institutions that are under water.

[Torie]

There isn't much left to WB to bail out. I think all it has left is its brokerage business. Plus, booking losses to deduct from your taxes has some merit, aka tax loss harvesting. The mega banks are more likely to benefit from the bailout, since they have a lot of bad assets on their books now.