Looks like the markets are not all that impressed with the bailout plan. I suspect that his reflects concerns that the plan may not sail through smoothly, as hoped by Paulson and Bush.
Turns out a bunch of people wrote their representatives (thanks everybody!),and a lot of editorial pages came out against this massive act of larceny.
But first, I am very close to sending out an Alert based on the behavior of the dollar. Should interest rates also begin to climb here (so far not so much), then we enter the next stage of this crisis.
Bailout taking shape (emphasis mine)
NEW YORK (CNNMoney.com) — The Bush administration’s proposed $700 billion financial rescue took fuller shape on Monday as Senate Democrats circulated a counter proposal that would require the government to receive an ownership stake in the companies it helps.
A provision offered up by Senate Banking Committee Chairman Christopher Dodd, D-Conn., would require companies who sell assets to Uncle Sam to give the government shares in the company, according to a draft obtained by CNN.
And the Senate Democrats’ proposal would also require the government to come up with "a systematic approach for preventing foreclosures and ensuring long-term, sustainable homeownership through loan modifications and use of the HOPE for Homeowners Program" on the mortgages it buys in the bailout.
The Bush administration is pushing for a "clean" bill to be passed quickly and not be loaded up with provisions that would deter companies from participating.
"[T]he whole world is watching to see if we can act quickly to shore up our markets and prevent damage to our capital markets, businesses, our housing sector, and retirement accounts," President Bush said.
Congressional leaders, however, say they don’t want to give the Treasury Secretary a "blank check" without provisions that protect taxpayers.
At the same time, financial institutions are weighing in with what they want in the bill. On Sunday, the Financial Services Roundtable – a lobbying group representing the nation’s banks – called on Congress to make the plan "broad enough to include different types of assets."
So we have the Bush administration trying to get something rammed through as fast as possible, but enough people on the other side are saying "not so fast," creating enough uncertainty that the markets are responding poorly.
Here’s what independent Senator Bernie Sanders from VT has to say:
While the middle class collapses, the richest people in this country have made out like bandits and have not had it so good since the 1920s. The top 0.1 percent now earn more money than the bottom 50 percent of Americans, and the top 1 percent own more wealth than the bottom 90 percent. The wealthiest 400 people in our country saw their wealth increase by $670 billion while Bush has been president. In the midst of all of this, Bush lowered taxes on the very rich so that they are paying lower income tax rates than teachers, police officers or nurses.
Now, having mismanaged the economy for eight years as well as having lied about our situation by continually insisting, "The fundamentals of our economy are strong," the Bush administration, six weeks before an election, wants the middle class of this country to spend many hundreds of billions on a bailout. The wealthiest people, who have benefited from Bush’s policies and are in the best position to pay, are being asked for no sacrifice at all. This is absurd. This is the most extreme example that I can recall of socialism for the rich and free enterprise for the poor.
This looks like the old populist message that has been so long dormant/suppressed in this country. Should that animal spirit re-awaken, social unrest will follow. Hell hath no fury…