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[Otus]

Hopefully this is obsolete within the next 24 hours or less ... but after watching CNBC for the last couple of hours I've gotta say WTF with regard to the US federal bail out proposal. I mean - WTF with regard to the Democrat House and Senate:

- They want to pass the proposal.

- They have the majority to pass the proposal regardless of any Republican opposition.

- They have the support of a Republican executive (president) who also wants to pass it ...

But

They're afraid to pass it and refusing to pass it without support from the minority Rep. Senate and Congress.

Ummm ... about time to grow a pair ....

If it were the other way round with the parties ... wouldn't this have been done in 5 minutes?

[Join Me]

uhhh...maybe they aren't passing it because the majority of Americans (myself included) don't think their tax dollars should be used to bail out corporate execs who mismanaged their companies while giving themselves millions in salaries and bonuses?

And as this article states, many Republicans don't support this taxpayer financed bailout of Bush either.

http://edition.cnn.com/2008/POLITICS/09/26/bailout.talks/index.html

[Otus]

The way it's coming across at the moment - the Dems will do it right away provided the dissenting Rep. minority will hold their hands while they do it.

I'm sure there must be some dissenting Dems as well - but they seem to be whipped into party line.

Oh - now Bush has just come on and said we're gonna get a consensus and do it.

Are the D's actually prepared to do something they want to do that is hugely unpopular with the public?

What a political fireball? McCain may be playing with something here.

[coffeeNOW]

You miss the point Otus.

Apart from broad objections from many of their constituents (in an election year) Paulson's proposal is not a guaranteed cure-all for the mother of all fark-ups that is the US financial system (or should I say the global financial system given how intertwined all market participants are and the fact that the bail-out is not limited to US banks/institutions).

This is large-scale guesswork (where did the figure of $700b even come from? Treasury hasn't bothered to detail their calculation) and the chances of it succeeding are about the same as the last dozen or so measures the Fed and Treasury have pursued (each of which did not in fact mark the turning point that everyone had hoped - how many "this is it! the worst is behind us!" equity market rallies have we had? I lose count.....).

The chances are therefore high that this proposal will:
- prove to be insufficient in quantum to absorb all of the dud assets banks wish to dump;
- fail to address some of the key issues affecting markets currently (this is essentially a crisis of liquidity - banks and other institutions are not willing to lend to each other for fear of not being repaid even on overnight money, let alone lending to the corporate sector - personally I can't see them suddenly ripping out the cheque book with a gleeful smile and saying "all is right with the world now" let's lend!" as soon as this proposal is passed, this will take a lot longer than most people expect);
- ultimately lose taxpayers an awful lot of money when some of these crap "assets" eventually prove to be worth less than even the 30 cents in the dollar they were purchased for.

Given the above it is therefore probable that if the Democrats push this through without broad-based Republican support it would become serious ammunition for the Republicans in the future - "Man I TOLD YOU not to pass the bill in that form, we had amendments all ready to go which would have solved all these problems that you are now foisting on the poor unfortunate US taxpayer...you bastardos....""

[Otus]

points taken - hence I remarked 'political fireball'

[Ya-ta Boy]

coffeeNOW is correct.

Had Democrats adopted the conservative line of do nothing and just let meltdown happen, and it did happen, they as the majority party would have been blamed for doing nothing to prevent it. With a consensus, they can act and keep their fingers crossed that they did the right thing.

[Ya-ta Boy]

More on why Democrats need Republican support:

WASHINGTON - There is scant public support for President Bush's $700 billion federal rescue plan for the financial industry and little expectation it would solve the crisis that has roiled the markets and hobbled some of the country's largest investment firms, according to a poll released Friday.

Just 30 percent say they support Bush's package, according to an Associated Press-Knowledge Networks poll released as White House and congressional leaders struggled to rescue the plan after House Republicans rebelled against it. Despite the president's pleas that the package is urgently needed to prevent an economic meltdown, 45 percent say they oppose Bush's proposal while 25 percent said they are undecided.

http://news.yahoo.com/s/ap/20080926/ap_on_el_pr/ap_poll_financial_meltdown