Rep. Brad Sherman (D-CA) Wed. Oct. 1, bailout bill debate
Sherman: Many of us were told, in private conversations, that if we voted against this bill on Monday [Sept. 29], the sky would fall, the market would drop two or three thousand points the first day, and another couple thousand the second day, and a few members were even told there would be martial law in America if we voted no.Avedon, Simbaud, and Boing Boing linked to this clip. I actually recorded the whole October 1 presentation by the "Skeptics Caucus"--Rep. Sherman, Rep. Kucinich, and Rep. Kaptur among others. Apart from Rachel Maddow, Amy Goodman, and Laura Flanders, the skeptical approach to this bailout has gone right over the collective media head.
We'll see, but I think after the last few days' events (Dow about -1000, that's -10%, since the bill passed), it looks like we can agree that the root cause of the panic was not cured by whatever medicine was supposed to be in there.
Here is an indication of how confusing the situation has become: U.S. Treasury bills and notes are taking a hit as the Fed massively injects "liquidity" into commercial banking under "emergency" conditions:
Treasuries Decline as Fed Agrees to Purchase Commercial Paper
By Dakin Campbell and Daniel Kruger - Bloomberg
Oct. 7 (Bloomberg) -- Treasuries fell, snapping the longest rally in a month, after the Federal Reserve announced a plan to buy commercial paper in an effort to thaw short-term lending markets, sapping demand for the haven of government debt.The full article is very confusing. Is it a "good" thing that the Fed is riding into these markets on a white horse? Or does it portend the breakdown of U.S. Treasuries as the haven of safety? Whatever the case, the market moves are violent in response, "A measure of volatility in the Treasury market reached an all-time high yesterday. Merrill Lynch & Co.'s MOVE index, an options-based gauge of changes in prices for Treasuries, surged to 217.3, the highest since its creation in 1988." Hmmm. After all this borrowing, who's beginning to think that the weight is at least weakening the legs of the empire itself?
Two-year notes fell for the first time in five days as the Fed invoked emergency powers to support the financing needs of corporations. ...
That's how Rome fell, right? They couldn't pay the bills for all their far-flung armies and their decadence. Their marker became no good in places they needed it to be. As their forces hollowed, others no longer were as afraid of them.
Meanwhile, here's Bush (at some office products company).
President Bush: It's going to take time for these actions that I've described to you in the bill to have full effect. You want to make sure that when we move, we move effectively. You want to make sure that the plan is well thought-out and well delivered. Thawing the freeze in the financial system is not going to happen overnight, but it will be a process that unfolds over several stages. And obviously the first stage began last Friday, when I signed the rescue package into law.Say what? First stage?? I thought the panic last week was only fixable--instantly so--by oh great Bailout Bill. Now we're told that we just have to wait for the smart, deliberate Bush process.
As Dennis Kucinich said, this smells. We're in a lot of trouble now.
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