After 12:30 p.m. Eastern time the House will vote on a $700 billion bailout bill that is designed to avoid a global financial disaster. This morning President Bush addressed members of Congress, asking them to support the bill that has managed to garner vehement distrust in the hearts of voters across the country. In addition to the events taking place in Congress, the foreign markets are feeling the squeeze today, and Citigroup just bought the banking operations of Wachovia.
- “Based on the thankful press releases issued last night by the President and the Treasury Secretary, you would almost think that the Emergency Economic Stabilization Act of 2008 has actually been signed into law – but, in fact, it still faces a tough vote in the House today and a vote in the Senate on Wednesday. What did happen over the weekend were marathon negotiations that brought about the current bill, which Nancy Pelosi (D-CA) has described as “frozen” (as noted in this Washington Post article). As a result, we now have a clear picture of what the “TARP” program will look like if the bill is ultimately enacted.” – from The Mother of All Bailouts: Off to a Vote, at TheCorporateCounsel.net Blog
- “Even before Congress passes a $700 billion bank bailout that nearly all legislators believe to be both necessary and unpopular, the jostling has begun over legislation that may prove to be the first test for the next president: How to reshape the financial system and its regulation.” – from After the Deal, the Focus Will Shift to Regulation, at DealBook
- “Congress, regulators and leading figures in the Bush administration worked overtime this weekend and have crafted a compromise bill that apparently will be put to a congressional vote this upcoming week. A copy of the current discussion draft (which House Speaker Nancy Pelosi says will be “frozen” in this form) that likely will be put to a vote this week can be found here.” – from A Quick Look at the Bailout Bill, at The D & O Diary
- “The plan directs the Treasury Department to engage in reasonable modifications for residential mortgage loans it controls and to encourage servicers to do so for loans it doesn’t control. As I’ve explained in numerous posts (here and here, e.g.), Treasury is unlikely to end up controlling many distressed residential mortgage loans directly. And Treasury has been encouraging servicers to do loan modifications since last fall, but with very limited success. There is no reason to think that the bailout suddenly changes anything. In short, Congress enacted some show provisions about consumer relief, but nothing of substance. This is the same move Congress pulled when it enacted the HOPE for Homeowners Act in July. All sizzle, no steak.” – from Congress to Homeowners: Drop Dead, at Credit Slips
- “Stock markets in Asia fell Monday afternoon on renewed fears of a global credit crunch, erasing earlier gains when investors had initially welcomed a weekend agreement among Congressional leaders in Washington on a bailout plan for financial institutions.” – from Asian Markets Retreat Despite Bailout Agreement, at DealBook
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