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After key lawmakers felt a bailout plan agreement would be reached, talks "imploded" as the day progressed. Here's how the NY Times reports what happened:
The day began with an agreement that Washington hoped would end the financial crisis that has gripped the nation. It dissolved into a verbal brawl in the Cabinet Room of the White House, urgent warnings from the president and pleas from a Treasury secretary who knelt before the House speaker and appealed for her support.The Wall Street Journal described Paulson's actions as a "moment of levity in a rough day" (per sources--he had "interrupted a small gathering of Democratic leaders at the White House with a plea for them not to say anything that might blow up the troubled deal").“If money isn’t loosened up, this sucker could go down,” President Bush declared Thursday as he watched the $700 billion bailout package fall apart before his eyes, according to one person in the room.
Talks ended last night because House Republicans decided to present their own plan--one that would require Wall Street to purchase insurance for mortgage-backed securities and include tax cuts and "relaxed regulation." Democrats accused the House Republicans of abandoning the existing bipartisan plan, while Republicans say their plan "does not leave the American taxpayers with the bag and makes sure that Wall Street pays for this recovery."
The Democrats also accused Senator John McCain of working with House Republicans and ruining talks. The Times' analysis questions McCain's decision to head back to Washington D.C. While he asked both parties to put aside their differences, wanting to essentially save the day by leading the country to a plan, the Times reports "Instead he found himself in the midst of a remarkable partisan showdown, lacking a clear public message for how to bring it to an end."
With this news, plus the failure of Washington Mutual, stock futures are indicating "sharp declines." Put your seat belt on for the roller coaster.
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Bush and McCain... all smiles.
This is all a bunch of BS.. the House GOP didn't indicate any problem until last night, and they never asked at the hearings what Paulson or Bernanke thought of their idea.
Maybe that's because Paulson had already said that an insurance type plan would not work.
And then there's the part of their plan where they want to "remove regulatory and tax barriers that are currently blocking private capital formation". That's right.. Removing regulations and lowering taxes. Exactly what's been done for the last 8 years.
What a crass idiot!
Apparently the current GOP has yet to hear the phrase "Its the economy, stupid!".
They seem to forget that normal people actualy owned stocks like Lehman, Bear Stearns, Washington Mutual, AIG, Fannie May, and Freddie Mac in their portfolios and retirement accounts, and that such people tend to vote.
All I hear is talk about bail-outs and no discussion of ending the practices that led to this fiasco, such as forcing banks to lend to people based on minority status instead of ability to pay, cough up a down payment or provide collateral, which by the way, was the handiwork of the democrats over the years.
Of the 2 candidates, McCain is the only one to remember he's still being paid to be a senator and was willing to drop his extra-curricular activities to be in DC. Obama doesn't look too thrilled to be dragged back to his day job. He can alway vote "present' I suppose.
glad that they are not rolling over on cue. At the end of the day WE foot the bill so let them fight tooth and nail over the specifics if need be.
Can any else believe that the biggest supporters of the Bush/Paulson plan are Pelosi and Frank? Maybe they want the middle class to foot the bill after all!
Obama doesn't look to thrilled to be forced into a photo-op with this axis of evil.
Also, I don't understand why McCain would put himself in the middle of this bank failure shitstorm. Does he not recall the Keating Five?
luckily, social security wasn't changed into personal accounts in the stock market or mcsame would have lost the elderly vote.
I'd like to believe that Congress is fighting this on behalf of their enraged constituents, but it's more likely lip service.
Paulson will get his no-strings $1T anyway.
That man has some brass ones asking for it that way, too.
Let's face it, America's wealth is all on paper these days. We buy Arab oil to put in Japanese cars to drive to Wal Mart of the Dollar Store to buy lots of Chinese made crap.
Instead of getting rich by creating and selling an innovative product people want for a fair price, we have gimmicky, convoluted financial schemes like this mortgage repackaging that inevitably collapse.
That's the big philosophical picture and I guarantee you, nobody is discussing that in DC.
ides_of_march: your racism is incredibly obvious to everyone.
"such as forcing banks to lend to people based on minority status"
&
"Arab oil to put in Japanese cars to drive to Wal Mart of the Dollar Store to buy lots of Chinese made crap"
It is incredibly despicable for McCain and co. to turn this into a big political stunt, but that's the impression I'm getting. Bastards.
No one ever forced any bank to ever lend to anyone. The banks made all of their lending decisions on their own.
ides better be on the payroll of the mccain campaign.
i refuse to believe anyone can be so stupid unless paid.
ides_of_march:
I'm so glad McCain didn't "shirk his duties" so he could go back to Washington to fix this crisis.
According to the NYTimes: "At the bipartisan White House meeting that Mr. McCain had called for a day earlier, he sat silently for more than 40 minutes, more observer than leader, and then offered only a vague sense of where he stood, said people in the meeting."
That's the type of leadership we need.
luckily, social security wasn't changed into personal accounts in the stock market or mcsame would have lost the elderly vote.
You're really drinking the Obama Kool-Aid. Not that I am endorsing the idea but Bush's proposal would not have included anyone over 50. And no more than about 30 percent of a worker's Social Security tax would be diverted.
"Of the 2 candidates, McCain is the only one to remember he's still being paid to be a senator "
That's why he hasn't cast a vote in the Senate since April, right? And that probably explains why he missed more votes than the guy whose fucking brain was bleeding, right?
"ides_of_march: your racism is incredibly obvious to everyone."
What's racist is the lowering of standards to minorities and setting them up for the trauma of foreclosure and a life-time of ruined credit. That's not helping minority communities, that's being downright cruel to them. Unfortunately, that's what self-righteous white liberals do best; screw the people they claim to be helping.
Perhaps the intentions were noble but the road to hell is paved with good intentions.
It's all lowlife politics. Look for McCain to "push through the logjam" and then emerge to claim he is responsible for passing this bill.
"That's the type of leadership we need."
If you believe everything you read in the Obama Times I guess.
Dems better watch out. If they push through this current bailout provision with taxpayer $ and it fails or bogs down the system, the Reps will use this time as ammunition for years to come. Of course no bailout means the markets have to correct themselves (i.e. allow participants to fail) and they look like free-market advocates (god forbid!!)
Yep, time to start drinking our urine.
"practices that led to this fiasco, such as forcing banks to lend to people based on minority status instead of ability to pay"
HAHAHAH!
The banks were happy to lend to ANYONE, without any legislation. They were reselling the mortgages to the investment banks for a fee. IB's repackaged the loans and sold them back to the banks as high-quality and high-yielding papers. That's how you get high-yield savings accounts.
For the love of god, stop watching Faux News; otherwise you'll start blaming the democrats for the solar eclipse.
Ides,
This mess is because banks lent to all unqualified applicants, of every color. Are you saying that banks should have only lent to the unqualified whites?
You must be freaking out at the possibility of a minority in the white house.
Bill Clinton played his part in the current mess in a BIG way
Ides can't see the forest for the trees.
First, to clean up this mess there should be a Greed Multiplier applied to any crappy security the government winds up taking off Wall Street's hands. For every transaction the composition of the security in question should be examined for factors such as integrity in lending, honesty in disclosure, compliance with regulatory norms, etc. Then a multiplier of 0.00 to 1.00 should be applied to the best estimate of the security's value.
Paper that was deemed to have the highest possible Greed Factor would get a multiplier of 0.00 and the gov't would pay nothing for it. Paper that was totally above board would get a 1.00 and government would pay full price. Paper midway from the two ends of the scale would have a 0.50 and gov't would pay half.
Then start from the bottom and rewrite the rules. Make it so that people have to assume the risks they create. That right there would change everything.
"Are you saying that banks should have only lent to the unqualified whites?"
Stop putting words in my mouth, I never said that, jackass. Banks should lend only according to ability to pay back, race should never come into it, too bad your politically correct brainwashed mind can't grasp that. Take that race card and go wipe your ass with it.
"Ides can't see the forest for the trees."
And you make too many assumptions. I'm against the bail-out. If there must be one, however, it has to include some prosecutions of the many people responsible for this mess. Of course, that's just a daydream.
anybody think this is a republican conspiracy that makes it seem that McCain will lead the republicans to sign on the bailout that they were going to sign anyway?
While it's true a lot of people got mortgages they had no business having, that is beside the point.
Middle and lower class families, many of which were minorities as ides_of_march said, who can't pay for their own homes don't cause a trillion-dollar mess. The real problem, as yq stated it, was created when rich white guys turned all those bad mortgages on overvalued homes into securities they could get even richer off of.
It's also true that people from both parties changed laws to allow all of this crap to happen. Laws like this get changed because banks/brokers hire lobbyists to essentially bribe politicians to make rules that benefit big corporations and not us. The underlying problem is how money corrupts the political process.
The myth of McCain is that he is above the fray on politics. McCain injected himself into the bailout talks to help his campaign and made the situation worse.
Now, it looks like a deal is coming together despite McCain.
Huh. No deal and Sen. McCain is going to the debate?
Shocking! It's like you can't trust his word...
I make no assumptions about you and what I wrote was not addressed to you. But you must know that any iffy mortgages that were given to minorities solely to meet some affirmative action standard make up a tiny drop in the bucket of bad loans. To somehow try to make it seem like this is a real issue is to be totally disingenuous.
Ides,
you're hilarious. Who mentioned minority lending in their very first post?
"All I hear is talk about bail-outs and no discussion of ending the practices that led to this fiasco, such as forcing banks to lend to people based on minority status instead of ability to pay"
Do you actually think banks were pressured by dems to lend to people because they were minorities? Because that's some pretty creative paranoid racism there. Well done, sir. Or did someone on FOX put that one in your head?
Actually, I think the banks gave mortgages with the knowledge that they would foreclose on the property.
As long as the price of the property keeps going up, the bank cleans up.
The reason the Savings Rate went down to 0 is the new rules that allowed little or no downpayments for mortgages. The reason the mortgage markets collapsed was because these zero-down homeowners couldn't afford the terms. The reason the financials couldn't survive this mess is that the Savings Rate is 0 and they couldn't fold all those savings accounts into their capital base. "Minority lending" is just a nice republican way of saying that they blame this whole mess on Blacks, just as they have for the last 150 years. Ides Of March is another racist troll, ignore that garbage.