Full Version: Economic and Financial News
Bringing Down Wall Street Shows How Moody's, S&P Unloosed Subprime Scourge Frank Raiter says his former employer, Standard & Poor's, placed a ``For Sale'' sign on its reputation on March 20, 2001. That day, a member of an S&P executive committee ordered him, the company's top mortgage official, to grade a real estate investment he'd never reviewed.
Paulson, Bernanke Put Shoring Up Banks Ahead of Cutting Best Taxpayer Deal Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben S. Bernanke have signaled that their priority is shoring up the nation's banks even if it means they don't get taxpayers the cheapest prices for the devalued assets the government buys.
Credit Derivative Traders Sowing Seeds of Destruction Prompt SEC Crackdown The $62 trillion market for credit- default swaps, created to protect banks from loan losses, helped fuel a near-meltdown in the financial system and now may be regulated for the first time.
China Shuns Paulson's Free Market Message as Financial Meltdown Burns U.S. Eighteen months ago, U.S. Treasury Secretary Henry Paulson told an audience at the Shanghai Futures Exchange that China risked trillions of dollars in lost economic potential unless it freed up its capital markets.
Stocks slammed on bailout doubt and WaMu failure
- Market Watch from Dow Jones
- 09/26/2008 08:51 AM
- Bloomberg
- 09/26/2008 08:02 AM
- Bloomberg
- 09/26/2008 07:53 AM
- Bloomberg
- 09/26/2008 07:52 AM
- Bloomberg
- 09/26/2008 07:52 AM
- Bloomberg
- 09/26/2008 07:53 AM
- Bloomberg
- 09/26/2008 07:54 AM
Leaders Wrangle Over Bailout
- WSJ ($)
- 09/25/2008 09:32 PM
- NY Times
- 09/25/2008 09:01 PM
- WSJ ($)
- 09/26/2008 06:02 AM
- WSJ ($)
- 09/26/2008 05:48 AM
- Bloomberg
- 09/26/2008 07:58 AM
- Market Watch from Dow Jones
- 09/26/2008 05:16 AM
- Washington Post
- 09/26/2008 05:39 AM
- Washington Post
- 09/26/2008 05:41 AM
Bailout in chaos, feds seize WaMu
- Reuters
- 09/25/2008 09:03 PM
- Bloomberg
- 09/26/2008 05:16 AM
- Bloomberg
- 09/26/2008 05:15 AM
- NY Times
- 09/25/2008 09:02 PM
- WSJ ($)
- 09/26/2008 05:55 AM
- Bloomberg
- 09/26/2008 05:22 AM
- Bloomberg
- 09/26/2008 05:21 AM
- FT
- 09/25/2008 09:52 PM
- FT ($)
- 09/25/2008 09:47 PM
- ABC News
- 09/26/2008 07:57 AM
- Boston Globe
- 09/26/2008 05:44 AM
- WSJ ($)
- 09/25/2008 09:44 PM
Shoot first
- Economist
- 09/26/2008 05:49 AM
- Economist
- 09/26/2008 05:47 AM
- Washington Post
- 09/26/2008 05:23 AM
- USA Today
- 09/26/2008 05:42 AM
<h1 class="posttitle"> RGE Conference Call on the Economic and Financial Outlook..and why the Treasury TARP bailout is flawed</h1> PrintShare Delicious Digg Facebook reddit Technorati Nouriel Roubini | Sep 26, 2008 On Wednesday this week I had a 90 minutes conference call with users of the RGE Monitor service where I presented my views on the current financial crisis and the US and global economic outlook; my presentation was followed by a Q&A session with the over 500 participants in this call.
The audio replay of this conference call is now available here (freely available to all free registered users of RGE); a written transcript of the conference call will also be available soon.
CNN Money provided a very short summary of the main points I made in my conference call (see also the recent commentary by Glenn Beck of CNN).
In the call I also presented my 10 step HOME plan to resolve the US financial crisis; details of this plan are available in a recent writing by me.
The Treasury plan (even in its current version agreed with Congress) is very poorly conceived and does not contain many of the key elements of a sound and efficient and fair rescue plan. Like in my 10 step HOME plan many other economists and commentators (Charles Calomiris, Raghu Rajan, Kotlikoff and Mehrling, Luigi Zingales, Martin Wolf, Barry Ritholtz, Chris Whalen and twenty others whose views have been featured this week in the RGE Monitor group blogs) have presented ideas that would have minimized the cost to the US taxpayer of a resolution of this financial crisis. It is a disgrace that no professional economist was consulted by Congress or invited to present his/her views at the Congressional hearings on the Treasury rescue plan.
Specifically, the Treasury plan does not formally provide senior preferred shares for the government in exchange for the government purchase of the toxic/illiquid assets of the financial institutions; so this rescue plan is a huge and massive bailout of the shareholders and the unsecured creditors of the firms; with $700 billion of taxpayer money the pockets of reckless bankers and investors have been made fatter under the fake argument that bailing out Wall Street was necessary to rescue Main Street from a severe recession. Instead, the restoration of the financial health of distressed financial firms could have been achieved with a cheaper and better use of public money.
Moreover, the plan does not address the need to recapitalize badly undercapitalized financial institutions: this could have been achieved via public injections of preferred shares into these firms; needed matching injections of Tier 1 capital by current shareholders to make sure that such shareholders take first tier loss in the presence of public recapitalization; suspension of dividends payments; conversion of some of the unsecured debt into equity (a debt for equity swap).
The plan also does not explicitly include an HOLC-style program to reduce across the board the debt burden of the distressed household sector; without such a component the debt overhang of the household sector will continue to depress consumption spending and will exacerbate the current economic recession.
Thus, the Treasury plan is a disgrace: a bailout of reckless bankers, lenders and investors that provides little direct debt relief to borrowers and financially stressed households and that will come at a very high cost to the US taxpayer. And the plan does nothing to resolve the severe stress in money markets and interbank markets that are now close to a systemic meltdown.
The audio replay of this conference call is now available here (freely available to all free registered users of RGE); a written transcript of the conference call will also be available soon.
CNN Money provided a very short summary of the main points I made in my conference call (see also the recent commentary by Glenn Beck of CNN).
In the call I also presented my 10 step HOME plan to resolve the US financial crisis; details of this plan are available in a recent writing by me.
The Treasury plan (even in its current version agreed with Congress) is very poorly conceived and does not contain many of the key elements of a sound and efficient and fair rescue plan. Like in my 10 step HOME plan many other economists and commentators (Charles Calomiris, Raghu Rajan, Kotlikoff and Mehrling, Luigi Zingales, Martin Wolf, Barry Ritholtz, Chris Whalen and twenty others whose views have been featured this week in the RGE Monitor group blogs) have presented ideas that would have minimized the cost to the US taxpayer of a resolution of this financial crisis. It is a disgrace that no professional economist was consulted by Congress or invited to present his/her views at the Congressional hearings on the Treasury rescue plan.
Specifically, the Treasury plan does not formally provide senior preferred shares for the government in exchange for the government purchase of the toxic/illiquid assets of the financial institutions; so this rescue plan is a huge and massive bailout of the shareholders and the unsecured creditors of the firms; with $700 billion of taxpayer money the pockets of reckless bankers and investors have been made fatter under the fake argument that bailing out Wall Street was necessary to rescue Main Street from a severe recession. Instead, the restoration of the financial health of distressed financial firms could have been achieved with a cheaper and better use of public money.
Moreover, the plan does not address the need to recapitalize badly undercapitalized financial institutions: this could have been achieved via public injections of preferred shares into these firms; needed matching injections of Tier 1 capital by current shareholders to make sure that such shareholders take first tier loss in the presence of public recapitalization; suspension of dividends payments; conversion of some of the unsecured debt into equity (a debt for equity swap).
The plan also does not explicitly include an HOLC-style program to reduce across the board the debt burden of the distressed household sector; without such a component the debt overhang of the household sector will continue to depress consumption spending and will exacerbate the current economic recession.
Thus, the Treasury plan is a disgrace: a bailout of reckless bankers, lenders and investors that provides little direct debt relief to borrowers and financially stressed households and that will come at a very high cost to the US taxpayer. And the plan does nothing to resolve the severe stress in money markets and interbank markets that are now close to a systemic meltdown.
Nouriel Roubini: Conference Call Replay Sep 24, 2008
Nouriel Roubini summarizes the stages that lead us to the current economic and financial situation, and lays out a 10 step proposal to solve this most severe financial crisis.
Download audio file
Nouriel Roubini summarizes the stages that lead us to the current economic and financial situation, and lays out a 10 step proposal to solve this most severe financial crisis.
Download audio file
9/26/2008
Asset Managers: Buy Gold, Commodities
- Investors Business Daily 9/26/2008
Bailout Negotiations in Disarray
- Wall Street Journal 9/26/2008
Public Isn't Buying Wall Street Bailout
- Los Angeles Times 9/26/2008
Economist Says Bailout is Just the Beginning
- Seattle Times 9/26/2008
JP Morgan Buys WaMu
- CNN Money 9/26/2008
Companies Under Pressure
- New York Times 9/26/2008
Credit Enters a Lockdown
- New York Times 9/26/2008
Cali Home Prices Drop Record 41% Amid Defaults
- Bloomberg 9/26/2008
Gas Shortage In South Creates Panic, Long Lines
- Washington Post 9/26/2008
Financial Fears Send Nation's Stress Soaring
- USA Today 9/26/2008
Health Insurance Costs to Spike an Average 8%
- Washington Post
Asset Managers: Buy Gold, Commodities
- Investors Business Daily 9/26/2008
Bailout Negotiations in Disarray
- Wall Street Journal 9/26/2008
Public Isn't Buying Wall Street Bailout
- Los Angeles Times 9/26/2008
Economist Says Bailout is Just the Beginning
- Seattle Times 9/26/2008
JP Morgan Buys WaMu
- CNN Money 9/26/2008
Companies Under Pressure
- New York Times 9/26/2008
Credit Enters a Lockdown
- New York Times 9/26/2008
Cali Home Prices Drop Record 41% Amid Defaults
- Bloomberg 9/26/2008
Gas Shortage In South Creates Panic, Long Lines
- Washington Post 9/26/2008
Financial Fears Send Nation's Stress Soaring
- USA Today 9/26/2008
Health Insurance Costs to Spike an Average 8%
- Washington Post
GDP growth revised down to 2.8%
Economy was weaker than previously thought, held back by less spending by businesses and consumers.
http://www.marketwatch.com/news/story/seco...3-DF3136AFA046}
Economy was weaker than previously thought, held back by less spending by businesses and consumers.
http://www.marketwatch.com/news/story/seco...3-DF3136AFA046}
CREDIT CRISIS
WaMu:
not too
big to fail Largest thrift succumbs to bad mortgages and becomes the biggest-ever U.S. bank failure. J.P. Morgan Chase buys assets, deposits and some liabilities for $1.9 billion.
• Behind the Washington Mutual collapse
• Not as troubling as it seems (24/7 Wall St.)
• Fed acts to ward off interbank collapse
• California home prices face more falls
• S&P: Company defaults head higher
http://www.marketwatch.com/news/story/wamu...E-931513D5763C}
WaMu:
not too
big to fail Largest thrift succumbs to bad mortgages and becomes the biggest-ever U.S. bank failure. J.P. Morgan Chase buys assets, deposits and some liabilities for $1.9 billion.
• Behind the Washington Mutual collapse
• Not as troubling as it seems (24/7 Wall St.)
• Fed acts to ward off interbank collapse
• California home prices face more falls
• S&P: Company defaults head higher
http://www.marketwatch.com/news/story/wamu...E-931513D5763C}
Patrick J. Buchanan : An Amnesty for Stupidity: About one thing we may be sure. The U.S. deficit and national debt are going to soar. The credit rating of the United States, as this nation of non-savers has to borrow abroad to save its banks, and their banks, is going to fall. We are going to be a poorer nation and people.
Regulators seize Washington Mutual and JPMorgan mops up: IN what is by far the largest bank failure in US history, federal regulators seized Washington Mutual and struck a deal to sell the bulk of its operations to JPMorgan Chase
How the Washington Mutual Takeover Will Affect Consumers: The government seized banking giant Washington Mutual last night and then sold some pieces of it to JPMorgan Chase for approximately $1.9 billion. Here is how this will affect former Washington Mutual consumers:
UK banks hold £95bn of sour assets that could qualify for US bailout plan: Britain’s five leading high street banks have as much as £95.3 billion ($175 billion) of distressed assets on their books that may qualify for the American bailout scheme.
Big bailout is unlikely to work: The U.S. "hold-to-maturity" bailout plan is really just the new "mark-to-myth," and even its heroic proportions are not likely to paper over solvency problems in the banking system.
Asia Needs Deal to Prevent Panic Selling of U.S. Debt, Yu Says: Japan, China and other holders of U.S. government debt must quickly reach an agreement to prevent panic sales leading to a global financial collapse, said Yu Yongding, a former adviser to the Chinese central bank.
Bank borrowing from Fed reaches record $188 billion a day: Federal Reserve data showed on Thursday the total amount banks borrowed nearly quadrupled the previous record of $47.97 billion per day notched just the week before.
HSBC to cut 1,100 jobs worldwide: HSBC Holdings PLC, Europe's largest bank by market value, is cutting 1,100 jobs worldwide in the wake of the financial turmoil, a spokesman said Friday.
Regulators seize Washington Mutual and JPMorgan mops up: IN what is by far the largest bank failure in US history, federal regulators seized Washington Mutual and struck a deal to sell the bulk of its operations to JPMorgan Chase
How the Washington Mutual Takeover Will Affect Consumers: The government seized banking giant Washington Mutual last night and then sold some pieces of it to JPMorgan Chase for approximately $1.9 billion. Here is how this will affect former Washington Mutual consumers:
UK banks hold £95bn of sour assets that could qualify for US bailout plan: Britain’s five leading high street banks have as much as £95.3 billion ($175 billion) of distressed assets on their books that may qualify for the American bailout scheme.
Big bailout is unlikely to work: The U.S. "hold-to-maturity" bailout plan is really just the new "mark-to-myth," and even its heroic proportions are not likely to paper over solvency problems in the banking system.
Asia Needs Deal to Prevent Panic Selling of U.S. Debt, Yu Says: Japan, China and other holders of U.S. government debt must quickly reach an agreement to prevent panic sales leading to a global financial collapse, said Yu Yongding, a former adviser to the Chinese central bank.
Bank borrowing from Fed reaches record $188 billion a day: Federal Reserve data showed on Thursday the total amount banks borrowed nearly quadrupled the previous record of $47.97 billion per day notched just the week before.
HSBC to cut 1,100 jobs worldwide: HSBC Holdings PLC, Europe's largest bank by market value, is cutting 1,100 jobs worldwide in the wake of the financial turmoil, a spokesman said Friday.
Out of the Shadows and Into the Harsh Light
- NY Times
- Norris
- 09/27/2008 06:10 AM
- Bloomberg
- 09/26/2008 05:16 AM
- Bloomberg
- 09/26/2008 05:15 AM
- WSJ ($)
- 09/27/2008 06:02 AM
- WSJ ($)
- 09/27/2008 06:02 AM
- NY Times
- 09/27/2008 05:56 AM
- WSJ ($)
- 09/26/2008 05:55 AM
- Bloomberg
- 09/26/2008 05:22 AM
- Bloomberg
- 09/26/2008 05:21 AM
- ABC News
- 09/26/2008 07:57 AM
- Boston Globe
- 09/26/2008 05:44 AM
Lawmakers Get Down to Details of Drafting Bill
- Washington Post
- 09/27/2008 05:59 AM
- Reuters
- 09/27/2008 05:57 AM
- WSJ ($)
- 09/26/2008 06:02 AM
- WSJ ($)
- 09/26/2008 05:48 AM
- NY Times
- 09/27/2008 05:54 AM
- Bloomberg
- 09/26/2008 07:58 AM
- Market Watch from Dow Jones
- 09/26/2008 05:16 AM
- Washington Post
- 09/26/2008 05:39 AM
- FT ($)
- 09/27/2008 06:39 AM
- Washington Post
- 09/26/2008 05:41 AM
Regulator in Chief?
- NY Times
- Lowenstein
- 09/27/2008 06:08 AM
- Economist
- 09/26/2008 05:49 AM
- Economist
- 09/26/2008 05:47 AM
- Washington Post
- 09/26/2008 05:23 AM
- USA Today
- 09/26/2008 05:42 AM
Behind Biggest Insurer’s Crisis, a Blind Eye to a Web of Risk
By GRETCHEN MORGENSON An exploration of A.I.G.’s demise offers insights into the virally connected financial world that began to implode in recent weeks.
Congress Nears Bailout Deal in Intense Push
By DAVID M. HERSZENHORN and CARL HULSE Negotiators said they were on the verge of a deal that would include pay limits for executives and require the government to do more to prevent foreclosures.
Interactive Timeline: Three Weeks of Financial Turmoil
Redemption fears encircle industry
- FT ($)
- 09/29/2008 07:10 PM
- NY Times
- 09/29/2008 04:21 PM
- FT ($)
- 09/29/2008 03:19 PM
- Bloomberg
- 09/29/2008 02:13 PM
- Bloomberg
- 09/29/2008 09:44 AM
- Bloomberg
- 09/29/2008 07:57 AM
- WSJ ($)
- 09/29/2008 05:49 AM
- Reuters
- 09/29/2008 05:34 AM
- Bloomberg
- 09/29/2008 05:28 AM
- Bloomberg
- 09/29/2008 05:27 AM
U.S. Stocks Plunge After House Votes Against Bailout Plan
- Bloomberg
- 09/29/2008 04:18 PM
- Bloomberg
- 09/29/2008 04:37 PM
- Bloomberg
- 09/29/2008 04:41 PM
- Bloomberg
- 09/29/2008 04:35 PM
- Bloomberg
- 09/29/2008 04:20 PM
U.S. House Rejects $700 Billion Financial-Rescue Plan
- Bloomberg
- 09/29/2008 02:13 PM
- Bloomberg
- 09/29/2008 09:44 AM
- WSJ ($)
- 09/29/2008 07:54 PM
- Bloomberg
- 09/29/2008 07:58 AM
- WSJ ($)
- 09/29/2008 05:59 AM
- USA Today
- 09/29/2008 05:58 AM
- Bloomberg
- 09/29/2008 07:50 PM
- AP
- 09/29/2008 04:31 PM
- Crains
- 09/29/2008 05:45 AM
- Reuters
- 09/29/2008 05:44 AM
For Stocks, Worst Single-Day Drop in Two Decades
- NY Times
- 09/29/2008 04:21 PM
- FT ($)
- 09/29/2008 07:10 PM
- FT ($)
- 09/29/2008 03:19 PM
- WSJ ($)
- 09/29/2008 05:49 AM
- Reuters
- 09/29/2008 05:34 AM
- Bloomberg
- 09/29/2008 05:28 AM
- WSJ ($)
- 09/29/2008 08:02 PM
- Bloomberg
- 09/29/2008 04:40 PM
- Business Week
- 09/29/2008 11:02 AM
- Financial Week
- 09/29/2008 08:39 AM
- Market Watch from Dow Jones
- 09/29/2008 08:26 AM
- Bloomberg
- 09/29/2008 06:38 AM
- Washington Post
- 09/29/2008 08:00 AM
- Bloomberg
- 09/29/2008 06:03 AM
European Lenders Get Bailouts as U.S. Crisis Spreads
- Bloomberg
- 09/29/2008 05:27 AM
- Bloomberg
- 09/29/2008 06:35 AM
- WSJ ($)
- 09/29/2008 06:01 AM
- FT
- 09/29/2008 05:56 AM
- AP
- 09/29/2008 05:51 AM
- Bloomberg
- 09/29/2008 05:31 AM
A Crisis Resists the Usual Remedies - Robert Samuelson, Washington Post
In Times of Crisis, Trust Capitalism - Joseph Calhoun, RealClearMarkets
Don't Call It a Bailout. Or a Depression - Irwin Kellner, MarketWatch
As Storm Rages, Only Gov't Can Save Us - Gerard Baker, Times of London
Paulson Plan Is a Rescue of Main Street - Editorial, Wall Street Journal
Rescue Package Is a Pig, Even With Lipstick - Caroline Baum, Bloomberg
The Bailout Plan Is a Wealth Transfer - Editorial, New York Sun
Rescue Might Actually Worsen Things - John Berlau, American Spectator
Daring To Say Loans Made No Sense - David Carr, New York Times
What's Next, A Ban On Stock Sales? - Bill Fleckenstein, MSN Money
Taxpayers Can Benefit From a Bailout - Lawrence Summers, Fncl. Times
The Two Biggest Things We Can Do - Steve Forbes, Forbes
Off The Street
Those Whom The Gods Would Destroy, They First Make Mad - Maverecon
How To Rescue a Bank - Felix Salmon, Market Movers
Are Banks Too Big To Save? - Yves Smith, Naked Capitalism
Citi-Wachovia: a Banking Behemoth Is Born - DealBook
What Was Hank Paulson Thinking? - R. Ehrenberg, Information Arbitrage
On The Financial Crisis, Part II - Becker-Posner Blog
In Times of Crisis, Trust Capitalism - Joseph Calhoun, RealClearMarkets
Don't Call It a Bailout. Or a Depression - Irwin Kellner, MarketWatch
As Storm Rages, Only Gov't Can Save Us - Gerard Baker, Times of London
Paulson Plan Is a Rescue of Main Street - Editorial, Wall Street Journal
Rescue Package Is a Pig, Even With Lipstick - Caroline Baum, Bloomberg
The Bailout Plan Is a Wealth Transfer - Editorial, New York Sun
Rescue Might Actually Worsen Things - John Berlau, American Spectator
Daring To Say Loans Made No Sense - David Carr, New York Times
What's Next, A Ban On Stock Sales? - Bill Fleckenstein, MSN Money
Taxpayers Can Benefit From a Bailout - Lawrence Summers, Fncl. Times
The Two Biggest Things We Can Do - Steve Forbes, Forbes
Off The Street
Those Whom The Gods Would Destroy, They First Make Mad - Maverecon
How To Rescue a Bank - Felix Salmon, Market Movers
Are Banks Too Big To Save? - Yves Smith, Naked Capitalism
Citi-Wachovia: a Banking Behemoth Is Born - DealBook
What Was Hank Paulson Thinking? - R. Ehrenberg, Information Arbitrage
On The Financial Crisis, Part II - Becker-Posner Blog
House Rejects Bailout Proposal 228-205 - C. Hulse & D. Herszenhorn, NYT
What Happens If/When The Bailout Gets Done? - Randall Forsyth, Barron's
Gov't Hand in the Economy Is as Old as the Republic - Robert Shiller, WaPo
Main Street Turns Against Wall Street - Nina Easton, Fortune
You Must Be Able To Read a Balance Sheet - J. Hussman, Hussman Funds
Shorting Financial Stocks Should Resume - Arturo Bris, Wall Street Journal
Magic Ring To Save Us: Accounting Overhaul - Kevin Hassett, Bloomberg
How To Estimate Value of U.S. Mortgage Assets - Daniel Gros, VoxEU
What Happens If/When The Bailout Gets Done? - Randall Forsyth, Barron's
Gov't Hand in the Economy Is as Old as the Republic - Robert Shiller, WaPo
Main Street Turns Against Wall Street - Nina Easton, Fortune
You Must Be Able To Read a Balance Sheet - J. Hussman, Hussman Funds
Shorting Financial Stocks Should Resume - Arturo Bris, Wall Street Journal
Magic Ring To Save Us: Accounting Overhaul - Kevin Hassett, Bloomberg
How To Estimate Value of U.S. Mortgage Assets - Daniel Gros, VoxEU
U.S. sell-off spreads to Asia 
Japan, South Korea and Australia plummet in early trading as investors react to record U.S. losses, U.S. House rejection of financial-sector bailout, European declines.
• Hong Kong stocks plunge in early trading
• Australian PM calls for pressure on U.S. to pass bailout plan
• U.K. disappointed in U.S. bailout vote
• For business news in Chinese, see Chinese.wsj.com
Japan, South Korea and Australia plummet in early trading as investors react to record U.S. losses, U.S. House rejection of financial-sector bailout, European declines.• Hong Kong stocks plunge in early trading
• Australian PM calls for pressure on U.S. to pass bailout plan
• U.K. disappointed in U.S. bailout vote
• For business news in Chinese, see Chinese.wsj.com
Wachovia failure posed 'systemic risk': Paulson
Company's banking operations are to be bought by Citigroup for a knockdown price of $2.16 billion in stock, regulators say.
Goldman reportedly seeks to buy bank assets
Move's designed to support push into commercial banking.
• Congress takes a hard look at marking-to-market
• Freddie, Fannie subpoenaed over accounting
• Lehman getting $2 billion for Neuberger wealth-management unit
• Central banks up heat | Treasury steps up to bolster money markets
• Navigating Wall Street's newly altered landscape
• Hedge-fund redemptions loom | Primary Fund to liquidate
Company's banking operations are to be bought by Citigroup for a knockdown price of $2.16 billion in stock, regulators say.
Goldman reportedly seeks to buy bank assets
Move's designed to support push into commercial banking.
• Congress takes a hard look at marking-to-market
• Freddie, Fannie subpoenaed over accounting
• Lehman getting $2 billion for Neuberger wealth-management unit
• Central banks up heat | Treasury steps up to bolster money markets
• Navigating Wall Street's newly altered landscape
• Hedge-fund redemptions loom | Primary Fund to liquidate
Dow takes historic dive as bailout fails
Finger-pointing begins after bailout bill fails
Morgan reveals stats on Mitsubishi deal
Fed funnels billions into global marketsGovernments buy large stake in ailing Fortis
Citigroup buys Wachovia's banking unit
Lehman sells off Neuberger
Freddie and Fannie subpoenaed
Finger-pointing begins after bailout bill fails
Morgan reveals stats on Mitsubishi deal
Fed funnels billions into global marketsGovernments buy large stake in ailing Fortis
Citigroup buys Wachovia's banking unit
Lehman sells off Neuberger
Freddie and Fannie subpoenaed
Five UK banks may qualify for US bailout package': "Britain's five leading high street banks have as much as 95.3 billion pounds (USD 175 billion) of distressed assets on their books that may qualify for the American bailout scheme," The Times reported.
Dow falls 700: Blue chips off as much as 700 points at Monday low, Nasdaq off 6%: Stocks sell off as Wall Street begins to throw in towel on bailout
Fed Pumps Further $630 Billion Into Financial System: The Fed increased its existing currency swaps with foreign central banks by $330 billion to $620 billion to make more dollars available worldwide. The Term Auction Facility, the Fed's emergency loan program, will expand by $300 billion to $450 billion. The European Central Bank, the Bank of England and the Bank of Japan are among the participating authorities.
Bank bailouts : U.S. Stock-Index Futures Retreat; Citigroup, Wachovia Slump: Investor Marc Faber, who predicted the 1987 ``Black Monday'' crash, said last week the rescue package may require as much as $5 trillion.
U.S. stocks hammered as Fed adds more liquidity: U.S. stocks plunged Monday as the global credit crisis spread, with four bailouts in Europe and the takeover of Wachovia Corp. in the U.S. roiling securities, commodities and currencies markets and forcing major central banks to pump hundreds of billions of dollars more into the financial system.
Protests on Wall Street - what the news media isn't showing you?: Hundreds of protestors demonstrated agains the proposed $700 Billion bail out plan for the finance and banking industry, yet the national news media in America didn't even report it! Why not
Tories 'bankrolled by the City wolves' who made a killing from financial crash: Party leader David Cameron has apparently accepted almost £2million from the wealthy financiers who are members of his exclusive 'Leader's Group' dining club.
Who is Henry Paulson?: According to the International Herald Tribune, Paulson “was one of the first Wall Street leaders to recognize how drastically investment banks could enhance their profitability by betting with their own capital instead of acting as mere intermediaries.” Paulson “stubbornly assert[ed] Goldman’s right to invest in, advise on and finance deals, regardless of potential conflicts.”
Dow falls 700: Blue chips off as much as 700 points at Monday low, Nasdaq off 6%: Stocks sell off as Wall Street begins to throw in towel on bailout
Fed Pumps Further $630 Billion Into Financial System: The Fed increased its existing currency swaps with foreign central banks by $330 billion to $620 billion to make more dollars available worldwide. The Term Auction Facility, the Fed's emergency loan program, will expand by $300 billion to $450 billion. The European Central Bank, the Bank of England and the Bank of Japan are among the participating authorities.
Bank bailouts : U.S. Stock-Index Futures Retreat; Citigroup, Wachovia Slump: Investor Marc Faber, who predicted the 1987 ``Black Monday'' crash, said last week the rescue package may require as much as $5 trillion.
U.S. stocks hammered as Fed adds more liquidity: U.S. stocks plunged Monday as the global credit crisis spread, with four bailouts in Europe and the takeover of Wachovia Corp. in the U.S. roiling securities, commodities and currencies markets and forcing major central banks to pump hundreds of billions of dollars more into the financial system.
Protests on Wall Street - what the news media isn't showing you?: Hundreds of protestors demonstrated agains the proposed $700 Billion bail out plan for the finance and banking industry, yet the national news media in America didn't even report it! Why not
Tories 'bankrolled by the City wolves' who made a killing from financial crash: Party leader David Cameron has apparently accepted almost £2million from the wealthy financiers who are members of his exclusive 'Leader's Group' dining club.
Who is Henry Paulson?: According to the International Herald Tribune, Paulson “was one of the first Wall Street leaders to recognize how drastically investment banks could enhance their profitability by betting with their own capital instead of acting as mere intermediaries.” Paulson “stubbornly assert[ed] Goldman’s right to invest in, advise on and finance deals, regardless of potential conflicts.”
Top Stories
Stocks Stage Partial Rebound After Steep Sell-Off- APStocks staged a partial rebound early Tuesday after their biggest sell-off in years, though financial markets remained troubled a day after lawmakers rejected a $700 billion rescue plan for the financial sector. A key rate that banks charge to lend to one another shot higher, a tightening of the availability of credit that could spill through the economy.
- Candidates, Bush urge reviving financial bailout- AP
- S&P: Home prices post 16 pct annual drop in July- AP
- Consumer confidence makes slight gains- CNNMoney.com
- European stocks volatile after bailout rejection- AP
- Dexia bank gets $9.2 billion bailout- AP
- Asia urges action on US bailout as shares plunge- AP
- Bailout bill defeat could cause painful recession- AP
- Oil swings widely following US bailout rejection- AP
- The American Public Fights Back- Tech Ticker
Double-Edge Sword of Muni Funds- TheStreet.comThis is an insanely difficult time for investors, average Americans, and even the international community. Is it time to consider municipal bonds?
More Features
More Features
Market Outlook
- Speculating on the Future on Sep 30, 2008 | by James Picerno | about QQQQ, DIA, SPY
- The Main Street - Wall Street Bout, Round Two on Sep 30, 2008 | by Kathy Lien | about C, BAC, JPM
- Searching for Support Levels on Sep 30, 2008 | by Tate Dwinnell | about QQQQ, DIA, SPY
- Congress One-Ups Prediction Market on Sep 30, 2008 | by Bespoke Investment Group
- The Credit Hostage Crisis on Sep 30, 2008 | by Dr. Duru | about QQQQ, DIA, SPY
- Shopping During Armageddon on Sep 30, 2008 | by Todd Sullivan | about DOW, GE
- September Madness, Market Edition on Sep 30, 2008 | by Michael Arrington
More articles on The Economy »
The Dollar
The Dollar
- Dollar Goes Down Along with Bailout Plan on Sep 29, 2008 | by Kathy Lien | about GLD, JYN, UDN
- No Dead-Bank Bounce; Pound Sharply Lower on Sep 29, 2008 | by Grace Cheng | about GBB
- Market Safe Havens Rapidly Dwindling on Sep 29, 2008 | by Graham Summers | about DIA, FXY, FXF
- Is the Dollar Becoming Less Global? on Sep 29, 2008 | by Tim Iacono | about UUP, UDN
- Global Financial Woes and the Forex Domino Effect on Sep 29, 2008 | by Kathy Lien | about ERO, GBB, JYN
- Rescuing the U.S. Dollar on Sep 29, 2008 | by Joseph Trevisani | about EWU, FXB, EWQ
- Bye, Bye U.S. Dollar on Sep 29, 2008 | by David Bailey | about UUP, UDN
Dow Soars 400, Key Rate Up- APWall Street snapped back Tuesday after its biggest sell-off in years amid growing expectations that lawmakers will salvage a $700 billion rescue plan for the financial sector. But the seized-up credit markets where businesses turn to raise money showed no sign of relief.
- Lawmakers scramble to revise bailout bill- AP
- Banks in miser mode send borrowing rates soaring- AP
- Consumer confidence makes slight gains- CNNMoney.com
- S&P: Home prices plunge by record 16 percent in July- AP
- Oil prices top $100 after huge sell-off- AP
- U.S. dollar rallies against major currencies- CNNMoney.com
- Lawmaker urges SEC to halt market volatility- AP
- Goodbye $1 Billion Salary, Hello Campbell Soup- Tech Ticker
- Jolted Congress Will Pass Bill, But Confidence Destroyed- Tech Ticker
House GOP Members Forging Alternative Bailout Plan
IBD: Should Congress Be 'Perp-Walked'?
Sen. Chris Dodd took millions from now-failing finance firms he oversees
‘Mark-to-Market Isn’t to Blame
‘No recourse’ and ‘put options’: Estimating the ‘fair value’ of US mortgage assets
Among Bailout Supporters, Wall St. Donations Ran High
Fannie, Freddie Probes Widen as SEC Seeks Documents
SEC, FASB Said to Issue Guidance on Fair-Value Accounting Rules
Moody's on Housing: No Bottom until 2010?
Just 26% Have Confidence That Lawmakers Know What They’re Doing in Economic Crisis
TEXT: Bush's 8:45AM Address
MoveOn Video Ad Against McCain and the Bailout
Michael Moore: Congratulations, Corporate Crime Fighters! Coup Averted for Three Days!
Morgenthau: Too Much Money Is Beyond Legal Reach
WSJ: Loose Money And the Roots Of the Crisis
IBD: Should Congress Be 'Perp-Walked'?
Sen. Chris Dodd took millions from now-failing finance firms he oversees
‘Mark-to-Market Isn’t to Blame
‘No recourse’ and ‘put options’: Estimating the ‘fair value’ of US mortgage assets
Among Bailout Supporters, Wall St. Donations Ran High
Fannie, Freddie Probes Widen as SEC Seeks Documents
SEC, FASB Said to Issue Guidance on Fair-Value Accounting Rules
Moody's on Housing: No Bottom until 2010?
Just 26% Have Confidence That Lawmakers Know What They’re Doing in Economic Crisis
TEXT: Bush's 8:45AM Address
MoveOn Video Ad Against McCain and the Bailout
Michael Moore: Congratulations, Corporate Crime Fighters! Coup Averted for Three Days!
Morgenthau: Too Much Money Is Beyond Legal Reach
WSJ: Loose Money And the Roots Of the Crisis
U.S. September Job Cuts Rise 33% From Year Ago, Challenger Says
- Bloomberg
- 10/01/2008 07:19 AM
- Washington Post
- 10/01/2008 05:26 AM
- NY Times
- 10/01/2008 05:12 AM
- Bloomberg
- 10/01/2008 05:00 AM
SEC moves away from mark to market
- Financial Week
- 10/01/2008 08:41 AM
- FT ($)
- Blas
- 10/01/2008 05:38 AM
- NY Times
- 10/01/2008 05:17 AM
- NY Times
- Norris
- 10/01/2008 05:16 AM
- FT ($)
- 09/30/2008 09:42 PM
- N.Y. Post
- 10/01/2008 05:46 AM
- Financial News
- 10/01/2008 05:30 AM
- Bloomberg
- 10/01/2008 05:25 AM
- Chicago Tribune
- 10/01/2008 05:19 AM
- Fortune
- 10/01/2008 05:00 AM
- WSJ ($)
- 09/30/2008 09:19 PM
- WSJ ($)
- 09/30/2008 09:10 PM
- WSJ ($)
- 09/30/2008 09:08 PM
- WSJ ($)
- 09/30/2008 09:07 PM
- Forbes
- 10/01/2008 05:29 AM
- FT ($)
- 09/30/2008 09:24 PM
- FT
- 09/30/2008 08:28 PM
U.S. September Job Cuts Rise 33% From Year Ago, Challenger Says
- Bloomberg
- 10/01/2008 07:19 AM
- Washington Post
- 10/01/2008 05:26 AM
- NY Times
- 10/01/2008 05:12 AM
- Bloomberg
- 10/01/2008 05:00 AM
- CFO.com
- 10/01/2008 08:42 AM
- Market Watch from Dow Jones
- 10/01/2008 06:29 AM
- NY Times
- 10/01/2008 05:14 AM
- WSJ ($)
- 09/30/2008 09:09 PM
- Market Watch from Dow Jones
- 10/01/2008 07:50 AM
- USA Today
- 10/01/2008 05:42 AM
- Washington Post
- 10/01/2008 05:28 AM
- Bloomberg
- 10/01/2008 05:24 AM
- NY Times
- 10/01/2008 05:18 AM
- Bloomberg
- 10/01/2008 05:02 AM
- Bloomberg
- 10/01/2008 05:02 AM
Banks park money in European central banks
- FT
- 10/01/2008 07:55 AM
- UKTimes
- 10/01/2008 05:51 AM
- NY Times
- Landler
- 10/01/2008 05:17 AM
- Bloomberg
- 09/30/2008 08:28 PM
- UK Times
- 10/01/2008 06:24 AM
- IHT
- 10/01/2008 05:45 AM
- AFP
- 10/01/2008 05:19 AM
- FT ($)
- 09/30/2008 09:21 PM
- IHT
- 10/01/2008 05:44 AM
- Bloomberg
- 10/01/2008 05:11 AM
Stocks Extend Declines After Manufacturing Report- APStocks are extending their declines as a weaker-than-expected reading on the manufacturing sector is fanning Wall Street's worries about the health of the economy. The report from the Institute for Supply Management reveals a troubling drop in new orders. The news is raising concerns about the economy while investors await a possible Senate vote on the financial bailout package.
- Hoyer, Blunt hopeful of progress on rescue bill- AP
- Manufacturing index drops by most since 1984- CNNMoney.com
- Oil slides below $99 on fears of falling demand- AP
- Euro jobless rate climbs to 7.5 percent in August- AP
- Xstrata drops $10 billion bid for platinum miner Lonmin- AP
- A dozen more Chinese dairy companies accused- AP
- Mortgage applications plunged 23% last week- CNNMoney.com
- Johnson & Johnson wins $1.2 billion in patent dispute- AP
- 'Better Than Armageddon': $700B Bailout Beats the Alternatives- Tech Ticker
10/1/2008
Dancing at the Volcano's Edge
- UK Guardian 10/1/2008
Wall Street's Stock has Dropped in World's Eyes
- USA Today 10/1/2008
Congress Decides it is Worth Risking Depression
- Financial Times 10/1/2008
Cash-Starved Co's. Scrap Dividends, Tap Credit
- Bloomberg 10/1/2008
Bonds Have Worst Mo. Since '80; Lehman, WaMu Fail
- Bloomberg 10/1/2008
Mortgage Applications Fell 23% Last Week
- MarketWatch 10/1/2008
Entrepreneurs Struggle to Hang On Across the USA
- USA Today 10/1/2008
More Car Dealerships Forced to Close
- Chicago Tribune 10/1/2008
Tighter Credit Only Adds to Auto Ind's Troubles
- New York Times 10/1/2008
Alabama County Misses Bond Payment
- Bloomberg 10/1/2008
State, Local Tax Revenue Stagnates
- Wall Street Journal 10/1/2008
Under Strain, Cities Are Cutting Back Projects
- New York Times
Dancing at the Volcano's Edge
- UK Guardian 10/1/2008
Wall Street's Stock has Dropped in World's Eyes
- USA Today 10/1/2008
Congress Decides it is Worth Risking Depression
- Financial Times 10/1/2008
Cash-Starved Co's. Scrap Dividends, Tap Credit
- Bloomberg 10/1/2008
Bonds Have Worst Mo. Since '80; Lehman, WaMu Fail
- Bloomberg 10/1/2008
Mortgage Applications Fell 23% Last Week
- MarketWatch 10/1/2008
Entrepreneurs Struggle to Hang On Across the USA
- USA Today 10/1/2008
More Car Dealerships Forced to Close
- Chicago Tribune 10/1/2008
Tighter Credit Only Adds to Auto Ind's Troubles
- New York Times 10/1/2008
Alabama County Misses Bond Payment
- Bloomberg 10/1/2008
State, Local Tax Revenue Stagnates
- Wall Street Journal 10/1/2008
Under Strain, Cities Are Cutting Back Projects
- New York Times
Why propping up banks will not rescue a debauched financial system
Ford sales plunge 35% New Factories mired in recession levels, jobs weak
Paulson Rescue Proposal Is `Crazy,' Predecessor O'Neill Says
Banking crash hits Europe as ECB loses traction
U.S. Heading for Slump, With or Without Bailout
Home prices plunge record 16.3 percent in July
Senate Votes Of Bailout (Theft) Today - CALL!
Stop The Senate From Voting Bailout
US Auto Sales Dive Amid Credit Fears
Western World To Become Less Wealthy
Credit Markets Frozen As Banks Hoard Cash
Greenspan - Gold Is 'The Ultimate Form Of Payment'
The Political Nature Of The Credit Crisis
Banks Park Money In Euro Central Banks
Good Day For Democracy
Why Propping Up Banks Will Not Work
IMF Pressures Congress To Approve 'Bailout' Scam
Time/CNN - Let Risk-Taking Financial Inst Fail
Magnitude & Meaning Of The Proposed Bailout
With Idiot Congress Away, Down Closes Up 485
Bush Says Congress MUST Act, Barky & McCain Echo
Bailout Monster - 'I Will Be Back'
Stock Market Crash Is Inevitable
Fed Fights To Keep Dead Banks Alive
Panic Grips World Markets
Fears That More UK banks Could Fall
The Bailout Battle Continues - What's Next?
Stop The Senate From Voting Bailout
US Auto Sales Dive Amid Credit Fears
Western World To Become Less Wealthy
Credit Markets Frozen As Banks Hoard Cash
Greenspan - Gold Is 'The Ultimate Form Of Payment'
The Political Nature Of The Credit Crisis
Banks Park Money In Euro Central Banks
Good Day For Democracy
Why Propping Up Banks Will Not Work
IMF Pressures Congress To Approve 'Bailout' Scam
Time/CNN - Let Risk-Taking Financial Inst Fail
Magnitude & Meaning Of The Proposed Bailout
With Idiot Congress Away, Down Closes Up 485
Bush Says Congress MUST Act, Barky & McCain Echo
Bailout Monster - 'I Will Be Back'
Stock Market Crash Is Inevitable
Fed Fights To Keep Dead Banks Alive
Panic Grips World Markets
Fears That More UK banks Could Fall
The Bailout Battle Continues - What's Next?
Optimism rises with Senate tally tonight
Bill to revive U.S. financial sector is similar to version House rejected but includes higher FDIC insurance cap as well as new tax breaks.
• Why voting against bailout package still makes sense (First Take)
• SEC, FASB aid financials but stop short of 'mark to market' ban
• Bailout mindset evolves | ECB's Trichet confident plan will pass
Bill to revive U.S. financial sector is similar to version House rejected but includes higher FDIC insurance cap as well as new tax breaks.
• Why voting against bailout package still makes sense (First Take)
• SEC, FASB aid financials but stop short of 'mark to market' ban
• Bailout mindset evolves | ECB's Trichet confident plan will pass
http://www.marketwatch.com/news/story/resc...3-F09E834029CA}
Rescue plan appears headed for passage in Senate
McCain and Obama voice support; House action seen Friday
By Greg Robb & Robert Schroeder, MarketWatch
WASHINGTON (MarketWatch) -- President Bush and lawmakers expressed optimism about the passage of a revised $700 billion rescue plan for the financial markets ahead of a scheduled vote Wednesday night in the Senate, just two days after the plan went down in flames in the House of Representatives and with stock markets on edge.
"I'm confident it'll pass," Bush said in brief comments at the White House. "It's very important for members to take this bill very seriously."
Financial bailout 2008
Capitol Hill to the rescue
A massive plan to bail out the faltering U.S. financial system is being considered by Congress. Officially called the Emergency Economic Stabilization Act of 2008, here are the bill's major actions:
• Authorizes Treasury Secretary to buy $700 billion of troubled assets from financial companies.
• Increases deposit insurance at banks to $250,000 from $100,000.
• Limits executive pay and "golden parachutes" at participating firms.
• Requires government agencies to modify troubled mortgages.
• Includes tax relief measures and tax credits for business.
Senators from both sides of the aisle also predicted passage in their chamber of the rescue plan, which now includes an increase in the FDIC's deposit-insurance ceiling and tax breaks for businesses.
"The Senate will pass it overwhelmingly tonight," said Sen. Bob Corker, a Tennessee Republican who sits on the Senate Banking Committee. Sen. Charles Schumer, D-N.Y., also said that there is good support for the bill.
Votes are slated to begin at 7:30 p.m. Eastern in the Senate. Sens. Barack Obama and John McCain plan to return to Washington from the presidential campaign trail to vote for the measure.
House Majority Leader Steny Hoyer said the House leadership will likely bring the bill to the floor on Friday if there is bipartisan support for it in the Senate on Wednesday night. The defeat of the measure in the House on Monday touched off a 777-point drop in the Dow Jones Industrial Average.
'The bill has continued to get better from our standpoint.'
— Kevin Smith, spokesman for House Republican Leader John Boehner
"We think we'll have a better shot at passing this bill than we did on Monday," said Kevin Smith, a spokesman for House Republican Leader John Boehner. "The bill has continued to get better from our standpoint."
Stocks traded lower Wednesday as investors remained wary about whether the package will make it through Congress.
The revamped Senate bill sticks to the core plan developed by Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke to have the government buy and hold toxic mortgage assets, freeing up funds for banks to begin lending again. It gives Paulson the $700 billion in phases, with $250 billion up front, then $100 billion pending presidential approval and another $350 billion pending congressional approval.
FDIC limit
The most sweeping change is language to raise the limit for insured bank deposits sought by the Federal Deposit Insurance Corp., which asked to raise the cap temporarily to $250,000 from $100,000. This is designed to attract votes of some members of Congress who said that little was being done for Main Street.
Regional banks had lobbied hard for increasing the deposit-insurance limit, as they said that the government-backed sales of Washington Mutual Inc. had given consumers the impression that bigger banks were a safer place to hold their savings.
Separately, the bill also temporarily would allow the FDIC
to borrow unlimited amounts of money from the Treasury, up from the current limit of $30 billion. The unlimited borrowing ability would expire in 2009.
Executive pay would also be limited in some cases under the bill, as would "golden parachutes" for some corporate chiefs. Government agencies would also be required to modify some troubled mortgages as part of the legislation.
On Wednesday morning, groups representing large and small businesses and retired persons urged the Senate and House to approve the legislation and kick-start the flow of credit. Leaders of the Business Roundtable, the National Federation of Independent Business and the AARP said that businesses and retirement savings are at risk without passage of the rescue package.
"We need action now to protect jobs and homes and retirements," commented Bill Novelli, the AARP's chief executive. "People are calling in great fear because their 401(k)s are basically disappearing."
Todd Stottlemyer, the president and chief executive of the NFIB, said the increased limit for deposits would give small businesses greater confidence that their assets are secure. The bill also includes tax relief such as an extension of the fix for the alternative minimum tax and extensions of R&D credits.
Meanwhile, economists stressed that the measure shouldn't be regarded as a panacea and are expecting a sharp slowdown in the coming months.
"The mortgage-finance rescue package won't be an instant cure-all for the economy, but it is the first government step that attempts to address the root causes of the mess," said Lou Crandall, chief economist at Wrightson-ICAP.
"At a minimum, however, the package improves the odds that the economy can begin to heal itself," he wrote to clients.
Greg Robb is a senior reporter for MarketWatch in Washington.
Robert Schroeder is a reporter for MarketWatch in Washington.
Rescue plan appears headed for passage in Senate
McCain and Obama voice support; House action seen Friday
By Greg Robb & Robert Schroeder, MarketWatch
WASHINGTON (MarketWatch) -- President Bush and lawmakers expressed optimism about the passage of a revised $700 billion rescue plan for the financial markets ahead of a scheduled vote Wednesday night in the Senate, just two days after the plan went down in flames in the House of Representatives and with stock markets on edge.
"I'm confident it'll pass," Bush said in brief comments at the White House. "It's very important for members to take this bill very seriously."
Financial bailout 2008
Capitol Hill to the rescue
A massive plan to bail out the faltering U.S. financial system is being considered by Congress. Officially called the Emergency Economic Stabilization Act of 2008, here are the bill's major actions:
• Authorizes Treasury Secretary to buy $700 billion of troubled assets from financial companies.
• Increases deposit insurance at banks to $250,000 from $100,000.
• Limits executive pay and "golden parachutes" at participating firms.
• Requires government agencies to modify troubled mortgages.
• Includes tax relief measures and tax credits for business.
Senators from both sides of the aisle also predicted passage in their chamber of the rescue plan, which now includes an increase in the FDIC's deposit-insurance ceiling and tax breaks for businesses.
"The Senate will pass it overwhelmingly tonight," said Sen. Bob Corker, a Tennessee Republican who sits on the Senate Banking Committee. Sen. Charles Schumer, D-N.Y., also said that there is good support for the bill.
Votes are slated to begin at 7:30 p.m. Eastern in the Senate. Sens. Barack Obama and John McCain plan to return to Washington from the presidential campaign trail to vote for the measure.
House Majority Leader Steny Hoyer said the House leadership will likely bring the bill to the floor on Friday if there is bipartisan support for it in the Senate on Wednesday night. The defeat of the measure in the House on Monday touched off a 777-point drop in the Dow Jones Industrial Average.
'The bill has continued to get better from our standpoint.'
— Kevin Smith, spokesman for House Republican Leader John Boehner
"We think we'll have a better shot at passing this bill than we did on Monday," said Kevin Smith, a spokesman for House Republican Leader John Boehner. "The bill has continued to get better from our standpoint."
Stocks traded lower Wednesday as investors remained wary about whether the package will make it through Congress.
The revamped Senate bill sticks to the core plan developed by Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke to have the government buy and hold toxic mortgage assets, freeing up funds for banks to begin lending again. It gives Paulson the $700 billion in phases, with $250 billion up front, then $100 billion pending presidential approval and another $350 billion pending congressional approval.
FDIC limit
The most sweeping change is language to raise the limit for insured bank deposits sought by the Federal Deposit Insurance Corp., which asked to raise the cap temporarily to $250,000 from $100,000. This is designed to attract votes of some members of Congress who said that little was being done for Main Street.
Regional banks had lobbied hard for increasing the deposit-insurance limit, as they said that the government-backed sales of Washington Mutual Inc. had given consumers the impression that bigger banks were a safer place to hold their savings.
Separately, the bill also temporarily would allow the FDIC
to borrow unlimited amounts of money from the Treasury, up from the current limit of $30 billion. The unlimited borrowing ability would expire in 2009.
Executive pay would also be limited in some cases under the bill, as would "golden parachutes" for some corporate chiefs. Government agencies would also be required to modify some troubled mortgages as part of the legislation.
On Wednesday morning, groups representing large and small businesses and retired persons urged the Senate and House to approve the legislation and kick-start the flow of credit. Leaders of the Business Roundtable, the National Federation of Independent Business and the AARP said that businesses and retirement savings are at risk without passage of the rescue package.
"We need action now to protect jobs and homes and retirements," commented Bill Novelli, the AARP's chief executive. "People are calling in great fear because their 401(k)s are basically disappearing."
Todd Stottlemyer, the president and chief executive of the NFIB, said the increased limit for deposits would give small businesses greater confidence that their assets are secure. The bill also includes tax relief such as an extension of the fix for the alternative minimum tax and extensions of R&D credits.
Meanwhile, economists stressed that the measure shouldn't be regarded as a panacea and are expecting a sharp slowdown in the coming months.
"The mortgage-finance rescue package won't be an instant cure-all for the economy, but it is the first government step that attempts to address the root causes of the mess," said Lou Crandall, chief economist at Wrightson-ICAP.
"At a minimum, however, the package improves the odds that the economy can begin to heal itself," he wrote to clients.
Greg Robb is a senior reporter for MarketWatch in Washington.
Robert Schroeder is a reporter for MarketWatch in Washington.
WSJ: Mark to Mayhem? What would happen if we changed the rules? Let's find out.
Bill v. Barack on Banks; Clinton instructs Obama on finance and Phil Gramm.
Money Markets Still Frozen, Rates Soar
House GOP Members Forging Alternative Bailout Plan
IBD: Should Congress Be 'Perp-Walked'?
Sen. Chris Dodd took millions from now-failing finance firms he oversees
‘Mark-to-Market Isn’t to Blame
‘No recourse’ and ‘put options’: Estimating the ‘fair value’ of US mortgage assets
Among Bailout Supporters, Wall St. Donations Ran High
Fannie, Freddie Probes Widen as SEC Seeks Documents
SEC, FASB Said to Issue Guidance on Fair-Value Accounting Rules
Moody's on Housing: No Bottom until 2010?
Just 26% Have Confidence That Lawmakers Know What They’re Doing in Economic Crisis
TEXT: Bush's 8:45AM Address
MoveOn Video Ad Against McCain and the Bailout
Bill v. Barack on Banks; Clinton instructs Obama on finance and Phil Gramm.
Money Markets Still Frozen, Rates Soar
House GOP Members Forging Alternative Bailout Plan
IBD: Should Congress Be 'Perp-Walked'?
Sen. Chris Dodd took millions from now-failing finance firms he oversees
‘Mark-to-Market Isn’t to Blame
‘No recourse’ and ‘put options’: Estimating the ‘fair value’ of US mortgage assets
Among Bailout Supporters, Wall St. Donations Ran High
Fannie, Freddie Probes Widen as SEC Seeks Documents
SEC, FASB Said to Issue Guidance on Fair-Value Accounting Rules
Moody's on Housing: No Bottom until 2010?
Just 26% Have Confidence That Lawmakers Know What They’re Doing in Economic Crisis
TEXT: Bush's 8:45AM Address
MoveOn Video Ad Against McCain and the Bailout
10/1/2008
U.S. Senate Approves $700 Billion Financial-Rescue
- Bloomberg 10/1/2008
Dancing at the Volcano's Edge
- UK Guardian 10/1/2008
Wall Street's Stock has Dropped in World's Eyes
- USA Today 10/1/2008
Congress Decides it is Worth Risking Depression
- Financial Times 10/1/2008
Cash-Starved Co's. Scrap Dividends, Tap Credit
- Bloomberg 10/1/2008
Bonds Have Worst Mo. Since '80; Lehman, WaMu Fail
- Bloomberg 10/1/2008
Mortgage Applications Fell 23% Last Week
- MarketWatch 10/1/2008
Entrepreneurs Struggle to Hang On Across the USA
- USA Today 10/1/2008
More Car Dealerships Forced to Close
- Chicago Tribune 10/1/2008
Tighter Credit Only Adds to Auto Ind's Troubles
- New York Times 10/1/2008
Alabama County Misses Bond Payment
- Bloomberg 10/1/2008
State, Local Tax Revenue Stagnates
- Wall Street Journal 10/1/2008
Under Strain, Cities Are Cutting Back Projects
- New York Times
U.S. Senate Approves $700 Billion Financial-Rescue
- Bloomberg 10/1/2008
Dancing at the Volcano's Edge
- UK Guardian 10/1/2008
Wall Street's Stock has Dropped in World's Eyes
- USA Today 10/1/2008
Congress Decides it is Worth Risking Depression
- Financial Times 10/1/2008
Cash-Starved Co's. Scrap Dividends, Tap Credit
- Bloomberg 10/1/2008
Bonds Have Worst Mo. Since '80; Lehman, WaMu Fail
- Bloomberg 10/1/2008
Mortgage Applications Fell 23% Last Week
- MarketWatch 10/1/2008
Entrepreneurs Struggle to Hang On Across the USA
- USA Today 10/1/2008
More Car Dealerships Forced to Close
- Chicago Tribune 10/1/2008
Tighter Credit Only Adds to Auto Ind's Troubles
- New York Times 10/1/2008
Alabama County Misses Bond Payment
- Bloomberg 10/1/2008
State, Local Tax Revenue Stagnates
- Wall Street Journal 10/1/2008
Under Strain, Cities Are Cutting Back Projects
- New York Times
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