Bloodless Coup

Under the plan:

- Paulson et all et $250B right away
- They get another $100B if and when the president requests it (i.e. they get it whenever they want it)
- They get the remaining $350B when they request it UNLESS Congress passes a resolution blocking it, which the bill permits Congress to do if they wish.

The increasingly invaluable Henry Blodget has the best summary of this bill I've seen so far today. Check it out for the full picture.

Ah so the status quo, or reversion point, when gaming this out is that it's $700 billion unless Congress chooses to act. Thanks for clearing that up.

Ummm, it looks like this is going to fail unless several people who've already voted switch their votes.

Uh-oh - it just failed with 228 votes against. How far can things fall in the markets before the end of the day?

Too bad we don't have any shorts jumping in to cover and act as a brake on all these financial stocks that are tanking, eh?

Badly played, all around. Let's see what can be salvaged now.

(Armand, the answer to your question is probably something like 8-10%, but it probably won't go that far. Of course, tomorrow is another day.)

How area reps voted: Doyle, Mollohan, Murtha and Rahall aye; Jason Altmire, Ms. Capito and Tim Murphy no.

Dow looks like it ended down about 600 points (about 5% to 6% down?). More interesting: annualized yield on a 3-month T-bill was 4/10th of 1%. Not negative, but very, very low. Some scared people out there. As I sit here, they rang the closing bell on the Dow. Board said -596; as they tallied the trades at the end, the Dow has fallen to -667. Lots of people bailing out overnight.

I don't see how you can do anything but blame the House Republicans for this. They've been drinking their special brand of Cool-Aid for years (put us back on the gold standard? eliminate the Fed?), and it's finally come home to roost. I fully believe that they voted what their constituents wanted, but (A) they've been telling their constituents some silly things for years and the people just believed what they said, and (B) it's a representative democracy, which means that sometimes the representatives have to vote what is right, not what the people want.

Final numbers on the Dow seem to be about -689, but they might still adjust it.

Late Update: Still adjusting. Down to -735.

Later Late Update: Down to -777 for a one day drop. The talking heads are saying that's a 7% drop; S&P500 down 8.75% (4th largest in S&P500 history).

. . . and Nasdaq down almost 10%.

And no prospect of legislative action until Wednesday night. So do they shut the market down tomorrow? Can Bush call an emergency session, and force them to sit through the holiday? If he can, he probably should.

Traders I've talked to are looking for support around 950-975 for the S&P 500, which is another 15% or so down from here. Tomorrow could be really bad (or, depending on what happens between now and 9:30 ET tomorrow morning, it could be good. History is moving very quickly right now.)

I don't think tomorrow will be good. House has adjourned until Thursday (a religious holiday). Senate could pass a bill (irrelevant if the House Republican leadership can't deliver the votes); they could announce another deal (irrelevant if the House leadership can't deliver the votes). In short, I don't think I would believe anything anyone says (including the House Republican leadership) and would want to see them actually vote something out. That can't happen until Thursday, at the earliest.

I don't have time to look up the constitutional authority that Wikipedia can't be bothered to site, but all-knowing wikipedia nonetheless opines, "Either house or both houses may be called into emergency session by the President."

This is Bush's plan, and this is a disaster. He should call them back. God will understand.

And about this: "The Republican House leadership blamed Pelosi, saying she gave a partisan speech before the vote that alienated House Republicans."

So then the Dems shouldn't have voted Yea for anything likely to incur a Presidential signing statement, because it would likely be too partisan? Seriously? You're voting on a bill; no one on the planet's going to remember who said what. And anyway, that's one of the privileges of being in the majority, as any honest Republican will recall speeches no less partisan from similar settings in the past, where votes nonetheless went down even in the absence of an historic emergency.

This is just irresponsible. The GOP is refusing to provide the bipartisan cover that the parties have always given each other in the past, trying to burden the Dems with responsibility for this precipitous action as a hedge against the plan's failure, and in so doing has destroyed what little credibiilty it had left.

So this is what it comes down to: incumbent Republicans in close races slithering away from an imperfect solution, but the only credible one that has been proposed with time of the essence, only to take the lectern in the aftermath and accuse the party who voted Yea at 60% of somehow sinking the bill.

So tell me again, who is it who puts politics over country?

Baltar, Congress -- indeed, politics -- is only one dimension of this thing. Lots could happen and probably will. The question is, how much of any of it will move the markets and in what direction?

FYI to everybody when watching indices during the day... the Dow gets the headlines, but the S&P 500 is a better barometer of what's really happening. If you want a quickie measure of the pain the average US stock investor is feeling, that's the number to use.

BTW, the S&P 500 includes 500 of the largest US stocks... 499 of them were down today. Guess which one was green?

I think my man Blodget wrote about 40,000 words yesterday. This in particular deserves the greatest possible amplification.