USA saved or depraved?

In news just to hand,  the Bill to bail out Wall Street has been passed through the US Senate -14 votes more than needed. One senator has asked for a roll call.

The question remains. Will this be sufficient to rescue the fledgling US economy and reinvigorate global markets?

Add to this, recent reports that Australian Banks may not pass on potential RBA rate cuts to customers.

Somewhat bizzarly, Wayne Swan has jumped to the defence of the banks. 

Will this save the USA?   What does it mean for global markets and our own Australian economy?

UPDATE: Apparantly the bill now needs to go through the House of Representatives where it faces an ‘uncertain future’.

Here’s the link,27753,24435199-462,00.html

7 Responses

  1. I just tried to find the link, but could not find it, but I think it was Rush Limbaugh who has said (basically) – why don’t we take the $700 Billion and actually support the home-owners who are defaulting on their mortgages. That way, we would not have the sub-prime crisis in the first place.

    It makes just as much sense as looking after the financial institutions.

  2. Is it that simple joni? I’m not sure…enter JMcP?

    Perhaps the main reason that Limbaugh’s idea won’t happen is that the financial elites wouldn’t get the lion’s share of the cream in that scenario; & at the end of the day that’s what will happen IMHO…status quo perpetuated.
    Little guy goes to the wall, fatcat goes to the Bahamas.

    So not quite saved yet, but definitely depraved. All of ’em, Dem’s & Repugnants.

  3. My heart says that this will hopefully stabilise the market.

    My head says that this injection will only delay the inevitable…MELTDOWN!!!

    Seriously, if my heart is correct what will be the lessons learned in the long run?

    These guys in the financial institutions and their Wall Street cowboy mates have been manipulating the market for their own gain and egos and they deserve to not only go to the wall but under.

    For these reasons alone I hope my head is right.

  4. Wave wave to scaper.

    A good explanation comes from good old Terry McCrann: Talking Turnbull on the Banks at:,21985,24433272-36281,00.html

    Spot on Terry, Quote: This is not a good time to undermine the profitability of our banks. Even accepting, and indeed precisely because, they have made some poor decisions themselves.

  5. There are two major issues with the idea of giving money to the mortgage holders defaulting on the loans – the Republican’s “free market” ideology and the effect of “corporate donations” in a “representative democracy”.

    On the first issue, due to the cost of the plan, the politicians voting for it want some major ass-covering. In other words, “we’re not doing it unless they do it too”. There are enough Republicans who espouse and/or believe in the concept of “unregulated trickle-down economics”. Without enough of them supporting the bill (ironically enough through some weird ass “ear-mark” like provisions to “sweeten” the bill) – the Democrats don’t want to break cover and do something too lefty by themselves and possibly lose the presidency to McCain. Giving money to the “people” (i.e. the bottom of the economy) rather than to the “corporations/banks” (i.e. the top of the economy) wouldn’t even make a reading with the free-market believers.

    On the second issue, it is much easier to get the ear of your democratically elected “representative” when you garner them tens of thousands in campaign donations than if you’re one of those… what-ya-call-em… ah yeah, voters. It is much easier to twist someone to your way of thinking when the longevity of their career (i.e. politician) relies on your good grace. The money that you might lose by voting for something the banks/corporations would not like could conceivably go to your opponent.

  6. I’m with Swan on this one – as much as I would love the extra cash that a reduction in interest rate on my home loan would give me, it is more important at the moment to keep our financial markets strong and profitable. A shit load (can I say that here without #@ etc) of people have huge amounts of their savings and super wrapped up in stocks and the more profitable our markets are, the more valuable these savings will be. We aren’t going under in a big way at the moment and can probably afford to live with only .25% being passed on as opposed to a full .5%. As the funds market (probably initially only in Asia and here) improves, the extra amount will be passed through as the minnows become competitive again.

    Whether the US bail out package works or not will probably not affect us a heap in the long run. My money is that it wont wortk but the Asians will realise that they aren’t as linked to the US as they were and we will go along with the rest of Asia for the ride. As Garnaut pointed out in a talk, our total exports to the US are less than the increase in export sales of coal alone will bring in this year. The slowdown will reduce growth but not as significantly for us as may have been the case if China and India weren’t growing so much. I kinda looks bad now but as long as our big businesses remain profitable (and this is what Swan is talking about) and our Government has cash to spend on capital works, we should ride this out OK. I can’t say the same for the US and Europe though.

  7. Dave55,

    Shit yeah!

    But of course, we do not want the really bad words on here… you just have to work out what they are LOL

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