Bailout Bill Fails House Vote

[CrackerBarrel]

Vote was 205-228 with 95 Democrats and 133 Republicans voting "Nay"

[MysticCat]

The voting hasn't closed yet (2:10 EDT), so there is still a chance that it can pass if 11 representatives change from no to yes. Which is not to say that will happen, but it's still a possibility.

[AOII Angel]

Originally Posted by CrackerBarrel

Vote was 205-228 with 95 Democrats and 133 Republicans voting "Nay"

Good for them! I think we all want some accountability with all of this mess, and I feel like these congressmen (and possibly women)are demanding that Washington be accountable to the people by not jumping in with a huge amount of money. I wish they had postponed it or not voted at all if they didn't have the numbers to pass it through. Bye bye, DOW!

[texas*princess]

Originally Posted by AOII Angel

Good for them! I think we all want some accountability with all of this mess, and I feel like these congressmen (and possibly women)are demanding that Washington be accountable to the people by not jumping in with a huge amount of money. I wish they had postponed it or not voted at all if they didn't have the numbers to pass it through. Bye bye, DOW!

I agree... I think it sucks that the Dow went through the floor, but this isn't a new problem. Maybe it would have helped for them to start looking for solutions 9 months ago when the problem wasn't quite so severe and urgent. I don't think it's right for them to just throw money at it with no accountability whatsoever and just hope everything works out.

[PeppyGPhiB]

People, people, people...we cannot allow AIG to go under. I don't think people get how serious this is. It isn't just a matter of saying, "Sucks to be them. They shouldn't have loaned people the money to buy big houses if they couldn't afford it. Let them die!" If AIG fails, so will a number of banks and lenders that AIG insures. And then NONE of the banks will have the money to conduct their business. FDIC will have NO meaning, because there won't be enough money to cover the losses. That's YOUR money that will be GONE. One day you may go to use your debit card and find that your bank will not allow you to withdraw any funds...because whoops, it doesn't have your money anymore...it's now at another bank, covering its debts.

[AGDee]

Not to mention that the credit market is frozen so there is no credit going out.. want to buy a house? Oh well. Want to sell a house? As if it weren't hard enough already? Sorry, your buyers can't get a loan because there is no money to loan. New car? Hope you have $24,000 in cash to pay for it because there is no money to loan.

[madmax]

Originally Posted by AGDee

Not to mention that the credit market is frozen so there is no credit going out.. want to buy a house? Oh well. Want to sell a house? As if it weren't hard enough already? Sorry, your buyers can't get a loan because there is no money to loan. New car? Hope you have $24,000 in cash to pay for it because there is no money to loan.

How does that compare to lending money to people that can not afford to pay it back?

[AGDee]

Originally Posted by madmax

How does that compare to lending money to people that can not afford to pay it back?

I know we're in a very different situation in Michigan than in most parts of the country, but the people that I know personally who have foreclosed on their mortgages *could* pay it back at the time that they obtained the mortgages. Some lost jobs, one lost her husband (and therefore, his income), etc. On my street, more of the people who are walking away from their homes are either unemployed or they have to move and cannot sell their house for what they owe on it, so they're walking away from it. If you bought your house for $180K and financed $140K and had a family income of $100K, that wasn't an irresponsible buy. The problem is that now the family income is $30K and the house is only worth $120K so they're screwed. I don't know anybody who was foolish enough to do the interest only loans or other crazy loans that were being offered, personally. I'd be very curious to see that breakdown with foreclosures... the "why" of it all. What percentage is due to unemployment, what percentage is due to bad loans, etc.

[UGAalum94]

Originally Posted by PeppyGPhiB

People, people, people...we cannot allow AIG to go under. I don't think people get how serious this is. It isn't just a matter of saying, "Sucks to be them. They shouldn't have loaned people the money to buy big houses if they couldn't afford it. Let them die!" If AIG fails, so will a number of banks and lenders that AIG insures. And then NONE of the banks will have the money to conduct their business. FDIC will have NO meaning, because there won't be enough money to cover the losses. That's YOUR money that will be GONE. One day you may go to use your debit card and find that your bank will not allow you to withdraw any funds...because whoops, it doesn't have your money anymore...it's now at another bank, covering its debts.

I thought the AIG deal already went through separately.

And can you take me through how you get from AIG to FDIC failing completely?

ETA: This link is a little old considering what's happened between then and now, but it explains how the FDIC would meet it's obligations even if more banks did fail. http://biz.yahoo.com/ap/080916/bank_...ts_safety.html

I'm certainly not feeling good about things, but a real doomsday scenario seems a little further off than your post implies.

[a.e.B.O.T.]

Originally Posted by UGAalum94

I thought the AIG deal already went through separately.

And can you take me through how you get from AIG to FDIC failing completely?

FDIC insures bank deposits in the event that a bank fails, like AIG, WaMu, etc... its the govt. basically protecting you in case your bank can't pay you your money. Well, with all these banks going under, it is putting more strain on the FDIC to insure all deposits, etc... Essentially, this is another way AIG's collapse directly effects the government, and therefor you... Secondly, AIG, WaMu, etc are not just small time banks, oh no, these are the banks that have given loans to other banks, etc...

[UGAalum94]

Originally Posted by a.e.B.O.T.

FDIC insures bank deposits in the event that a bank fails, like AIG, WaMu, etc... its the govt. basically protecting you in case your bank can't pay you your money. Well, with all these banks going under, it is putting more strain on the FDIC to insure all deposits, etc... Essentially, this is another way AIG's collapse directly effects the government, and therefor you...

Right, the FDIC is likely to experience more strain, but I don't think it's in any danger of failing to meet its obligation because it has other resources at its disposal if it needs them, like you and me and our tax dollars.

I have no doubt that we're all going to be affected, but I don't think that we need to worry about our FDIC insured funds particularly.