Curious fact: the Dow made a 50 point up jump after the news broke, from a -540 loss to a -510 loss. Don't know that that will hold, but if it does: How many in Wall Street were actually in favour of the Bail Out? (Update: That didn't last long. Down
No Euro reaction to speak of at the moment. If one is forth coming this post will be updated.
I am watching CNN right now with a mix of surprise and bemusement, but also with awe. What a bland and bone dry beast our EUnion 'post-democracy' is compared with US politics.
Having said that: I am glad the bail out failed. The case against it has been made quite forcefully by Michelle Malkin (who must be pogo-ing around the house right now. Have to go check!). Based on the little knowledge I have about economics I tend to agree with her analysis.
Yet, with the bail out (temporarily?) out of commission, the future is also quite a bit less predictable. A mob in a panic can be a dangerous thing. Doubly so if that mob is trading in billions of euros worth of shares and commodities on a daily basis. This is starting to look like the Perfect Storm.
In the mean time, this video below (h/t EU Referendum) tries to get to the root of the current economic
[UPDATE001] Michelle also reports on the singularly unhelpful speech made by Pelosi. It isn't pretty and in a just world Pelosi's days a speaker of the House (and Democrat party big shot) would and should be numbered between 1 and 10.
[UPDATE002] EU Referendum is short and concise:
The US bank bailout has been rejected. Wall Street has nose dived.[UPDATE003] AP reports that the price of oil is down as well:
Hold on tight!
Light, sweet crude for November delivery sank $10.52 to settle at $96.36 on the New York Mercantile Exchange, after earlier dropping as low as $95.04.In the words of Johan Cruijff (paraphrased): Every downside has its upside. But evidently someone somewhere thinks the demand for oil is going to drop, i.e. the worlds economy is going to slow down significantly. 'Hold on tight!' is accurate...
[UPDATE004] Of course we have had our own little troubles even before the bail out news: Troubled Fortis partially nationalised. Causing the biggest drop (NL) in the AEX (the Dutch Dow, if you will) since 1987. And our FM, Wouter Bos has promised more if needed.
[UPDATE005] Michelle: Let’s stop pounding the panic buttons.
Here’s a novel thought: Maybe banks are finally learning they shouldn’t fork over money to bad risks.[UPDATE006] The New York Times has a transcript of the Pelosi speech here. EU Referendum has some Euro reactions here. Especially Peter Mandelsons reaction is exemplary for the alternative universe that EUrocrats seem to inhabit:
US lawmakers have "taken leave of their senses".Killing the bail out was probably the most sane course of action. Unless of course you want to (trans-)nationalise the entire financial sector. See where I'm gong with this?
[UPDATE007] Ambrose Evans-Pritchard: global crisis was now engulfing Europe with devastating speed.