A source on the Hill told me a few minutes ago that the House will definitely not vote on the bailout until tomorrow, leaving the rest of today for the House to debate the new Senate version while the pundits debate whether Gwen Ifill’s deception discredits her for moderating tonight’s VP debate. Last night the Senate voted overwhelming to bailout Wall Street, up the FDIC insurance level, and mandate mental health insurance from providers. Thank you Mr. Obama for insisting that no pork be added on to this bill. (That’s change we can believe in). Ironically–and painfully–the stock market took another dive today, erasing most of Tuesday’s gains. Debate in the House has been heated and the pork in the bill has proved a “sweetener” to some and liability to others. However, the assumption is that the stock market can’t take anymore of this indecision and a “no” vote would be most unfortunate for American wealth (not mention seriously tick off Europe). However, there is an unfortunate trend that Congress and the White House have failed to see. Part of the Treasury’s goal in this bailout was to bring confidence to the stock market. But every action they have taken has resulted in catastrophic loss (and triple digit adjustments in the Dow have become the norm). When Congress is dormant the Dow goes up.
- Friday, Sept. 26, Congress announces bailout talks have stalled after Obama and McCain failed to come together with President Bush in high level Thursday meetings: Up 244
- On Monday, the House votes “no” on the bailout: Down 777
- On Tuesday, the bailout plan is in complete limbo: Up 485
- On Wednesday, the Senate version of the bailout looks “promising”: Down 19
- On Thursday, the Senate passes the new bailout plan: Down 348
- You can trace this problem back to when Paulson made his first announcement on September 19th when the stock market surged at the end of the day only to come tumbling down after Wall Street spent time considering the White House plan over the weekend.