Bailout Report

In October, 1987 the New York Stock Market crashed. In 1995 Netscape went public. In April, 1999 the Dow Jones Industrial Average broke 10,000 and government policy was beginning to loosen restrictions on loans made to home buyers with poor credit quality. By 2004, 70% of American families lived in homes the owned and Manhattan apartments were regularly trading at over $1,000 per square foot. In 1997,, the Chinese were preparing manned space flight and in the US, more physicists were being hired by hedge funds than by NASA.

In the summer of 2007 two Bear Stearns hedge funds collapsed on the back of their holdings of subprime mortgage debt. A year later the firm did. In September, a second major investment bank, Lehman Brothers, was bankrupted and the US government infused over $30 Billion in a private insurance company to prevent it from doing the same. On September 19th, 2008, US Secretary of the Treasury Henry Paulson rushed the leadership of the US Congress into an extraordinary meeting on Capital Hill and sounded an alarm that ended the greatest bull market in human history. Since that fateful meeting, the World’s financial markets in equities, loans, and commodities have been devastated. Massive amounts of accumulated wealth have been lost and the future of the international monetary system has been thrown into doubt.

On the back of guaranteeing JPMorgan Chase’s purchase of Bear Stearns, propping up insurer AIG, and allowing storied investment house Lehman Brothers fail, the US government has pledged over $1.8 trillion to bailout ailing financial institutions in various forms. While the $750 Billion TARP is but the most visible program, there are several other federal agencies at the center of the intervention included the Fed, FDIC, and Controller of the Currency. A vast new government bureaucracy and layers of rules and actions will govern how this huge stockpile of dollars is spent.

For those with a need or desire to know where this money is going can follow the action in the Bailout Report. We will track the rules, the laws, the law makers, the policy makers, the recipients, the dollars, and the cents.

Timeline

March 16, 2008
The US Government in the guise of JPMorgan Chase agrees to buy Bear Stearns for $2.00 a share.

September 15, 2008
Lehman Brothers is deemed too pathetic to save.

September 19, 2008
Paulson scares the shit out of Congress.

September 20, 2008

Paulson sends a three page bailout bill to Congress graciously volunteering to single handely manage a $750 Billion ‘blank check’.

September 20, 2008, 9:01AM
Congress flip outs.

September, 29, 2008
The US House of Representatives, lead by an election weary Republican minority, rejected the revised Bill by a mere 11 votes.

October 2, 2008
The US Senate, the ‘Enlightened Chamber’ passes a refined Bill by a vote of 74-25.

October 3, 2008
The US House passes the refined Bill by a vote of of 263-171 and President George Bush signs the Bailout Plan into law.

Let the games begin……..