2nd assignment

2nd assignment - house passes bailout bill With the bang of...

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house passes bailout bill With the bang of a gavel on the House side of Capitol Hill on Friday, the TARP was born. The Troubled Asset Relief Program, which is otherwise known as the $700 billion financial bailout bill, still needs a signature from President Bush, but that's just a formality at this point. (Update: He signed.) The House of Representatives approved the controversial legislation in a 263 to 171 vote. This was the House's second vote on this bill in just a week. After it defeated a slimmer version of the legislation on Monday, the Dow Jones industrials suffered their biggest point drop in history. An amended bill easily passed in the Senate on Wednesday night, which stepped up pressure on the House to find the votes needed to pass it. Today's vote marks the end of what has seemed like a long journey for the bill, but it was really a very short time period for such a massive legislation to make its way through the system. The bill authorizes the Treasury secretary to spend as much as $700 billion for buying up the illiquid assets on the balance sheets of many U.S. financial institutions. Details of precisely how the buyouts will be executed and by whom have yet to be worked out. Skeptics of the bill warned that the plan was flawed from the start, but the frozen credit markets forced legislators into action now instead of waiting until after the election. (For more on the pros and cons of the bailout, see this interactive) While the passage of this bill is certainly a good start to unclogging the credit markets, it's obvious it will be no quick fix. Indeed, the stock market seemed to reflect that observation as well. After surging nearly 300 points while the vote was underway, the Dow pared back its gained after the vote ended. As unhappy as investors were when the bill failed on Monday, they should be positively gleeful with the news that it passed today. That they aren't is just another example of the general sense of anxiety in the economy today. Now that the TARP bill has passed, Neel Kashkari and his team at the Treasury Department are
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This document was uploaded on 11/03/2011 for the course SPEA-V 161 at Indiana.

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2nd assignment - house passes bailout bill With the bang of...

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