Holy Moly, who saw that one coming?! The House of Representatives voted down the bailout 228 to 205, and it’s being blamed on a “too-partisan” speech made by the Democratic speaker of the House Nancy Pelosi. Whether her speech was partisan or not, someone’s head had to roll.
Hindsight is 20/20, and looking back to last night, there was a clear signal the bill wasn’t going to pass: after an initial positive response, the Asian markets began to slide into red. Real money movers always know things ahead of time, and the Asian markets’ slip was a sure signal that our bill was not going to pass. I should have seen it, and maybe subconsciously I did, but it seemed too unbelievable that the bailout would not pass given its enormity and all the long days and weekends Congress had put into it. But as we’ve seen with IndyMac, Fannie and Freddie, and Washington Mutual, nothing is too big to fail.
Lawmakers are headed back to the drawing board to draft up a new version of the plan, but won’t meet again until Wednesday because tomorrow is Rosh Hashanah.
I’m more of an observer now than an active player. I’m in too deep to do anything except wait, so all I can really focus on is the day to day with the stocks I own and the stocks that those stocks are absorbing. Citigroup (C) bought Wachovia (WB) today for $2.2 billion, or $1 per share.
Two funny computer errors happened today: Thornburg Mortgage (TMA) put through a 10:1 reverse stock split this morning, but not before they multiplied the share price by 10. So during today’s premarket, it looked like I had 3K extra in my account! But the quirk was soon fixed and so was the overinflated share price. By close, TMA was down to $1.15, which would have been 11.5 cents on Friday before the reverse split. To buy back the preferred shares, Thornburg needs to raise more capital. You’re welcome, TMA.
Another blip came to Wachovia’s share price today. At one point, it listed on Google finance at $500! Message boarders were going nuts, and that error put the financial sector up 7% and made it look like the only sector in the green. But that error was also soon fixed, and everyone who owns WB fell back into reality.
One last computer oddity happened at the New York Stock Exchange today: because of a glitch, the morning bell never rang. Mary Caraccioli said she’s never seen that happen.
People are still sweating a Moody’s downgrade to Ambac (ABK). I really hope not. Of all problems that could happen, that one tops my concern. Just about a month ago, I was up over 100% on ABK and now I’m in the red. If a Moody’s downgrade comes, it’ll destroy Ambac, especially after today.
The Dow, which opened down over 100 points in seeming anticipation, dropped 777 points today- the greatest one-day decline in its history and even greater than the drop after September 11, 2001- to close the say at $10,365. However to see the glass 1/10 full, this was the 17th worst daily drop percentage-wise, so not quite the worst. Crude oil fell $10.52 to close at $96.36.
The Sydney Morning Herald reported tonight that “online broking portal Etrade ground to a virtual halt this morning [Tuesday September 30] as it struggled to cope with massive trading volumes.” Is this a hint of more blood to come? Damn sure it is!
