13 members who might switch their vote: Contact them NOW!

Yahoo News is naming 12 members who might switch their vote

The $700 billion rescue plan the House defeated Monday would have passed if just 12 more members of the House had voted the other way. Here�s a list of a dozen members who voted against the bill � and what it might take to turn their nays into yeas.

Rep. Rodney Frelinghuysen (R-N.J.)

According to one senior GOP aide, Frelinghuysen was a yes but reversed his vote at the last minute. Afterward, Frelinghuysen called for more hearings and debate on the bill, saying, �We have not adequately consulted, deliberated and explained this to the American public and our constituents.�

Rep. Jim Ramstad (R-Minn.)

A retiring moderate Republican, Ramstad could have voted for the bill without worrying about a voter backlash in November. But he complained that the rushed debate had left �the final cost to taxpayers ... uncertain� and said he would prefer an insurance plan to a bailout.

Rep. John B. Shadegg (R-Ariz.)

Although John McCain�s campaign said he was working to rally House GOP support, not a single Republican from McCain�s home state voted for the bill. Shadegg wants changes in mark-to-market accounting rules and an increase in Federal Deposit Insurance Corp. limits.

Rep. Steven C. LaTourette (R-Ohio)

A close friend of House Minority Leader John A. Boehner, LaTourette opposed the package. Later, LaTourette said in a statement he wants to double the amount of FDIC insurance and allow U.S. companies operating overseas to bring assets back to the United States.

Rep. Doc Hastings(R-Wash.)

A moderate Republican, Hastings told the Yakima Herald that he was undecided until Sunday night. In the end, he said he voted no because there were still �too many concepts� and not enough details about taxpayer exposure.

Rep. Judy Biggert (R-Ill.)

Like many other Republicans on the Financial Services Committee, Biggert voted against the bill. But Biggert has said Congress needs to act, and she has expressed support for some sort of government-backed insurance plan that would allow business, rather than taxpayers, to assume more risk.

Rep. Xavier Becerra (D-Calif.)

A close ally of House Speaker Nancy Pelosi and a member of the Democratic leadership, Becerra ultimately voted no because he �wanted to see direct protections for responsible homeowners� in the bill.

Rep. David Scott (D-Ga.)

A member of the Congressional Black Caucus, Scott said after the vote that he could back the plan if 1 percent of the $700 billion were set aside in a program to prevent foreclosures.

Rep. Hilda L. Solis (D-Calif.)

With foreclosures in her district nearly tripling in the past few months, Solis said she opposed the bailout because it �lacks needed reform of bankruptcy laws� that may help keep people in their homes.

Rep. Shelley Berkley (D-Nev.)

While Berkley voted no, aides said she would be inclined to support the bill if it placed �tougher restrictions on CEO pay.� Aides also said she is looking for more specific language on the regulation of Wall Street.

Rep. Bill Delahunt (D-Mass.)

Another close Pelosi ally, Delahunt said he voted no because the bill would have done too much to help the firms that caused the problem. Delahunt wants to lessen the burden on taxpayers and has proposed assessing a transaction fee on lenders who turn over bad mortgage securities to the government.

Rep. Stephanie Herseth Sandlin (D-S.D.)

While a majority of her fellow Blue Dogs voted for the bill, Herseth Sandlin ultimately opposed it because she thought it would give Treasury Secretary Henry Paulson a �vast amount of power� without �effective oversight.�

Contact them NOW!
Flood them with calls and faxes.
Phone and Fax Numbers Are Below

Thank them for their courageous vote on Monday to defeat the bailout.
Tell them "for the good of the country they MUST insist other alternative be explored"
Insist the Paulson plan is flawed and there are better alternatives

Fax them with just a small message stating the above in your own words. Add a few sentences on your own so they do not all look alike.

Taylor a second fax from That Giant Sucking Sound except add in a sentence thinking them for their courageous vote on Monday and ask them to do it again.

The First Number Below Is A Phone Number

MetroFax Compatible Format

D N,William D. Delahunt,MA,2022253111,2022255658
D N,Shelley Berkley,NV,2022255965,2022253119
D N,Xavier Becerra,CA,2022256235,2022252202
R N,Judy Biggert,IL,2022253515 ,2022259420
R N,Doc Hastings,WA,2022255816,2022253251
R N,Steven C. LaTourette,OH,2022255731,2022253307
R N,John B. Shadegg,AZ,2022253361,2022253462
R N,Rodney Frelinghuysen,NJ,2022255034,2022253186
D N,Sandlin,SD,2022252801,2022255823
D N,David Scott,GA,2022252939,2022254628
R N,John Shadegg,AZ,2022253361,2022253462
R N,Jim Ramstad,MN,2022252871,2022256351
R N,Jim Gerlach,PA,2022254315 ,2022258440

Addendum: I am adding a bonus #13

Rep. Jim Gerlach reconsiders bank bailout: UPDATE

He is last on the list above.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

France, Germany Clash Over Proposal to Bail Out Banks

Tensions are building up in the Eurozone as France, Germany Clash Over Proposal to Bail Out Banks.

France and Germany clashed over whether to create a fund to bail out banks pounded by the global credit crunch, kicking off a European version of the debate that has been raging in the U.S. for two weeks.

French Finance Minister Christine Lagarde told the German newspaper Handelsblatt in an interview to be published today that a "rescue package" was needed to help "smaller" European states "threatened with a banking failure." Germany opposed the proposal, with finance ministry spokesman Torsten Albig saying his government "doesn't support the plan."

The conflict between the two biggest euro-region economies undermined efforts to build a consensus European response to the financial crisis as a recession looms. Other fissures emerged, as Ireland's decision to guarantee bank deposits and debts prompted criticism by British bankers yesterday that it "distorted competition."

A European version of the Paulson plan is a "non-starter" because of competing agendas and coordination difficulties, Klaus Baader, chief European economist at Merrill Lynch and Co. in London, said in a Sept. 29 report. Still, he expects increased cooperation among governments confronting the crisis.

French President Nicolas Sarkozy may propose the bailout fund at an Oct. 4 meeting that Luxembourg Prime Minister Jean- Claude Juncker said he's attending with leaders of Great Britain, Italy and Germany, as well as European Central Bank President Jean-Claude Trichet.

The proposed fund would total 300 billion euros ($420 billion), Reuters reported, citing an unidentified European government official.

The specifics of a coordinated plan notwithstanding, Germany rejects a Europe-wide approach to bank rescues, said Albig, the finance ministry spokesman.

"The idea of applying one solution, one big bang" should the banking crisis spread "is not practicable and would create new, enormous problems," he told reporters yesterday in Berlin. "The tailor-made solution is the right way."

Current State Of Affairs

• Big Bang "Bazooka" Paulson is firing with both hands.
• The eurozone begging the US for handouts as noted in Trichet, Brown Pressure Bush To Pass Bailout Plan.
• The mother of all boondoggles is awaiting passage in the US House as noted in That Giant Sucking Sound.
• A Major Insurance Company Is On Verge Of Bankruptcy according to Majority Leader Harry Reid.
• France and Germany are bickering over banking bail out alternatives.

Nonetheless, being the eternal optimist that I am, I remain heartened by Paulson's assurances that "the banking system is sound".

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Major Insurance Company On Verge Of Bankruptcy: Senator Reid

Bloomberg is reporting Hartford, Prudential, MetLife Credit Swaps Widen to Records.

The cost to protect against a default by Hartford Financial Services Group Inc., Prudential Financial Inc. and MetLife Inc. rose to record levels on speculation that the turmoil in financial markets may be spreading to insurers.

Credit-default swaps on Hartford jumped 165 basis points to a mid-price of 675 basis points, according to broker Phoenix Partners Group. Contracts on Prudential rose 125 basis points to 617 basis points, while MetLife climbed 97 basis points to 583 basis points, CMA Datavision prices show.

An increase in the contracts, used to hedge against losses or to speculate on creditworthiness, represents a decline in investor confidence. Senate Majority Leader Harry Reid, in pressing for passage of a $700 billion financial system rescue plan, said yesterday that a "major" insurance company was about to go bankrupt if financial markets weren't calmed.

"We don't have a lot of leeway on time," Reid told reporters after a luncheon in Washington. "One of the individuals in the caucus today talked about a major insurance company -- a major insurance company -- one with a name that everyone knows that's on the verge of going bankrupt. That's what this is all about."

A spokesman for the senator later said Reid wasn't referring to anything specific, ABC News reported on its Web site.

A Hartford spokeswoman, Shannon Lapierre, reiterated comments the company made yesterday in a statement. The company said it's "confident" in its financial strength and its ability to meet commitments to customers and is "living through a period of unprecedented market conditions."

The market is going to go where the market is going to go, but if Senate Majority Leader Harry Reid was looking to induce short term volatility for the sake of political gain, he just may have done so.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

That Giant Sucking Sound

The following image was used by my friend Charles Goyette whose talk show I was on every Wednesday for several months. Charles left for personal reasons and I miss him. Rumor has it he is working on a new deal and I certainly wish him the best of luck.



The above image is from STOP THE $700 BILLION SWINDLE! The article is about our efforts to kill the Paulson Plan. It appeared about a week ago. You have to scroll down to see it. I was reminded of it when "Andrew" emailed me just a bit ago asking me to post a link. I will do so gladly and also add a link on the left sidebar pointing to Charles' Blog.

Andrew Writes:

WHERE IS YOUR SECOND WIND!!!

Don't let these fools get the best of you. Drive
forward. Push hard. We're swinging all the way
through this thing. Let our voices be heard!!!!

NO BAILOUT. PERIOD!!! NONE IN ITS CURRENT FORM!!!
NONE!!!! It will have been the biggest waste this
country has ever seen.

Rally the troops as only you can!!!!

Put up that final stand.... the people are PISSED, and
nobody trusts anyone on the list of influential people
you cited.

LET'S DO THIS THING!!!! What would Jefferson and
Washington be saying? What would Lincoln want?

If you look at the issue through that looking glass,
it's all common sense. They guys ARE NOT voting in
the interests of the people!!! Aren't we supposed to
be in a democracy?

ONE MORE PUSH!!! THIS IS IT! DIG IN, and FIGHT
ON!!!!

LET'S DO IT!!! I'LL BE HITTING THE
PHONES/FAXES/EMAILS ALL NIGHT LONG!!!!

Many other people expressed similar thoughts. I think I responded to a hundred emails tonight after falling asleep at the computer twice. OK, one more for the Gipper.

First let's consider If There Must Be a Bailout, Here's How to Do It.

If the government wants to save dying banks before they take others down with them, it should choose the clean and direct path: Inject capital into them. Take ownership stakes in return. And, where that's not feasible, seize them and sell their assets in an orderly way, just as the Resolution Trust Corp. did after the 1980s savings-and-loan crisis.

Only after a company's shareholders and debtholders have been flattened should taxpayers take a hit. And for a $700 billion investment, U.S. taxpayers should get a lot more in return than a gargantuan pile of toxic waste.

For that much money, at yesterday's prices, the government could buy 23 of the 24 banks in the KBW Bank Index, including Bank of America Corp. and Wells Fargo & Co. And it still would have money left to buy a stake in JPMorgan Chase & Co., the largest company in the index.

Infusing capital directly, though, was too simple for Paulson. It lacked subterfuge. He decided the way to save the financial system from the evils of structured finance was through more structured finance.

Instead of asking Congress to let Treasury recapitalize needy banks, he proposed buying some of their troubled assets at above-market prices. This would have let other banks create phony capital by writing up the values of similar assets on their own balance sheets, using Treasury's prices as their guide.

Small Wonder

In short, Paulson's plan was one part robbery (with the banks doing the robbing) and one part accounting sleight of hand. No wonder House members rejected it.

Suggested Fax Text

Fax Title: That Giant Sucking Sound

I applaud the decision of the House on Monday and pray for an even bigger margin in the next vote.




That Giant Sucking Sound we all hear was sponsored by the "party for smaller government" and embraced whole hog by the "party for bigger government".

Stop The Largest Tax Increase In History

I call on Democrats and Republicans alike to stop the taxpayer swindle. This $700 billion bailout of Wall Street will be the largest tax increase in history.

Paulson Proposal Will Bail Out Foreign Investors

Today I listened to Representative Brad Sherman on how the Paulson proposal will purposely bail out foreign investors.

Here is the shocking text as translated from CNBC in an exchange with Larry Kudlow.

Rep. Brad Sherman, D California:

Larry I am glad you have a few seconds to talk to someone who voted against this bill. I am not changing my mind. I want to thank my colleagues who stood up to the purveyors of panic and voted against a very bad bill and voted with 400 eminent economists including three Nobel laureates who wrote to us and said don't panic, don't act hastily, hold hearings, work carefully. The fact is Larry if you read this bill, even you would have voted against it.

It provides hundreds of billions of dollars of bailouts to foreign investors. It provides no real control of Paulson's power. There is a critique board but not really a board that can step in and change what he does. It's a $700 billion program run by a part-time temporary employee and there is no limit on million dollar a month salaries.

Larry Kudlow:

Let me just ask you one question. I think you are referring to foreign banks headquartered in the United States. I do not see how foreign investors get bailed out.

Rep. Brad Sherman:

Larry you have to read the bill. It's very clear. The Bank of Shanghai can transfer all of its toxic assets to the Bank of Shanghai of Los Angeles which can then sell them the next day to the Treasury. I had a provision to say if it wasn't owned by an American entity even a subsidiary, but at least an entity in the US, the Treasury can't buy it. It was rejected.

The bill is very clear. Assets now held in China and London can be sold to US entities on Monday and then sold to the Treasury on Tuesday.

Paulson has made it clear he will recommend a veto of any bill that contained a clear provision that said if Americans did not own the asset on September 20th that it can't be sold to the Treasury.

Hundreds of billions of dollars are going to bail out foreign investors. They know it, they demanded it and the bill has been carefully written to make sure that can happen.

Please scrap the Paulson proposal in entirety and try something that might work, that is constitutional, and does not put taxpayer money at risk. The actions of Treasury Secretary Paulson go far beyond disgusting, to outright betrayal of US citizens.

US citizens should not spending $700 Billion to bail out foreign investors.

What Would $700 Billion Buy?

It is time to start over with fresh approaches. Have you thought about what $700 billion could buy? How many jobs would $700 billion create if spent on infrastructure? How many banks would it buy?

$700 billion would buy 23 of 24 banks in the KBW Bank Index

Bloomberg commentator Jonathan Weil noted:

"At yesterday's prices, the government could buy 23 of the 24 banks in the KBW Bank Index, including Bank of America Corp. and Wells Fargo & Co. And it still would have money left to buy a stake in JPMorgan Chase & Co., the largest company in the index.

Infusing capital directly, though, was too simple for Paulson. It lacked subterfuge. He decided the way to save the financial system from the evils of structured finance was through more structured finance.

In short, Paulson's plan was one part robbery (with the banks doing the robbing) and one part accounting sleight of hand. No wonder House members rejected it.

Such simplicity might feel unnatural to someone like Paulson, who used to run Goldman Sachs Group Inc., or a congressman such as Barney Frank who depends on campaign checks from bankers like an infant needs mother's milk."

Barney Frank and Nancy Pelosi Beholden To Special Interests

It's time for new leadership and it's time for Congress to truly watch out for the taxpayer instead of paying lip service to it. It's time to kill the Paulson proposal and consider a dozen ideas, any of which would be better than Paulson's.

"What Congress must remember is that Americans don't exist at the pleasure of the country's banks. It's supposed to be the other way around. There's still time for the politicians to come up with a rescue plan that will work. The important part is making sure you and I get something of value in return for our money."

Senate Hypocrites

Scores of hypocrites spoke out against the bailout on Wednesday, then after stuffing the bill with more pork, voted in favor of it anyway.

I ask that you not do the same.

Paulson Bill Is A Disgrace

This bill is so full of holes and toothless provisions it is a disgrace.

Paulson Bill Creates No Jobs

The bill will not create a single job, it will not solve the underlying economic problems, and it will not protect taxpayer interests. Over 190 major economists agree.

Amazing Authority To The Treasury

The Paulson bill gives an amazing amount of authority to the Treasury Secretary when we don't know who he or she will be on 1/20/2009 or even which party that person will be from. Does this make any sense?

If you vote for this Bailout Bill I will vote against you.

I will do more than that, I will work actively for your opponent, no matter who that person is, doing everything in my power to contribute to your defeat.

If you vote for this bill I will contribute my time, energy and money to your opponent, whoever that may be.

Your Name
Your Phone Number
Your Email Address

If you live in their district, please add your address

One More For The Road

Click Here For A MetroFax Compatible Fax List For All Congress

Note: The metrofax HOUSE list in the above link was updated this evening to include information about whether someone is a Democrat or Republican and whether they voted Yes or No the first time. The format looks fine. Thanks to Marygwen for the changes!

The senate list contains duplicates and missing senators. We are concentrating on the house now anyway.

Click Here For Contacting Congress State by State.

Those who want to target leaning members of the house should click on Congressional Most Endangered List. Some in Congress have blocked faxes so expect a few errors.

I am faxing everyone in Congress right now. If you are willing to fax everyone, contact Metrofax and ask them to copy House01 through House11 from my file to yours. I hope they will oblige. Bear in mind that will be a ton of pages.

One final note: I am not in favor of nationalizing banks. However, I am in favor of doing anything to promote discussion that will stop the worst of all possible alternatives, that being the Paulson plan.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Bailout Bill Passes Senate 75 to 24

Tonight the Senate passed the most fiscally reckless bill in history. We fought a tough fight and even won a few battles but the reality is the war is likely over. A fear mongering campaign by Bush, Paulson, CNBC, CNN, and Bloomberg accompanied by a 777 point plunge on the Dow probably likely sealed the fate.

The media blitz was the financial equivalent of Bush's "Mushroom Cloud" speech that suckered Congress into a needless war in Iraq. The US has wasted a trillion dollars in Iraq for nothing, and now the Bush Administration with cooperation from Congress is going to waste $250 billion to $700 billion more at a bare minimum fighting an economic slowdown that is coming no matter how much money is wasted. I suspect the total will $trillions before all is said and done.

This is what we were up against.

• President Bush
• Treasury Secretary Paulson
• House Speaker Nancy Pelosi
• House Finance Chairman Barney Frank
• CNBC Cheerleaders
• CNN Cheerleaders
• Bloomberg Cheerleaders
• Prime Minister Gordon Brown
• ECB President Jean-Claude Trichet

That is a pretty formidable list. We shocked the world on Monday when the bill failed to pass the house. No one expected that result. We also won a lot of concessions, at least in theory. It will be interesting to see if any of them are worth a damn in actual practice.

For all the fear mongering about financial Armageddon if the bill failed to pass, it is fittingly ironic that that the futures are in the red as I type. Perhaps the stock market rallies on passage in the House, perhaps not.

Regardless, the market will eventually come to the realization that this bill is not going to create any jobs, spur lending, help the stock market, or put sour consumers in a better state of mind. Instead, $250 billion was just wasted with more (up to $700 billion total coming).

There is always a chance the next president (Obama) comes to his senses and does not ask for whatever Bush and Paulson do not waste, but I suspect the entire $700 billion may be long gone before Obama is sworn in.

I personally am going to continue faxing Congress, actually everyone in Congress. If you wish to continue the fight, and I hope most do, concentrating on the Congressional Most Endangered List and your own Representatives is a good place to start.

And although I am carrying on until the bill passes or is killed in the House, I am not going to propose any new campaigns. There are enough examples out there and enough ideas already. You are on your own as to whether to participate or not. I hope many of you do.

I want to thank everyone who took the time to phone, fax, or email Congress. Maybe we made a difference on the amount that is going to be wasted. Maybe not. But we did all we could, and then some. You can all be proud of your efforts.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

ISM Implodes, GE Credit Default Swaps Soar, Ford Sales Plummet

MarketWatch is reporting U.S. Sept. ISM manufacturing index plunges to 43.5%

WASHINGTON - The nation's manufacturers cut back production at a much faster pace than expected in September, the Institute for Supply Management reported Wednesday. This is the lowest level since October 2001. The ISM index plunged to 43.5% in September from 49.9% in August. This is the biggest drop in the index since 1984. The drop surprised economists. The consensus forecast of estimates collected by Marketwatch was for the index to slip only a bit to 49.6%. Readings below 50 indicate contraction. The ISM index has been holding near 50 since the summer. The previous low this year was 48.3 in February. Economists said the ISM index was near recessionary levels.

A Surprise?

Why that was a surprise would normally be a surprise, except for the fact that economists have been negatively surprised for months on end. Thus, the surprise would have been if there was no surprise.

GE Credit Default Swaps Widen

GE has suspended its buyback program as CDS Spreads Widen, Shares Fall.

General Electric Co. said it has been able to sell corporate paper and fund operations without tapping bank lines, seeking to quash speculation that led to a surge in its credit default swaps and a slump in the stock.

Chief Executive Officer Jeffrey Immelt last week said 2008 profit will be less than previously predicted, the second time this year he cited turmoil in financial markets in lowering the forecast for the second-largest U.S. company. GE today repeated Chief Financial Officer Keith Sherin's Sept. 25 comment that the $62 billion in bank lines backing up its corporate paper will "absolutely not" be tapped.

Credit-default swaps protecting against a default by GE Capital Corp. for five years climbed as much as 125 basis points to 740 basis points and last traded at 700 basis points, according to broker Phoenix Partners Group. An increase in the contracts, used to hedge against losses or to speculate on creditworthiness, suggests a decline in investor confidence.

General Electric last week suspended its stock buyback, shifting capital to protect its dividend and AAA credit rating. The company said it has slashed its commercial paper to below $90 billion, a goal Sherin announced last week to investors.

Credit Line Will "Absolutely Not" Be Tapped

If the credit line will Absolutely Not Be Tapped, then GE should get rid of it. Banks would love to free up those credit lines.

Market Calls GE's Bluff

GE Weekly Chart



click on chart for sharper image

GE Monthly Chart



click on chart for sharper image

An Elliot Wave ABC count yields a target near $15 for the bear market low. There is no guarantee it gets there. Also note a clean 5 waves down from the 2007 high on the weekly chart. That suggests a possibility there could be a short term bounce now. However, that 5th wave down could easily extend. Longer term, I am sticking with the ABC count as being the best count.

Ford Sales Fall 35%

Bloomberg is reporting Ford, Honda U.S. Sales Plummet as Credit Tightens

Sales at Ford, the second-largest U.S. automaker, fell 35 percent from a year earlier, the Dearborn, Michigan-based company said in a statement today. Honda reported a 24 percent drop.

Industrywide sales probably will fall for the 11th month in a row, the longest slide in 17 years, as the financial crisis caused lenders to toughen loan standards and consumers curbed spending. Sales already had dropped 11 percent through August, in part because of high gasoline prices.

Ford said its sales fell to 120,788 cars and trucks from 184,612 a year earlier, the 22nd decline in the past 23 months. U.S. sales of pickup trucks, sport-utility vehicles and vans for its U.S. brands tumbled 39 percent, as it sold 42 percent fewer F-Series pickups. Car sales for the Ford, Lincoln and Mercury brands fell 19 percent.

Honda, Japan's second-largest automaker, sold 96,626 vehicles, down from 127,200 a year earlier, spokesman Chris Martin said in an interview. Sales fell across the Tokyo-based company's product line, except for the revamped Fit subcompact, he said.

"We've done nothing different, but customers just weren't coming into dealerships," Martin said.

No one in their right mind can deny the consumer led recession has started. It will be long and painful regardless of whether any bailout plan is passed. In fact, the recession will be much longer if the Paulson Plan does pass. $700 billion of taxpayer money will be wasted bailing out failed banks and failed foreign owners, and that money could have been put to far better use rebuilding infrastructure.

Please see Trichet, Brown Pressure Bush To Pass Bailout Plan and Rep. Brad Sherman On Bailing Out Foreign Investors for more details on Paulson's faulty bailout proposal.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Trichet, Brown Pressure Bush To Pass Bailout Plan

Bloomberg is reporting Trichet Says U.S. Must Pass Plan to Rescue `Global Finance'

European Central Bank President Jean- Claude Trichet said U.S. lawmakers must pass a $700 billion rescue package for banks to shore up confidence in the global financial system.

"It has to go, for the sake of the U.S. and for the sake of global finance," Trichet said in an interview in Frankfurt with Bloomberg Television late yesterday. "I am confident, but of course it is the decision of the U.S. Congress."

Trichet said a pan-European approach to the banking crisis was unlikely, saying "we are not a fully-fledged federation with a federal budget."

"Each country has to mobilize its own efforts," said Trichet. "But of course there is a European spirit and that is the spirit of the single market."

Trichet declined to answer questions about ECB monetary policy before tomorrow's interest-rate decision. All 58 economists surveyed by Bloomberg News expect the central bank to keep its benchmark rate at 4.25 percent.

European leaders are trying to better coordinate their response to the financial crisis. Luxembourg Finance Minister Jean-Claude Juncker said yesterday he expects to meet with Trichet and French President Nicolas Sarkozy on Oct. 4 to discuss "a more systematic approach."

Trichet's ECB has so far chosen not to follow the Federal Reserve in slashing interest rates since credit markets seized up 13 months ago, injecting cash into their markets instead, while keeping monetary policy focused on inflation.

Click Here To Play Video

At a minimum, I expect a change in Trichet's stance on rate cuts. A big surprise cut is certainly not out of the question. Given that rules on virtually everything are changing every day, it is hard to say where the dollar is going but I still sense up, no matter how absurd that may seem.

The Eurozone and the UK both have severe problems as well.

Brown says rejection of US bailout 'very disappointing'

AFP is reporting Brown says rejection of US bailout 'very disappointing'

Prime Minister Gordon Brown has described the rejection of a 700-billion-dollar Wall Street bailout plan by the US House of Representatives as "very disappointing".

Brown said he had told Washington he supported "decisive action" in the US financial markets amid continuing turmoil, and was prepared to do "whatever action is necessary" to ensure stability in Britain.

"The vote in America is very disappointing," Brown said, adding that he had "sent a message to the White House about the importance that we attach to taking decisive action" there.

US has responsibility to world to fix economy

Brown continued the pressure on Bush with this message: US has responsibility to world to fix economy.

The United States has a responsibility to the world and not just itself to sort out its teetering economy, Prime Minister Gordon Brown said Tuesday.

But Brown, disappointed that US lawmakers have rejected a 700-billion-dollar Wall Street bailout plan, said it was not yet time to apportion blame for the global crisis.

"What people want to know is, on top of these problems, can we get under control ... these problems in the financial system," Brown told Sky News and BBC television.

"They started in America, they've got to be sorted out. I believe that the Americans have come to realise that they have a responsibility to the rest of the world as well as to themselves.

"In Britain, we will do whatever is necessary; however it is necessary to sort out the problems in the system."

He added: "There will be a time for sorting out the blame and clearly what happened in America has got to be analysed for its effect on Britain but this is the time to roll up our sleeves and sort out the system."

Bailing Out Foreign Investors

If you have not done so already, please consider the must see video Rep. Brad Sherman On Bailing Out Foreign Investors.

Those of us fighting the Paulson Bailout are now fighting

• President Bush
• Treasury Secretary Paulson
• House Speaker Nancy Pelosi
• House Finance Chairman Barney Frank
• CNBC Cheerleaders
• CNN Cheerleaders
• Bloomberg Cheerleaders
• Prime Minister Gordon Brown
• ECB President Jean-Claude Trichet

None of the above is bright enough to figure out that wasting $700 billion is exactly the worst possible thing to do.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List