Bailout Vote Fails, Sept 29 2008

From The National Post, Posted: September 29, 2008, 2:14 PM by Shane Dingman

Political wrangling faulted as U.S. House bailout vote fails

The House of Representatives Monday rejected by a vote of 228-205 a Wall Street bailout bill that would have authorized the Treasury Department to spend up to US$700-billion to purchase broken mortgage-backed bonds from banks with the goal of jump-starting stalled capital markets, Reuters reports.

Defeated by skeptics from both parties who questioned the need for it and whether it would work, the bailout plan was proposed by the Bush administration on Sept. 20. Congress modified it in just days amid warnings from the White House that urgent action was needed to prevent economic disaster (watch the markets here).

As House Speaker Democrat Nancy Pelosi said: "While the bill has failed, the crisis has not disappeared."

Represenative Barney Frank told reporters after the vote that the Democratic leadership would assess the "economic reaction."of the vote before bringing the package back for a second try.

But, The Washington Post is reporting that the GOP is heading for the exits, and will refuse to vote again on the rescue package:

Rep. John Boehner (R-Ohio) just told The Post's Paul Kane there will be no more votes today on the $700 billion Wall Street bailout rejected earlier this afternoon by the House.

The members have left the House and headed to the airports for a scheduled recess. Boehner said he had no idea when there could be a new vote.

The GCP event was set for the 24-hour GMT day, and includes several hours before the voting and several hours after, during which the news spread and among other things resulted in a record drop in the US stock market. The Chisquare is 86944.5 on 86400 df, for p-value of 0.095 and Z = 1.309.

An exploratory analysis gives a more comprehensive picture of the financial meltdown.

Bailout Vote
Fails, Sept 29 2008

The voting began about 1:30 pm (17:30 GMT) and the actual timing of the vote failure was 2:08 pm. The following graph shows the data from 2:08 pm until midnight GMT, almost 6 hours. It is interesting to look at the graph of Wall Street performance around that time.

Bailout Vote
Fails, Sept 29 2008

It is important to keep in mind that we have only a tiny statistical effect, so that it is always hard to distinguish signal from noise. This means that every "success" might be largely driven by chance, and every "null" might include a real signal overwhelmed by noise. In the long run, a real effect can be identified only by patiently accumulating replications of similar analyses.

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