By Camaron Abundes
MIDLAND- Lawmakers rejected a $700 billion dollar rescue bill, sending stocks plummeting on Monday.
"At the final minute I just couldn't force myself to believe this was the right enough answers to vote for it," Rep. Mike Conaway, (R)-Texas, said. "I really struggled with the decision right up to the last minute. Obviously, I think something still needs to be done to restore confidence in the overall lending market."
The Dow Jones closed down by nearly 7 percent on Monday afternoon.
"The expansion of the FDIC insurance coverage for bank deposits and the strengthening of the insurance product that we had originally put in as a mandatory program, where everybody that participates in the mortgage back securities arena will pay an insurance premium on their outstanding obligations," Conaway said. Both were key elements missing from the rejected bill.
Rep. Ciro Rodriguez, (R) Texas, Rep. Randy Neugebauer, (R) Texas and Rep. Steve Pearce, (R) New Mexico also voted against the bill, Monday.
"This compares very closely to some of the problems we had in 1929-1930," Financial Advisor Van Pearcy, MBA, RFC of Raymond James Financial Services, Inc., said.
In August 2008, Barron's ranked Van Pearcy's Wealth Services Team with Raymond James Financial Services, Inc. #32 out of the top 100 U.S. independent financial advisory teams.
Pearcy says historically, after every fallout a financial rebound always follows.
"Every single time we've had an issue in this country, 100 percent of the time (the market's values) have come back," he said.
Pearcy says this is a great time for people to invest, but those nearing retirement or who have already retired and can't wait for the market to turn around may need to rethink their retirement plan.
"Once the confidence returns, the market will recover they will gain a lot of their losses, but in times like this you need to recalculate to make sure you're investing enough and will have enough of the income that is needed in retirement," Pearcy said.
Congress will reconvene on this Thursday to hammer out a reworked rescue bill. Pearcy says he is confident once a bill is passed it will restore consumer confidence.
"Right now consumer confidence is at the lowest levels in recorded history," Pearcy said but adds the sell off on Monday doesn't compare to that of the late 1980's or the stock market crash of 1929.