The US$700 billion rescue package was a bitter pill for many members of the US House of Representatives to swallow, but they swallowed it anyway and quickly sent it to George W Bush, who signed it on Friday.
As the "sweetened" version of the rescue plan passed the House in a 263 to 171 vote on Friday - 58 more votes than the original draft had on Monday - few who voted "aye" did so without pointing to the bill's imperfections.
"We've just performed emergency surgery, but unless the patient starts eating right and exercising, the problem's coming right back," Steny Hoyer, the House majority leader, said after the bill passed.
It was a muted victory to say the least.
Beyond the partisan bickering - and the occasional pats on the back from everybody, including the president, when both sides finally came together - many economists and members of Congress agreed that the plan does little to address broader economic problems, which were manifest in economic data that surfaced last week.
The labour department reported on Friday that the US economy lost 159,000 jobs in September, the steepest one-month drop in five years and the ninth straight month that jobs have fallen.
That came just after US automakers reported a stunning 27-per-cent decline in sales, a statistic that is considered a bellwether of people's ability to afford big-ticket items and one of the first to indicate a recession.
The US lending market was so crippled that Arnold Schwarzenegger, the governor of California, said on Friday his state might need a $7bn (Dh26bn) emergency loan from the federal government to pay its bills, something almost unheard of in the United States.
Rob Scott, a senior international economist at the non-partisan Economic Policy Institute, said the rescue plan barely scratches the surface of much deeper economic woes.
"This is a hope and a prayer that Hank Paulson [the treasury secretary] can do something to keep the situation from getting worse, but it is going to do nothing to help us get out of the recession that is already in the pipeline," he said. "It's like trying to give a blood transfusion to a patient with internal haemorrhaging.
"We've already got a collapsing housing market, a collapse in auto sales; we have recessionary conditions in the manufacturing sector. The data just keeps getting worse."
Under normal circumstances, the bill - which essentially grants Mr Paulson the money and authority to buy up soured bank assets and unclog the arteries of the US financial system - may not have passed at all.
Fiscally conservative Democrats, for example, took exception to some of the more than $100bn in tax breaks the Senate attached to the legislation without curtailing spending.
"I'm angry, frustrated and sad, but I believe we have to do the responsible thing and that's why I am going to support the bill," said Joe Baca, a congressman from California and member of the Blue Dog Coalition, a group of 49 fiscally conservative Democrats.
Although the tax breaks were meant to make the bill more attractive to Mr Baca's Republican colleagues, who were already troubled by a massive government intervention in the free market, many remained unconvinced of the plan on Friday.
"People are hurting, people are mad - I'm mad," said J Gresham Barrett, a Republican congressman from South Carolina. "Do I still have concerns about this bill? Yeah. Do I still have concerns that it will affect the free market system? Yes, I do. But we have to act, and we have to act now."
After the House's initial rejection of the bill on Monday, which sent the US stock market into a record-breaking 777-point tailspin, the prevailing sentiment on Capitol Hill was that something had to be done, even if it was not perfect.
"I don't say that we celebrate it," the House speaker, Nancy Pelosi of California, said after the bill passed. "We could have had a much better bill under different circumstances, but these were not the circumstances we were under - we were dealt a bad hand and we made the most if it."
That sentiment was echoed on the campaign trail by the two presidential contenders, both supporters of the Senate measure, and both of whom were able to lay claim to some 11th-hour brinkmanship that helped the bill succeed.
John McCain, the Republican candidate who took the politically risky step of suspending his campaign 10 days ago to work on the bailout negotiations, took credit for helping negotiate the tax provisions that brought conservatives on board.
"I'm glad I suspended my campaign to go back to Washington to help bring the House Republicans to the table," he said.
Across the aisle, some House Democrats who flipped their votes were sure to point out that it was a last-minute phone call from their candidate, Barack Obama, that persuaded them to support the measure.
As grim economic data continue to spook voters, it is generally seen to benefit Mr Obama, who a majority of voters believe is stronger on pocketbook issues. Even as Mr McCain tries to assert himself on the economy, he is tied to a political party many associate with the meltdown.
Still, with neither party completely sold on the short-term rescue plan and the country's financial future uncertain, the candidates sounded much like their brethren in the House.
"This is not a moment for celebration," Mr Obama said.
"The action Congress took today is a tourniquet, not a permanent solution," Mr McCain had added.
sstanek@thenational.ae
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
How The Debt Panel's advice helped readers in 2019
December 11: 'My husband died, so what happens to the Dh240,000 he owes in the UAE?'
JL, a housewife from India, wrote to us about her husband, who died earlier this month. He left behind an outstanding loan of Dh240,000 and she was hoping to pay it off with an insurance policy he had taken out. She also wanted to recover some of her husband’s end-of-service liabilities to help support her and her son.
“I have no words to thank you for helping me out,” she wrote to The Debt Panel after receiving the panellists' comments. “The advice has given me an idea of the present status of the loan and how to take it up further. I will draft a letter and send it to the email ID on the bank’s website along with the death certificate. I hope and pray to find a way out of this.”
November 26: ‘I owe Dh100,000 because my employer has not paid me for a year’
SL, a financial services employee from India, left the UAE in June after quitting his job because his employer had not paid him since November 2018. He owes Dh103,800 on four debts and was told by the panellists he may be able to use the insolvency law to solve his issue.
SL thanked the panellists for their efforts. "Indeed, I have some clarity on the consequence of the case and the next steps to take regarding my situation," he says. "Hopefully, I will be able to provide a positive testimony soon."
October 15: 'I lost my job and left the UAE owing Dh71,000. Can I return?'
MS, an energy sector employee from South Africa, left the UAE in August after losing his Dh12,000 job. He was struggling to meet the repayments while securing a new position in the UAE and feared he would be detained if he returned. He has now secured a new job and will return to the Emirates this month.
“The insolvency law is indeed a relief to hear,” he says. "I will not apply for insolvency at this stage. I have been able to pay something towards my loan and credit card. As it stands, I only have a one-month deficit, which I will be able to recover by the end of December."