The United States House of Representatives failed to secure enough votes to pass a bipartisan emergency bailout bill on Monday afternoon.
The proposal, backed by the bipartisan leadership of the United States Congress and the White House, failed as lawmakers came up just under two dozen votes short, defeating the bill. In an extraordinary session, Speaker of the House Nancy Pelosi (D-CA) ordered the vote not be gaveled closed as lawmakers failed to rally enough votes for the bailout legislation.
A majority of House Republicans joined by scores of Democrats defeated the measure which is widely unpopular on Main Street. Unable to procure enough votes, the Chair relented and gaveled the voting session closed without a rescue plan for a deeply troubled American economy.
The DJIA, NASDAQ, S&P 500, and 10 Year Bond plunged as news of the defeat hit Wall Street in the face. At one point during the vote, the Dow plummeted 700 points. The price of gold pivoted up 5.90 (0.66%) at 894.40 per ounce. Oil dropped -7.44 (6.96%) to 99.45 per barrel.
The AP reported at 2:29 PM ET Monday that the Federal Reserve in conjunction with foreign central banks will inject billions of dollars into the financial markets to prevent a global credit freeze. Banks are refusing to lend to one another, let alone smaller businesses and consumers, as financial trust dissolved on news that the US House defeated an emergency bailout measure aimed at propping up what remained of the American financial system.
The move by the Fed comes at an alarming moment in American financial history: on September 29, 2008 at 7 PM GMT the national debt stood at $9,858,235,401,094.92, according to the U.S. National Debt Clock. United States government spending increases by $2.32 billion per day, and is estimated to cost about $32,341.43 per citizen as of Monday evening.
Earlier in the day, US President George W. Bush called for Congress to pass the bipartisan bailout bill hammered together by leaders of both parties throughout the course of another climatic week on Wall Street.
The American President sought to clarify what that vote means: a "vote for this bill is a vote to prevent economic damage to you and your community."
After the bill's defeat, the President said he was very disappointed.
Despite pending passage of the emergency bailout legislation, $700 billion in taxpayer money to be funded in a three-part installment, American stock indices opened steeply lower on Monday following leads in trading across Asia and Europe.
Wall Street's lingering funk may be attributed to the sinking realization that any government bailout is optimally a tonic, an economic elixir, rather than a cure for what ails the global financial markets. News that Fannie Mae and Freddie Mac were subpoenaed for creative accounting records by a federal grand jury only added to the gloom as corporate executives began forming a nagging notion that some may be held to account for their actions.
Credit movement remained extremely tight on Monday just above freezing: the rates banks charge each other for loans rose. Purchases of US Treasury instruments and other safe bets increased as investors headed for cover.
International markets shuddered on Monday: London's FTSE 100 was down over five percent (-5.30%) losing -269.70 points (Mon 16:46) on the British government's nationalization of Bradford & Bingley.
In Hong Kong the Hang Seng was down -4.29% (Mon 10:25), Tokyo's Nikkei was off -1.26% (Mon 08:14), and the Sydney All Ordinaries lost almost two percent [-1.94 (Mon 12:41)].
European financial chaos intensified over the weekend and into the first day of the trading week: Frankfurt's DAX fell -4.23% (Mon 16:45), Amsterdam's AEX plunged -8.75% (Mon 17:07), Brussels' Bel 20 tanked -7.98% (Mon 17:07), Moscow's RTS dove -7.11% (Mon 17:01), and the Paris Cac 40 shed -5.04% (Mon 17:11).
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