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发表于 2008-9-29 13:50
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U.S. lawmakers reject bailout plan
Kevin Drawbaugh and Eddie Evans $ a" g: b+ S; Q0 M' Q
Reuters
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0 S) [. G" T& v" vMonday, September 29, 2008
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Markets fell sharply as the deal, brokered over the weekend by Republican and Democratic leaders, collapsed on the floor of the House of Representatives. 1 g. q- e% M5 K: J" A1 P
0 R, U! a3 m$ m3 I! c+ HWASHINGTON/NEW YORK - U.S. lawmakers rejected a $700 billion bailout plan for the financial industry in a shock vote that sent global markets sliding as European authorities scrambled to prop up a slew of banks.1 ?7 S4 o4 }0 V$ U
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Even before the vote, Asian and European markets had plummeted on fears the crisis was spreading, while U.S. regional lender Wachovia became the latest big bank to succumb to the crisis.2 h% @# `, U. o% z0 b" Z- K
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And global money markets were frozen even as central banks poured hundreds of billions of dollars into the financial system to persuade financial firms to stop hoarding cash.
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3 x5 ~# r2 i, s' l. V( ~; K+ S"There's a monster amount of fear out there. This is global contagion. It's no longer just the United States," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.' d4 c" E# m- b! e+ @
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The House of Representatives voted 228-to-205 against a compromise bailout plan that would have allowed the Treasury Department to buy up toxic assets from struggling banks. House Republicans, in particular, balked at spending so much taxpayer money just before the Nov. 4 U.S. elections.
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. r# g r- b0 y' |( l. W: e"I can't believe they weren't able to come together and come up with a solution. Complete disaster was predicted if it didn't pass," said Stephen Berte, senior equity trader at Standard Life in Boston. "I can't see what the upside is right now."+ S1 L) S4 V6 ^5 r6 h) j/ ]4 I
$ Y0 J: }4 {! S/ a# Q+ BThe plan's defeat sent U.S. stocks plunging, with the blue chip Dow Jones industrial average .DJI briefly posting its biggest drop ever - down 700 points. Latin American stocks tumbled 13 percent, their biggest decline in more than a decade.
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. u# {9 l" Q4 L- f" iInvestors rushed to assets considered a safe haven. Government bond prices and gold jumped, and oil fell below $99 per barrel on the view that world demand will contract as the financial crisis puts the brakes on economic activity.- e6 B" D( T/ e& n& Y) [
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In Washington, the failure of the bailout bill - after more than a week of intensive closed-door negotiation intended to hammer out a compromise plan - brought new uncertainty about the response of the U.S. government to the worst financial crisis since the Great Depression.9 q6 p& ~* C+ _ [
7 \% S2 t: y; Z0 E. k) `9 vU.S. President George W. Bush was set to huddle with economic advisers to consider the administration's next move after the White House failed to win support for the bailout plan from Bush's fellow Republicans.5 T$ j* {$ ^0 o, {/ S
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"There's no question the economy is facing a difficult crisis that needs to be addressed," White House spokesman Tony Fratto told reporters.
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. W, u: A1 |3 T {The bailout plan was announced by the Bush administration last week. In the end, Republican House members voted against it by a more than 2-to-1 margin. A majority of Democrats voted in favor.1 Y; }3 a( Z7 v
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Rep. Barney Frank, a Massachusetts Democrat who helped craft the bill in hours of negotiations with leading lawmakers, said the next step could hinge on the economic fallout from the bill's failure.
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Capping three hours of debate, House Majority Leader Steny Hoyer of Maryland had warned lawmakers that the cost of inaction would be an economic calamity beyond Wall Street.4 ], E4 Q9 ~+ u( y* P) I
* A% Y2 S$ @1 Q. [: J0 ?; |"A meltdown would begin, it is true, on a few square miles of Manhattan, but before it was over, all of us know, no city or town in America would be untouched," Hoyer said.' e3 x) M; R8 p6 }1 r' u& G4 t: f
$ f. H1 {/ ]5 A, K( VThe high-stakes political showdown on the bailout proposal came after Wachovia Corp agreed to sell most of its assets to Citigroup Inc in a deal brokered by regulators.
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0 h! R0 B }6 d# x: NEarlier, the governments of Belgium, the Netherlands and Luxembourg moved to partly nationalize Belgian-Dutch group Fortis NV, and German lender Hypo Real Estate Holding secured a credit line from the German government.9 l2 X5 w3 I2 l: C* k: H
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British mortgage lender Bradford & Bingley Plc was brought under the government's wing, shares of French bank Dexia tumbled on a report that it might need emergency capital, and bank rescue deals also emerged in Iceland, Russia and Denmark.( |, i6 s' Y2 A6 k/ ?# Y. | T! u
' i/ g% }" x" O. @0 L5 h" t"The contagion is spreading to mainland Europe and everyone's asking, 'Who's next?'" said Mark Sartori, head of European sales trading at Fox-Pitt, Kelton in London." P4 o5 y- O& C+ i' k; F
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Earlier, European shares had dropped to a three-and-a-half year closing low, with bank shares weighing heavily.
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3 V8 V! }8 U9 E: V"Investors are fearful, frenetic, especially when it comes to banking shares. They want to get out now and see the after effects from afar," said Frank Geilfuss, head analyst at Bankhaus Loebbecke.
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4 i/ a4 R C" l4 jThe world's central banks, led by the U.S. Federal Reserve, announced a $330 billion expansion of currency swap arrangements, which allows them to increase the amount of money they can provide in their home markets, effectively throwing more money at the crisis.
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. S" S3 C* u2 U5 f1 L3 t& X" |The Wachovia deal is the latest in a series of events that has transformed the American financial landscape and wiped out hundreds of billions of dollars of shareholder wealth.3 m$ E7 y( L: L0 q" k( Z
% P' I# R9 P- H/ t) Q# O0 o8 EThe changes include the government takeover of mortgage finance companies Fannie Mae FNM.P and Freddie Mac FRE.P, the bankruptcy of Lehman Brothers Holdings Inc, the failure of giant savings and loan Washington Mutual, and Bank of America Corp's purchase of Merrill Lynch & Co Inc.
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