30 Sep 2008

Wall St bailout bill in jeopardy

7:07 am on 30 September 2008

The US House of Representatives is holding open its vote on a $US700 billion financial rescue plan well after the allotted time expired.

A majority has voted against the bill.

If those votes hold when the vote closes, the bill will die. At 1:55pm (1755 GMT) on Monday, 226 lawmakers had voted against the bill and 207 had voted in favor.

US stocks have plunged. The euro and the British pound tumbled against the dollar and crude oil prices dropped nearly 8% to under $US99 a barrel. Gold jumped as much as 2.8%.

Shortly before 2pm (1800 GMT) on Monday, the Dow Jones industrial average was down 494.85 points, or 4.44%, at 10,648.28.

Standard & Poor's 500 Index was down 72.69 points, or 5.99% , at 1,140.32. The Nasdaq Composite Index was down 135.36 points, or 6.2%, at 2,047.98.

Passage urged by President

President George Bush earlier urged the House to pass the bill and send a strong signal to the markets.

However, he warned that it would not answer all economic woes and that some difficulties would remain.

Leaders of the US Senate intend to put the bail-out to a vote on Wednesday.

If approved by the Senate and House, the revised plan will lead to the biggest intervention in the markets since the Great Depression in the 1930s.

The BBC reports time is of the essence, not only to end a log jam in financial markets, but also because of the election timetable in the United States.

The US Congress was supposed to go into recess last Friday. With presidential and congressional elections on 4 November, politicians are keen to hit the campaign trail with a resolution to the crisis under their belt.