700 Billion bailout fails to pass in lower house

From Share Investor Blog

News just in that the 700 billion bailout has just failed a vote in the House:

The fate of a controversial $700 billion financial bailout plan was in doubt Monday as a House vote turned against it.

The next steps were not immediately clear but supporters were scrambling to put it up for another vote.

What was supposed to be a 15-minute vote stretched past the half-hour mark as leadership scrambled for support. Investors who had been counting on the rescue plan sent the Dow Jones industrial average down as much as 700 points while watching the measure come up short of the necessary support, before rebounding slightly. The key stock reading was down more than 500 points.

The measure needs 218 votes for passage. Democrats voted 141 to 94 in favor of the plan, while Republicans voted 65 to 133 against. That left the measure with 206 votes for and 227 against.

CNN Money

It doesn't mean the rescue package is necessarily over, it will probably go back to the house in a modified way but it does mean that markets are reacting badly and are in a worse position than they would if a rescue package wasn't announced.

This is because if anything else, apart from the actual dire situation the financial sector is in, markets hate uncertainty.

The DOW is down 710 points as a result as at 8.33 am(NZ Time)

I expected a bigger plunge but the market still has 27 minutes of trading before close.

c Share Investor & Political Animal 2008