House of Representatives voted down a $700 billion plan

House Rejects Bailout Bill; Wall Street Shudders
by Dina Temple-Raston

In a shocking defeat that rocked Wall Street, the House of Representatives voted down a $700 billion plan aimed at rescuing banks and unfreezing the world's credit markets.
The news of the 228-205 defeat sent the stock market reeling. The Dow Jones industrial average recorded its biggest closing point drop in history, closing down 777.68 points — or nearly 7 percent — to 10,365.45.

Treasury Secretary Henry Paulson spoke to reporters at the White House after a discussion with President Bush aimed at mapping out the way forward. He said he would keep working to get a bill. "We need to work as quickly as possible," Paulson said. "We need to get something done. We need to put something back together that works."

Market analysts said Paulson and the Bush administration more generally were at least partially to blame for stirring up the sturm und drang that ended with Monday's stock market plunge.
The Bush economic team has been saying for weeks that the financial world as we know it would end if a rescue plan was not put in place in short order. So when the bill failed in the House, investors naturally ran for the closest exits. For all his doom-casting after the vote, Paulson did inject a faint note of confidence. He said the banking system so far "has been holding up very well, considering all of the pressures." [NPR}

Read the complete story.