The stunning defeat of the proposal on a 228-205 vote after marathon talks by senior Congressional and Bush administration officials lowered a fog of uncertainty over economies around the globe. Its authors had described the measure as essential to preventing widespread economic calamity.
The markets began to plummet even before the 15-minute voting period expired on the House floor. For 25 more minutes, uncertainty gripped the nation as television showed party leaders trying, and failing, to muster more support. Finally, Representative Ellen Tauscher, Democrat of California, pounded the gavel and it was done.
It’s somewhat ironic that the rejection of the (admittedly very flawed) bailout plan has already cost more in one day than the $700 billion price tag. Yesterday’s vote wiped out $1.2 trillion from the stock market.
Dennis Berman of the Journal has a great column explaining just why the problems on Wall Street are about to waylay the economy. Get ready for a rash of layoffs.
Well, it was just five days ago that I wrote this:
It wasn’t so long ago we were hearing about what bad shape the banking industry was in—Citigroup, Wachovia, Washington Mutual, etc. Now they’re being presented as pillars of strength and saviors to Wall Street’s investment banks.
Two of those three have been seized by the government since. Good thing Morgan Stanley didn’t agree to let Wachovia but it.
Meanwhile, the contagion continues to grow stronger around the globe, as well. Europe bailed out its fourth bank in the last few days.
Wonkette points out that Campbell’s Soup was the only stock in the S&P 500 to rise in yesterday’s bloodbath after it had recommended readers load up on canned goods. Not such a bad idea!Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at firstname.lastname@example.org. Follow him on Twitter at @ryanchittum.