The Economist: Into the land of the unknown

Global market turmoil continues after the rejection of the mortgage-rescue plan in America
Sep 30th 2008
LONDON, NEW YORK, WASHINGTON, DC

HOW many votes in Congress will the latest financial upheaval change? That is the calculus underway in Washington, DC, after the House of Representatives defeated the proposed $700 billion mortgage-rescue plan by 228 to 205 on Monday September 29th. Democrats backed it by 140 votes to 95, while Republicans opposed it by 133 to 65.

Bankers had been under no illusions that the tweaked Paulson plan would cure all the financial system’s ills. But most had seen it as a step in the right direction, and had expected it to pass. Its rejection sent stockmarkets into freefall. The Dow Jones Industrial Average finished down by 7%, and suffered its biggest-ever points loss. Perhaps fittingly in an economy that is in danger of sliding into depression, the only stock among the 500 in the S&P index that finished higher was Campbell’s Soup. The S&P closed 29% below its peak. Reflecting fears that consumer demand will wilt, shares of Apple Computer, creator of the iPhone, fell by 18%. The rout continued in Asia, but shares rebounded in Europe on Tuesday morning on hopes that the bill would eventually pass. the rest image

MarketWatch: Bush says it's critical to pass financial rescue soon

NYT: Mixed Markets Reflect Hope for Bailout

Reuters: U.S. turmoil fails to carry through to Europe

Boston Globe: Public angry, anxious

Washington Post: Analysis: House vote against bailout wounds McCain

Boston Globe: Unknown terrain for economy

BBC: Failure of US rescue plan hits European shares