Monday, September 29, 2008

House Rejects Bailout Plan, Markets Crash

The House of Representatives voted today to reject the $700 billion economic bailout plan, which was intended as a compromise measure that would be supported by both Democrats and Republicans. As a result, according to CNN Money, the economy lost $1.2 trillion in value. The Dow Jones dropped about 7%; the Nasdaq Composite and the S&P 500 both skidded about 9%.

The drop, one of the worst in history, was precipitated by fears about the vote in the House and worsened by the news that Wachovia sold some of its assets to Citigroup. Several European banks went under; some were federalized (as in the case of Britain's Bradford and Bingley), and others recieved AIG-style bailouts (as in the case of Dutch-Belgian Fortis), according to CNN Money.

Markets worldwide have tumbled, again spurring fears of a depression. There is still hope that the market will normalize after a short period of instability, but given the rapidly-changing situation, it is impossible to forecast accurately.

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