SYDNEY MORNING HERALD: Wall Street's benchmark Dow index has suffered its worst single-day points hit ever after a $860 billion ($US700 billion) financial bailout package failed to pass the US House of Representatives.
The Dow lost about 778 points, or 6.98%, posting its biggest daily percentage decline since the October 1987 stock market crash, while the benchmark S&P 500 also had its worst day in 21 years after the House sent the bailout plan to defeat by a vote of 228 to 205. The tech-heavy Nasdaq had its worst day since April 2000 when the Internet bubble collapsed.
Market fear was deep and widespread, as investors dumped stocks for the relative safety of US government bonds. The Chicago Board Options Exchange Volatility Index, Wall Street's main barometer of investor fear, jumped 39% to 48.40, a nearly six-year high, and was at 46.72 at the close.
''I am shocked. Credit markets were struggling even with the prospect this bill was going to get passed. Now the bill doesn't get passed and it just throws one more monkey wrench into the mix,'' said Bob Doll, global chief investment officer of equities at BlackRock Inc, one of the world's largest asset managers.
The failure of the bailout bill means the US Treasury now has very limited capacity to bailout firms in the future, and economists are predicting that credit markets will seize up, preventing businesses and people from getting loans for ordinary day-to-day business activities, for college fees, for cars, and for appliances as well as for housing. Consumer and business interest rates are likely to rise sharply. $US700b Bailout Deal Voted Down >>> Anne Davies, Washington | September 30, 2008
SYDNEY MORNING HERALD:
Dollar Hammered as Bailout Voted Down >>> | September 30, 2008
TIMESONLINE:
US Banking Bailout in Chaos after Shock House of Representatives Vote: The financial system lurched closer to a catastrophic breakdown tonight after the US Congress dramatically rejected a bailout plan designed to restore confidence to paralysed banks.
Wall Street suffered one of its worst days in history. In 24 hours five banks across the West, including Britain’s Bradford & Bingley, had to be rescued to avoid insolvency.
With plans for the biggest rescue of Wall Street since the Great Depression in tatters, the Dow Jones industrial average of shares dived almost 800 points, losing 7 per cent of its value. It was the worst one-day points fall and the worst percentage fall since Black Monday in 1987. >>> | September 30, 2008
THE GUARDIAN:
Panic grips world's markets: Shock as American rescue plan rejected on a day of nationalisations and bail-outs >>> Andrew Clark in New York | September 30, 2008
THE TELEGRAPH:
Asian Shares Fall after US Rejects Bail-out Plan: Asian markets slumped as fears of escalating financial turmoil triggered panic selling after US politicians unexpectedly rejected a financial rescue plan. >>> By Jessica Salter | September 30, 2008
THE TELEGRAPH:
US Economy: $700 billion Wall Street Bail-out Rejected on Meltdown Monday 2: The $700 billion bail-out to save the global financial system from potential collapse has been rejected by US politicians. >>> By Robert Winnett | September 30, 2008
LE FIGARO:
Plongeon historique de Wall Street : La Bourse de New York a lourdement chuté, après que les places européennes ont accusé le coup de plusieurs déroutes bancaires.
Le scénario catastrophe se réalise. La Chambre des représentants a rejeté hier le plan Paulson, censé sauver le système bancaire américain de l'implosion. Wall Street, pris par surprise, a très mal réagi. L'indice Dow Jones a connu un plongeon historique (en points). Il a reculé de 6,98 %, le Nasdaq de 9,14 % et le S&P 500 de 8,81 %.
Le plan prévoyait l'octroi au Trésor américain de 700 milliards de dollars pour financer un programme de rachat d'actifs bancaires dévalorisés. Hier matin encore, le président Bush avait imploré les députés américains de surmonter leurs doutes à l'égard de ce plan et de se ranger derrière les leaders des deux partis qui s'y étaient finalement ralliés.
Hier soir, le secrétaire au Trésor, Henry Paulson, visiblement frustré par la fronde des élus, a expliqué qu'il continuerait de « travailler avec les législateurs. L'enjeu est trop important pour que l'on abandonne. Nous cherchons le moyen de faire passer quelque chose le plus vite possible ».
La crainte des autorités américaines est désormais que les marchés de crédit soient paralysés du fait du manque de confiance dans la solidité de banques dont les bilans sont accablés de créances immobilières douteuses. « Les marchés de crédit vont se retrouver encore plus paralysés », estimait à chaud Bill Gross, patron de Pimco, le plus grand fonds obligataire du monde. Un tel scénario perturberait gravement le fonctionnement des systèmes de paiement, provoquerait des faillites de banques et d'entreprises et plongerait vite l'Amérique dans une grave récession. >>> Pierre-Yves Dugua (à Washington) | 30.09.2008
TORONTO STAR:
Capitalism in Limbo as Renegades Kill Bailout: In a stunning rebuke to U.S. President George W. Bush and GOP presidential candidate John McCain, Republicans in the U.S. House of Representatives, joined by many Democrats, yesterday killed a bailout scheme promoted by the administration to rescue a U.S. financial system in paralysis.
Stock markets predictably nose-dived on the news, with Toronto suffering some of the greatest damage.
The S&P/TSX, heavy with energy stocks, was dealt a double whammy, suffering one of its largest one-day declines on record, at 6.9 per cent, on worries about the unresolved world capital crisis and yesterday's $10.52 (U.S.) collapse in oil prices, to $96.37 a barrel.
(Oil is now down 35 per cent from its July peak.)
Bush and McCain put their political capital on the line to gain passage of the Bush-sponsored $700-billion bailout plan, which would have enabled the U.S. Treasury Department to begin purchasing soured, or "toxic," mortgage and other loans from U.S. banks – a move designed to increase their solvency so they can resume business as usual.
Yet, despite exhortations from Bush, who twice has addressed the nation on the urgent need for passage of the rescue package, and from McCain, who stayed in the capital over the weekend making calls to recalcitrant Republican members of Congress to win their reluctant support for the bailout bill, 133 GOP and 95 Democratic members of the House joined to defeat the bill in a 228-205 vote. >>> David Olive | September 30, 2008
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