London Shares Fall as Bail-out Euphoria Gives Way to Slowdown Fears
THE TELEGRAPH: Shares in London fell as a two-day global rally faltered as the euphoria surrounding a £2 trillion worldwide effort to bail out banks and reinvigorate lending was replaced by growing fears over corporate profits and the possibility of a recession.

The FTSE 100 index of leading shares opened down 35 points - or around 1 per cent - at 4352 as grim reality hit stock markets following a week of rollercoaster boom and bust culminating in huge rises on Monday and Tuesday.

"After a bumper start to the week, the inevitable reversal for equity markets does seem to be underway but there's certainly no real belief so far that this will mark the end of the rally at least in the short term," said Matt Buckland, trader at CMC Markets.

Financial stock were the main risers with Lloyds TSB up 7.5pc, HBOS 3.9pc and Royal Bank of Scotland 1.1pc. Concerns of a global slowdown saw miners fall further.

Asia followed Wall Street down. Tokyo's Nikkei index, which was down 1.4 per cent before lunch follwing its record 14 per cent rise on Tuesday, perked up in the afternoon to trade up 1pc.

But Hong Kong's Hang Seng Index was down 2 per cent, while Australia's S&P/ASX 200 index was down 0.8 per cent, New Zealand's benchmark NZX-50 index 3.9pc, and South Korea's Kospi index 2 percent.

Overnight, the Dow Jones index in New York had fallen 76.6, or 0.8 percent, to 9,311, after a record gain on Monday in advance of President George W. Bush's announcement of a $250 billion bank bail-out package. London Shares Fall as Bail-out Euphoria Gives Way to Slowdown Fears >>> By Richard Spencer in Beijing and Danielle Demetriou in Tokyo | October 15, 2008

THE TELEGRAPH:
Era of Self-regulation Is Over, European Commission Warns: The European Commission has warned the business community that the "ideology" of self-regulation is dead and that more rules are required at both the European and global level. >>> By Richard Tyler in Brussels | October 14, 2008

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Bush Warning over Bailout Delay
George Bush says the cost of not acting will be higher than the $700 billion rescue deal >>>
BBC: US President George W Bush has warned the US economy is at a "critical moment", and vowed to get his Wall Street rescue plan through Congress.

He said the consequences would be "painful and lasting" if the $700bn (£380bn) deal rejected by the US House of Representatives was not passed.

He offered reassurances to citizens of the US and wider world that the current political deadlock would be resolved.

The New York stock market rallied strongly after Mr Bush's statement.

The Dow Jones index closed up 4.7%, recouping some losses from Monday's rout.

European stocks bounced up and down, while most Asian markets finished the day down.

The European Union earlier urged Washington to act and solve the credit crisis, amid fears America was lurching towards a financial crisis unmatched since the 1930s Great Depression. Bush Warning over Bail-out Delay >>> | September 30, 2008

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$US700b Bailout Deal Voted Down
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

Watch BBC video: Henry Paulson reacts to the failure of the rescue package >>> | September 29, 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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Bush Says Bail-out Will Be Passed
George W Bush courtesy of the BBC. What does his facial expression tell YOU?
BBC: President George W Bush has said that legislators will "rise to the occasion" and pass the proposed $700bn (£380bn) Wall Street rescue plan.

He said disagreements remained as "the proposal is big and the reason it's big is because it's a big problem".

Senate Majority Leader Harry Reid, a Democrat, said lawmakers would stay in session until a deal was reached.

But rebel Republicans remain unhappy at the plan to buy mortgage-backed assets from US banks.

However there were some positive signs later on Friday, when Democratic House of Representatives Speaker Nancy Pelosi said progress was being made on a financial rescue bill.

She said Congress was "back on track" in its efforts, and that lawmakers would continue to work over the weekend to reach agreement.

And Barney Frank, Massachusetts Democrat Representative and chairman of the House Financial Committee, said: "I am convinced that by Sunday we will have an agreement that people will understand on this, on this Bill". Bush Says Bail-out Will Be Passed >>> | September 26, 2008

Watch BBC video 1: President Bush on the ongoing bail-out talks >>>

Watch BBC video 2: Senators Harry Reid and Chris Dodd lay out their terms >>>

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America Cries for Financial Help: Germany Cocks a Snook
SPIEGELONLINE INTERNATIONAL: The US government is buying bad debt for $700 billion. Now Washington is asking other countries to jump in and help, too, but the Germans are bowing out. Believing that the rescue package sends the wrong signal, experts from the country's leading economics think tanks argue it's the right call.

It's not a call for assistance; it's a scream for help. US Treasury Secretary Henry Paulson is asking other countries to help buy up bad US debt. The US government is putting up $700 billion in taxpayer money in the hopes that the measure might restore stability in the financial system. Some countries are planning to help. But the German government has answered this call quickly and clearly: no.

Economics experts think that's the right response. As they see it, in the long run, those responsible for the crisis -- who have been cashed out with high salaries and bonuses for years -- will not be penalized for billions "but will be let off the hook like everyone else," says Carsten Meier of the Kiel Institute for the World Economy (IfW). According to Meier, by injecting capital into the market, the US government is putting everyone who speculated and lost back on their feet and thereby standing in the way of a market cleanup.

Paulson has stated that the US government will pay a fair price for the bad debt, which Meier sees as sending "precisely the wrong signal," adding that "people shouldn't be rewarded for taking such high risks." Meier also finds Germany's decision to sit out any bailout operation to be the right move. "The financial crisis is primarily a problem in America," Meier says. As he sees it, the fact that Germany and Europe are far less affected that the US justifies European reluctance. "The stability of the German banking system is not in danger," Meier points out as he explains why he believes Europe shouldn't provide any funds. "The world shouldn't have to bear the burden for America's lapses." 'The World Shouldn't Have to Bear the Burden for America's Lapses' >>> By Corinna Kreiler in Hamburg | September 23, 2008

BBC:
Paulson Eyes Rescue Plan Backing: US Treasury Secretary Henry Paulson has urged a key Congressional hearing not to delay a $700bn (£382bn) bail-out of the US banking system.

Mr Paulson told the Senate Banking Committee that the personal savings of US citizens are at risk if the rescue plan is not implemented.

The Treasury wants unlimited authority to buy back the bad debt that is clogging the financial markets.

Fed chairman Ben Bernanke has backed him by saying urgent action is needed. >>> | September 23, 2008

Watch BBC video: Henry Paulson on the plan to rescue the US economy >>>

BBC:
What Would Financial Armageddon Look Like? >>> By Anthony Reuben, Business reporter, BBC News | September 23, 2008

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