US Law Makers reject $700 billion bailout plan
The US House of Representatives voted 228-to-205 against $700 billion bailout plan for the investor banking sector and financial industry. This shock vote sent global markets into a tailspin. The European government authorities hurried to pull up their banks which are sliding and facing closure.
The Dow Jones industrial average had a major downfall and the benchmark S&P 500 had an 8.8 per cent drop.
Latin American stocks crashed by 13 per cent. Meanwhile, Asian and European markets had tumbled down fearing a major world-wide crisis as US big bank Wachovia crashed. Global financial markets were frozen though the central banks poured hundreds of billions of dollars into the financial system to encourage financial firms to stop holding cash and start lending.
President George W Bush was closeted with Ben Bernanke, Federal Reserve Chairman and other economic advisers to consider crisis management measures.