Dow falls nearly 7 percent in wake of House bailout defeat

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By Kevin G. Hall
McClatchy Newspapers

WASHINGTON — Congressional leaders and the Bush administration vowed to revive a $700 billion Wall Street rescue after rebellious Republicans defied their leadership and killed the controversial plan Monday.

The surprising demise of a bill that had been the subject to intense neogtiations for days sent U.S. and global financial markets plunging. The Dow closed down 778.68 points, a nearly 7 percent drop. It was the largest one-day point drop in history, but as a percentage it fell below other historic declines.


McClatchy Washington Bureau | 09/29/2008 | Dow falls nearly 7 percent in wake of House bailout defeat.


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5 thoughts on “Dow falls nearly 7 percent in wake of House bailout defeat

  1. Stocks are just way overpriced, like houses, and both need to fall substantially farther. As I said with more detail in my blog this morning:

    “… What’s underway is simple Market Justice. Artificially inflated prices can’t be sustained forever — not for $700 billion or any amount of cash.

    “For years and years, the housing bubble fed the stock bubble and vice versa. Far too much money poured into both asset classes, so this isn’t a problem more money will solve.

    “In every speculative market, there comes a time when those who bought too high get rebuked by reality. Wall Street doesn’t like reality any more than homeowners who paid too much do, but the fall has to happen. It’s healthy.

    “Just as the housing market will recover when the median price of a home regains its logical relationship with the median household income, stock prices will stabilize at a level that reflects their fundamental value. Trying to keep these prices unreasonably elevated by any sort of heroics is destined to fail …

    “Nobody’s ever happy about losing paper wealth, but that doesn’t mean it can or should be sustained forever.”

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  5. i honestly can say I saw this coming and I got out a long time ago, that being said, I hope this situation fixes itself soon, but I just do not see it.

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