Stocks fall when bailout plan fails

Stocks fall when bailout plan fails

POSTED 09/30/2008 - The financial markets took a tumble Monday on the heels of the failed vote on the financial bailout package. The Dow Jones industrials dropped down as much as 705 points as stocks plunged when it became clear that lawmakers would vote down the $700 billion emergency rescue plan.

"We need to put something back together that works," said Treasury Secretary Henry Paulson said as he headed into an emergency strategy session at the White House.

The legislation would have allowed the government to buy bad mortgages and other bad assets held by troubled banks and financial institutions. Getting those debts off their books should bolster those companies' balance sheets, making them more inclined to lend and ease one of the biggest problems in the national credit crisis, in turn, helping the economy.

Most analysts say that with thousands of calls and email opposing the measure, many lawmakers, especially those up for reelection shortly were not willing to take the risk of voting for the bailout plan. However, those same analysts say the worsening financial market and the possibility of more failed banking institutions could make that a risky political move.

The U.S. Chamber of Commerce said opponents of the bailout would pay for their stance.

"Make no mistake: When the aftermath of congressional inaction becomes clear, Americans will not tolerate those who stood by and let the calamity happen," said R. Bruce Josten, the Chamber's top lobbyist, in a letter to members.