Bailout is law
President Bush signs historic $700 billion plan aimed at stemming credit crisis.

NEW YORK (CNNMoney.com) -- After two weeks of contentious and often emotional debate, the federal government's far-reaching and historic plan to bail out the nation's financial system was signed into law by President Bush on Friday afternoon.

"By coming together on this legislation, we have acted boldly to prevent the crisis on Wall Street from becoming a crisis in communities across our country," Bush said less than an hour after the House voted 263 to 171 to pass the bill.

The House vote followed a strong lobbying push by the White House and other supporters of the bill. The House rejected a similar measure on Monday - a defeat that shocked the markets and congressional leaders on both sides of the aisle.

The law, which allows the Treasury Secretary to purchase as much as $700 billion in troubled assets in a bid to kick-start lending, ushers in one of the most far-reaching interventions in the economy since the Great Depression.

That's 700, 000, 000, 000 AT ONE TIME. Nothing to say how many times this can be done, no expiration date. N_O_T_H_I_N_G.


House Roll Call: How they voted on bailout bill




U.S. Stocks Drop as Recession Concern Outweighs Bailout Passage

Oct. 3 (Bloomberg) -- U.S. stocks slid, capping the worst week for the Standard & Poor's 500 Index since the 2001 terrorist attacks, on concern the $700 billion bank bailout isn't enough to unlock credit markets and prevent a recession.

Now, wait a minute. Weren't we told the real reason we needed the bailout was not just to rescue these companies, but to reassure investors and stop the stock market from sliding?



Wells Fargo, not Citi, to buy Wachovia

NEW YORK: In a stunning reversal, Wachovia said Friday that it planned to be acquired by a rival bank, Wells Fargo, for about $15.1 billion in stock.

The announcement came four days after Citigroup believed that it had cemented a deal with Wachovia to buy most of its banking operations for $1 a share, or $2.2 billion, in a deal brokered by federal regulators. With Wachovia on the brink of collapse, the government agreed to cover any losses above $42 billion, an indication of the urgency of regulators to get a deal done.

But Wachovia has now apparently rejected Citigroup in favor of Wells Fargo in a deal that calls for Wells Fargo to buy all of Wachovia for $7 a share and requires no assistance from the federal government. Wachovia customer deposits would be protected in both deals.

California May Ask U.S. for Loan

LOS ANGELES — California, the nation’s most populous state and the world’s sixth-biggest economy, has warned the Treasury Department that it may need a $7 billion emergency loan from the federal government because it is running out of cash and has not been able to borrow more.

State officials said they hoped that the $700 billion federal bailout of the financial system approved by the House of Representatives on Friday would help open credit markets that have balked at providing the kind of short-term financing California and other states and local governments routinely rely on to keep operating.

But Gov. Arnold Schwarzenegger, a Republican, said at a news conference on Friday that the state “is not out of the woods yet” and in a few weeks could run out of cash to pay for basic services.

159,000 Jobs Lost in September, the Worst Month in Five Years

The American economy lost 159,000 jobs in September, the worst month of retrenchment in five years, the government reported on Friday, amplifying fears that an already painful downturn had entered a more severe stage that could persist well into next year.

Employment has diminished for nine consecutive months, eliminating 760,000 jobs, according to the Labor Department’s report. And that does not count the traumatic events of recent weeks, as a string of Wall Street institutions collapsed, prompting the $700 billion emergency rescue package approved by Congress on Friday.

“It’s a dismal report, and the worst thing about it is that it does not reflect the recent seizure that we’ve seen in the credit markets,” said Michael T. Darda, chief economist at MKM Partners, a research and trading firm in Greenwich, Conn. “There’s really nothing good about this report at all. We’ve lost jobs in nearly every area of the economy, and this is going to get worse before it gets better because the credit markets have deteriorated basically on a daily basis for the last few weeks.”