KEY POINTS:
Here is some of the reaction to the collapse on Wall St after the failure of the Bush bank bail out plan.
New York Times:
"In a moment of historic import in the Capitol and on Wall Street, the House of Representatives voted on Monday to reject a $700 billion rescue of the financial industry. The vote came in stunning defiance of President Bush and Congressional leaders of both parties, who said the bailout was needed to prevent a widespread financial collapse.
Stock markets plunged as it appeared that the measure would go down to defeat, and kept slumping into the afternoon when that appearance became a reality."
New York Times Chief Financial Correspondent Floyd Norris
So much for party discipline. This bill was supported by John McCain and Barack Obama, the presidential candidates who, between them, have the support of nearly every member of the House.
But a majority of the House voted along with Bob Barr, the Libertarian who said, "We need to make Wall Street take the hit for its irresponsible investment decisions."
The banking industry is in trouble with or without this bailout. Its efforts to change accounting rules to hide its problems are sad and appalling.
Washington Post economist Robert Samuelson
What we are witnessing, in the broadest sense, is the bankruptcy of modern economics. Its conceit has been that we had solved the problem of stability. Oh, there would be periodic recessions, but the prospects of a major economic collapse were negligible because we knew how the system worked and could take steps to prevent it. What's been so unsettling about the present crisis is that it has not conformed to the standard model of business cycles and has not submitted to familiar textbook solutions.
Washington Post Capitol Briefing
So how could a major bill described by the president and both parties' leaders as critical to the well-being of the nation's - and the world's - economy go down to defeat?
Among them:
1) Poor Salesmanship.
2) Vulnerable Politicians Scared.
3) Bush the lame duck
4) Ideological Problems.
5) Partisanship
Wall Street Journal
"Immediately after the $700 billion rescue plan failed, the blame game began. Choose your political scapegoat because there's plenty to go around.
The Wall St Journal's own Washington Wire takes a look at the House Republicans that say Democratic House Speaker Nancy Pelosi's partisan speech is the reason the bill failed. "House Minority Leader John Boehner (R., Ohio) said that Pelosi's speech 'poisoned' the Republican caucus and 'caused a number of members we thought we could get to go south,'" writes Patrick Yoest."
Los Angeles Times
The two presidential candidates, Barack Obama and John McCain have now launched attacks on each other for the failure of the bill, reports the Los Angeles Times.
"The shock of the House of Representatives' failure to pass a $700-billion bailout of Wall Street was felt on the campaign trail today as the presidential candidates sparred in battleground states over each other's capacity for leadership.
At a rally in Ohio, Republican John McCain accused rival Barack Obama of failing to show any leadership during the congressional negotiations over the bailout, which fell short in the House today. Democrats and Republicans blamed each other for the bill's defeat."
The Economist
Congress had moved by its own standards at light speed to prepare the bill, said The Economist.
"The bill had been widely expected to pass. Legislators from both parties wrung concessions from Hank Paulson, the treasury secretary, to provide necessary political cover. But voters seemed unconvinced. In a USA Today/Gallup Poll conducted on September 24th just 22 per cent favoured Mr Paulson's proposal while 56 per cent wanted something different; only 11 per cent preferred that no action be taken."
Times
The bail-out is now in "chaos" after a "shock" vote in the House of Representatives, reports the Times.
The paper labelled this morning's vote as a "scene of high drama".
"Republican leaders later admitted they had underestimated the unhappiness among their members before the vote but claimed that the Democrats were more to blame," the paper reported.
Guardian
The Guardian newspaper said the vote "collapsed in disarray".
It said the vote was now "spreading ripples of shock through the global financial markets".
"On Wall Street, there were audible groans as traders gathered around television monitors to watch the vote playing out," reported the paper.
Independent
The Independent reports that the British shadow chancellor George Osborne said the situation has to be stabilised and politicians must reflect on what caused the economic "wreckage".
It reports Mr Osborne telling Channel 4 News: "The task at hand on a day like this is to work out what we can do to stabilise the situation, what the American government can do now they have lost the vote in Congress - although perhaps there will be some way of keeping the vote open, I know it is a fast emerging situation there.
"And then we will all have to consider how we allowed over 10 years an economy built on debt in the US, but even more so in Britain, to leave us with the wreckage we see today."
Daily Telegraph
The Daily Telegraph reports British investors are bracing themselves "for further sharp falls following a day of turmoil in which the London stock exchange suffered one of its biggest ever daily drops".
"The London stock market fell by more than five per cent on Monday - the biggest one-day fall in the current crisis and the eighth worst ever. The pound also recorded its biggest one day fall in more than 15 years amid growing fears over the state of the British economy," the paper reported.
