WORLD> America
|
WORLD> America
|
|
Senate weighs bailout; Europeans split
(Agencies)
Updated: 2008-10-02 09:05 NEW YORK/WASHINGTON -- World markets braced for a US Senate vote on Wednesday over a proposed $700 billion bailout seen as crucial to reviving paralyzed credit markets while European powers squabbled over their own version of a rescue. US President George W. Bush said he was confident the Senate would pass the bill with a vote due for some time after 7:30 p.m. EDT (2330 GMT). Passage would set the stage for a second vote in the House of Representatives, probably on Friday. A slack-jawed financial world came to a halt on Monday while watching the House reject a previous version of the bill, sending global markets into tailspin after weekend negotiations on Capitol Hill had been expected to ensure passage.
Central bankers and pensioners worldwide were counting on the rescue plan to empower the US Treasury to buy distressed assets from financial firms staggering under the weight of failed mortgages, intending to clean up their balance sheets and jump-start lending. Congressional leaders added two sweeteners to the bill -- a tax cut and extended federal protection for bank deposits -- with the expectation it would sail through the Senate and then return to the House for an up-or-down vote. The White House and European policy makers called the measure crucial to world financial health with recessionary signals mounting in the world's largest economy and the credit crisis reverberating among European banks. US factory activity shrank in September to its lowest since the 2001 recession and major automakers reported plunging US sales for September, led by a 34 percent slide at Ford Motor Co. In Europe, France and Germany clashed over the idea of a US-style financial rescue fund for Europe amid further signs of contagion from the global credit crisis. Italy's UniCredit became the latest bank under scrutiny after backing away from its 2008 earnings targets. Buffett to the Rescue The US vote would cap another whirlwind day in the markets in which shares of bellwether US conglomerate General Electric Co plunged as much as 9 percent on concerns about future earnings until super-investor Warren Buffett took a $3 billion stake. It marked the second time in eight days Buffett came to the rescue of a corporate giant. One of America's most famous investors and among the richest men in the world, Buffett said last week he would invest $5 billion in Goldman Sachs Group Inc. The S&P 500 closed down 0.45 percent, suggesting equity investors expected the bailout to pass, but they had also expected the House to approve the plan on Monday. |
