EU Leans On U.S. To Fix Financial Crisis

Urges American Lawmakers To Take "Responsibility" As Uncertainty Plagues Global Markets

(CBS/AP)  The European Commission on Tuesday urged the United States to show "statesmanship" in the financial crisis for sake of world economy.

EU Commission spokesman Johannes Laitenberger said the EU was disappointed the U.S. House of Representatives rejected the $700 billion rescue package for the financial markets and added Washington had a "special responsibility" toward the global economy.

Europe's half-plea-half-demand came after a turbulent morning for markets around the globe, as weary investors tried desperately to read the tea leaves left on the abandoned negotiating table on Capitol Hill.

Unsure when U.S. lawmakers might pass legislation to shore up the floundering American financial markets, traders across the globe threw shares overboard at their respective trading floors opened.

Much of the initial loss was recouped later in the day, as traders moved to snap up shares deemed oversold and undervalued.

With the House not scheduled to meet again until Thursday, congressional leaders and Bush administration officials promptly sought to assess what types of changes could win over enough votes to guarantee success.

U.S. President George W. Bush planned to make a statement on the rescue plan at 8:45 a.m. EDT Tuesday.

Britain's benchmark stock index, the FTSE 100, fell by as much as 3 percent in early trading, with particularly sharp declines in the banking sector. But the index of 102 companies then recovered, trading down only 0.15 percent at 4,811.33 by late morning.

Germany's benchmark DAX index fell by nearly 1 percent to 5,756.87, while the Paris CAC-40 was barely down 0.20 percent at 3,946.00. Meanwhile, Russia's regulator was forced to halt regular trading in its two major markets on Tuesday morning after stocks plunged in the opening minute of trading.

In Ireland, however, the government successfully bucked the downward trend by guaranteeing all the deposits and borrowings - worth around 500 billion euros (US$717 billion) - of six of the country's major lenders. Ireland's ISEF Index of financial shares surged by as much as 25 percent on the back of the guarantee, before settling to a rise of 12 percent by midmorning.

Some analysts were crediting Ireland's unprecedented move with helping to keep European stocks overall from falling nearly as much as stocks in the United States and Asia did.

"The Irish government's blanket insurance could form a template for a European approach to this crisis," said Rob Carnell, London-based chief international economist at ING Financial Markets.

In Asia, most major stock markets fell Tuesday in stunned dismay over U.S. lawmakers' rejection of the bailout plan.

Markets across Asia tumbled sharply as they opened amid fears that the setback could lead to a broader global financial crisis. But as trading progressed, many indices erased losses and Hong Kong's market staged a dramatic turnaround to close slightly higher as investors scooped up beaten-down shares.

Japan's benchmark Nikkei stock 225 index slumped 4.12 percent to close at 11,259.86 - the lowest level since June 9, 2005. In Australia, the S&P/ASX-200 index fell 4.3 percent after falling as much as 5.3 percent.

The bailout bill's failure dealt a "severe blow to Asia markets right after the Lehman shock," said Mitsushige Akino, fund manager at Ichiyoshi Investment Management in Tokyo, referring to the collapse earlier this month of the U.S. investment bank.

"Many investors grew even more cautious because of the latest development over the bill, and they only see passage of the bill as a minor improvement to the crisis," he said.

Some markets bounced back. Hong Kong's Hang Seng index gained 0.76 percent to close at 18,016.21 after earlier plunging more than 5 percent. India's Sensex was up 2.4 percent in afternoon trading.

Investors were stunned by the U.S. House of Representatives' rejection Monday of a $700 billion emergency bailout package that would have allowed the government to buy bad mortgages and other sour assets held by troubled banks and other financial institutions.

With elections in November, many lawmakers were unwilling to take the political risk of supporting a measure that many American voters see as an undeserved bailout for rich, reckless investment bankers.

"This is a bad development," Australian Prime Minister Kevin Rudd told reporters in Australia's capital, Canberra. He urged U.S. lawmakers to urgently return to negotiations to come up with a deal that will prevent further infection of world markets.

In New York, the Dow Jones industrial average plunged 777 points, its biggest ever single-day drop, or nearly 7 percent, to 10,365.45, its lowest close in nearly three years.

Japanese Prime Minister Taro Aso urged the country's financial officials to closely monitor the situation and take appropriate measures to protect the world's No. 2 economy, according to Kyodo News agency.

"We have to respond appropriately in order not to affect the Japanese economy and to prevent the financial system from falling apart," Aso was quoted as saying.

Japan's banks have relatively little exposure to the bad mortgages at the core of the global credit crisis, but investors are worried that a slowdown in the U.S. and global economy will hurt demand for exports.

The Bank of Japan on Tuesday morning pumped another 3 trillion yen (US$28.7 billion) into money markets, as part of efforts by central banks worldwide to boost liquidity and bolster interbank lending. That brings the BOJ's total injection to 21 trillion yen (US$200.6 billion) since the collapse of Lehman Brothers Holdings Inc. earlier this month.

The chaos sapped the dollar overnight. The greenback was trading at 104.32 yen Tuesday afternoon in Asia from above 106 yen a day earlier, adding further pressure on major exporters.

[newsjunky5]

Look, Bush lied about Iraq to start a war. Why can''t he lie and say he signed some bailout bill. Then after the market surges, he comes out and admits he didn''t sign anything. See, you fixed it all by yourself, for free.

[alphaa10-2009]

Have you noticed? Everything Bush touches turns to ashes-- or worse!

After more than eight months in office, our Master of Disaster made his debut atop a pile of rubble at Ground Zero-- and then ignored WTC health claims of rescue workers for years.

Bush celebrated an Iraqi "mission" never justified by fact, glad-handing sailors about a carrier steaming slowly off war-torn San Diego.

A wannabe president whose deriliction of duty inclodes gazing down at post-Katrina New Orleans from 20,000 feet-- as he flew on and over to California to greet McCain on McCain''s birthday.

A wannabe whose record of telling the truth is not ready for prime time, and whose last assurance was the economy continues in sound health.

[samthetvcat]

---"In Hong Kong, the Hang Seng index sank 3.6 percent. Markets in Australia, South Korea and the Philippines were also down sharply."---

Have they picked up? Hang Seng''s only down 1.7 now . . .

[samthetvcat]

Now it''s only down 1.3 . . .

[airport1207]

I wanna know how long it''s gonna take to present next new bailout plan!!!!!!

[wl7bzh]

Here''s a thought-if the economy comes to a halt; the environment will get a rest, housing prices may crash back to normal, there won''t be a need for foreign oil, we won''t be able to afford a war,and illegal aliens will have less of a motivation to come here.

[samthetvcat]

Aren''t the foreign markets down less today after the bailout''s failed than they were yesterday in anticipation of the bailout actually passing?

What do you make of that?

I''d like to think the market''s saying credit really shouldn''t be so readily available when so many people can''t live within their means and the market''s sick - clean it up!

But maybe it''s because of cheap oil, or maybe it''s because from a distance it''s easier not to lose your cool and they know Congress''ll come up with an alternative eventually.

Funny though because everybody was making all those doomsday scenarios . . .

[samthetvcat]

Hang Seng''s now made gains, up 0.7% - woot woot!

[book54552134]

Quite simply -

After being forced to pay for an expensive & unnecessary war in Iraq, the overwhelming majority of Americans do not want the cost of this utterly corrupt banking bailout to be foisted upon themselves & their children.

But this issue will come up in Congress again, & in relatively short order. Currently, there is much twisting of arms by the Bush Administration & Congressional leaders. In the next few weeks, we shall see which Congressmen/women (of both Partys) will acquiesce to the pressure stab their constituents in the back!

[nuffera]

The market will correct itself and will return to about 5000, which is what it should be. The Boogie man is about to appear, in the form of Bin Laden and he is going to scare you into pushing for this bailout of the rich!! Don''t fall for it,he''s Bush in his Halloween costume.

[nextgenman]

This whole bailout is a bullcookie smokescreen. Watch the markets go up today.

What these sleaze bags want is to be able to continue to play monopoly with our lives and our money while still thinking they are the most important melodrama queens in the whole wide world.

[prof_s]

Mayhem, carnage, shock and fear are just a few of the degrading buzz words being thrown about, attempting to create fear, once again, about something that shouldn''t frighten anyone except the greedy, deceitful "Masters of the Universe" who maneuvered themselves into unbelievable losses. Now we''re suppose to be fearful for their losses. Not a chance. After stealing so many homes from good people who were deceived into believing the lending institutions were acting in good faith, but actually who had two interests in their customers; their money, their houses and how they could get their greedy hands on both. New idea, let''s slowly boil the predatory piranhas in the blood of the people they stripped down to the bone and watch them scream, "Help me! Help me!" like so many of our friends, neighbors, and fellow ''true'' Americans have for so long. Boil ''em down to the marrow and laugh at their pleas for mercy.

[upto1947]

Does anyone know how sick all of this is. People are dumb. Yes dumb. You pay to buy a stock, you pay to sell a stock. You make people rich that do nothing, and then you cry when you can''t buy are you lose some money. Take your money and keep it. Why would anyone want to pay to spend. LIke I said, peopel are dumb. Top H33L with wall street and all of you who have money in wall street. You all need to go broke.

[upto1947]

This is great. One of the best on here.
Here''''s a thought-if the economy comes to a halt; the environment will get a rest, housing prices may crash back to normal, there won''''t be a need for foreign oil, we won''''t be able to afford a war,and illegal aliens will have less of a motivation to come here.

The market will sort itself out. In the neantime I''m buying on the downside.

Fear and panic as the press, the president, McCain try to sell omly make matters seem worse. Fasten your seatbelts it''s going to be a bumpy ride, but it will all sort itself out.

[amervtrn]

Every working Citizen will lose if it ever goes through. Banks and Wall Steet are not Citizens they are Business entities. The government will borrow (at interest) the money needed from the Fed. The Fed will create the dollars out of thin air, devaluing the U.S. currency. Taxpayers will repay the loan. Much like the economy of the Carter years, except that the scale and damage will be about 300 fold more severe. Those business entities which cannot survive will be bought up in the market, as is already happening.It seems the politicians, who couldn''t run a business if their lives depended on it.This is a political solution that will compound the problem. Fasten your seat belts everyone. It''s going to be a long, bumpy ride. For those who survived the Carter year, %u201Cyou ain''t seen nothing yet!" But wasting resources will not cure the problem.

"Have you noticed? Everything Bush touches turns to ashes-- or worse!" Good comment wannabe!

Those who studied before he was elected already knew it. He was a disaster in business also. And folks voted for this guy twice?

[amervtrn]

Government cannot stop the Boom to Bust cycle.They may lengthen it a little, but eventually it will happen. It is now here. Money will not cure the problem. It will only waste resources.No democtatic slush funds.

If the Bailout is such a good deal why haven''t the Democrats passed it by themselves and kept all the Glory? There is another question that comes to mind here. How much of this boondoogle is going to Foreign banks? If you have followed foreign news and stock markets, especially those who are blaming the USA for all the world''s problems (Steinmeyer ), their markets, which are in worse condition than our''s, suddenly seem to act as if the money was going straight into their accounts. No Bailout!Keep America free. No enslavement of the people.

[gwjackie]

Just think you may get your mail with out there being so much junk mail from the credit card people.

[tpraskac]

Sit it out . Will get better.

[ajaxtheleast]

Yes, not only will the markets go back up
today but tomorrow and the day after that.

If dems can delay a week or two this is
just what the Bush group doesn''t want
you to see.

700 big ones can be chipped away at and not
even be noticed. And with their history
only a stupid person wouldn''t give a
thought to "collateral" damage occuring
to the dispensation of such an amount.

Discover how YOUR congressperson voted
and dem or repub vote accordingly.

Shareholders are inherent gamblers,,.,.
cant help themselves,,,They''ll be back.

As it says above,,,deep drops in Asia and
Europe some bouncing back up within hours.

DEMS!!
LET THE
PAIN IN
McCAIN
REMAIN
DISDAIN
THE BAILOUT
VOTE NO!!!

[willymack]

But with elections in November, many lawmakers were unwilling to take the political risk of supporting a measure that many American voters see as an undeserved bailout for rich, reckless investment bankers.

This only confirms once again, congress puts its own welfare above that of the nation. Pelosi''s partician attack on Republicans just before the vote, was idiotic at a time when you needed bi partisan action. Proves she is a class A schmuck.

[wl7bzh]

Posted by dragonking5 at 06:31 AM : Sep 30, 2008
-----------------------------------------------

Between the obvious elements of "cultural diversity" and chronic misapplication of psychotropic pharmacology you appear to have acquired a condition of uncontrolled flight of thought.


Quite simply put: Dude, you got diarrhea of the mouth and you need to leave dat bad ****** alone yo been smokin.

[willymack]

Health care costs continue to skyrocket. All americans are being hurt....except those little government workers state and federal.......why should their healthcare be guaranteed by my tax dollars. We all know we only need a third of the idiots. Lets cut Government health care costs by 2/3rs. Congresses out, execuitive branches out...we will keep the judges.

[pensacola98]

The citizens of this nation need to remember that the reason the Fed Chairman lowered the prime lending rate gradually since 2002, was to control inflation while the USA was fighting a war. It was to keep our wartime economy stable.

We over-controlled some things and under-controlled others.

Wartime economy differs from peacetime economy in fiscal, immigration, customs, taxation and trade policies.

The Iraq War is the first six year period of wartime to test our economic policies since the Great Deregulation Economic Era began in the 1980''s.

I am convinced that the US economy lost stability because the Iraq War lasted too long. I am even more distressed that following a Marshal Plan to rebuild Iraq and Afghanistan will create more sticker shock and additional foreign policy strife, because without rebuilding those countries, we will permit them to re-create their war making capabilities and relive a similar occurence as seen after WWI and WWII.

[ll2owt]

remember when the republicans were "ramming" it to the dems a few years back?? glad to see the worm has turned. just bend over and take it like a craig and stop whining..

[keebosr]

I just saw Harry Smith bait what appeeared to be a blue collar worker this morning in an interview abut the failure in Congress yesterday. His bold lead off question essentially began with a statement saying "...we all know this problem was caused by Wall Street...". This statement is demonstrably false as a 100% truism.

The public is gradually figuring out just how complicit the US Congress and two former Democrat Presidents are in this mess. Start with the Community Reinvestment Act, Fannie Mae liberalization, big campaign contributions to top Congressional "leaders" - all coincidentally Democrats - and you have some of the major seeds to he problem. Add on acceptance of a weak Dollar by the Bush Administration and there you have it.

Please - drop the anti-business, anti-Wall Street liberal bias. If it truly was all caused by Wall Street, then, you owe it to your viewers to endorse Senator McCain since Barack Obama is the number two recipient of Fannie Mae campaign contributions - conveniently delivered from a publicly traded Fannie who was listed on the NYSE.

[keebosr]

For all of the anti-Bush people too... The Bush Administration warned Congress at least a half dozen times about problems at Fannie Mae & Freddie Mac. It''s all well documented in the public domain. The vaunted "leaders" in Congress - Dodd, Frank, Shumer, et. al. all blocked it.

Start thinking with your brains, instead of your bottoms.

[ll2owt]

keeb..whats this?? barber shop economics?? face the truth. dig ronnie up and gut shoot him..

[willymack]

The econonmy will not go into depression in the next 40 days but electing the wrong President will destroy the country. Whether you agree with John McCain or not and I do not always agree with him, he has a long record in congress to review and judge. Barrack Obama has yet to finish one term as senator and has little on the books for you to review or judge. As McCain''s critics scoff at his war record, they say.... yeah? if he was such a good pilot how come he got shot down? True, but at least we know he knew how to fly a plane. We have no idea what Obama knows how to do.... other than tell us that he can solve any problem we have. Judge McCain on his record, not on the record of George Bush or on the non existing record of Barrack Obama.

[willymack]

The econonmy will not go into depression in the next 40 days but electing the wrong President will destroy the country. Whether you agree with John McCain or not and I do not always agree with him, he has a long record in congress to review and judge. Barrack Obama has yet to finish one term as senator and has little on the books for you to review or judge. As McCain''s critics scoff at his war record, they say.... yeah? if he was such a good pilot how come he got shot down? True, but at least we know he knew how to fly a plane. We have no idea what Obama knows how to do.... other than tell us that he can solve any problem we have. Judge McCain on his record, not on the record of George Bush or on the non existing record of Barrack Obama.

[willymack]

The econonmy will not go into depression in the next 40 days but electing the wrong President will destroy the country. Whether you agree with John McCain or not and I do not always agree with him, he has a long record in congress to review and judge. Barrack Obama has yet to finish one term as senator and has little on the books for you to review or judge. As McCain''s critics scoff at his war record, they say.... yeah? if he was such a good pilot how come he got shot down? True, but at least we know he knew how to fly a plane. We have no idea what Obama knows how to do.... other than tell us that he can solve any problem we have. Judge McCain on his record, not on the record of George Bush or on the non existing record of Barrack Obama.

[willymack]

The econonmy will not go into depression in the next 40 days but electing the wrong President will destroy the country. Whether you agree with John McCain or not and I do not always agree with him, he has a long record in congress to review and judge. Barrack Obama has yet to finish one term as senator and has little on the books for you to review or judge. As McCain''s critics scoff at his war record, they say.... yeah? if he was such a good pilot how come he got shot down? True, but at least we know he knew how to fly a plane. We have no idea what Obama knows how to do.... other than tell us that he can solve any problem we have. Judge McCain on his record, not on the record of George Bush or on the non existing record of Barrack Obama.

[geneonlbk]

The RepubliCrats only have their own reelection in mind. We do not matter. The RepubliCrats need to be voted out of office and replaced with a totally new set of crooks who might be mindful that their fate is now in the hands of the voters.

[willymack]

Pelosi democrats see this crisis as the saving bell for Obama. By doing nothing, democrats can keep the public focused on the economy and not on the absence of Obama''s credentials to be President. He does have one....he can talk up a storm but he can not find an umbrella.

[willymack]

geneonlbk

In part I agree. But I would prefer to set some minimum educational and or expertise qualifications and then select congressmen and congresswomen by lottery. At present 90 % of congress has little expertise or commendable experience

[misha128-2009]

Part 2

After a weekend of additional negotiations with Senator McCain literally phoning it in from a posh Washington Hotel. The revised proposal with the new McCain/House insurance provisions came to a vote in the House. the Democrats rallied 60% of their caucus in support; Senator McCain the "maverick forger of bi-partisan alliances" (in his own mind at least) mustered 33% of his own party to the cause. Most bi-partisan bills pass with the major backing of one''s own party and anything from a small to sizable number from across the aisle. In this case bi-partisan support consisted of a super (3/5) majority support from Democrats (to a true compromise bill) across the aisle and from the Republicans (having secured their desired insurance option with weakened executive pay and golden parachute provisions) yielding only 1 of every 3 members in support. 2 of every three Republicans house members distrust the President, their presidential candidate and their own leadership and failed to support a bill specifically revised to support thier ill planned and half-baked solution -- this is not a party ready to lead -- this is a party totally deviod of leadership and totally dedicated to obstruction regardless of the cost to the country.

[misha128-2009]

Senator McCain pseudo-suspended his campaign went to Washington. Convinced President Bush to conduct a photo-op. Showed up at the photo op to demonstrate his qualifications to be more inept as President Bush at the Katrina press conference. President Bush said nothing -- while he did not assist he clearly did not muddle and confuse the plans of others. Those plans deserved changes but that still does not justify amateur antics like Senator McCain''s in the face of a crisis.

Senator McCain on the other hand despite suspending his campaign and "exhaustively studying the details" was unfamiliar with the proposal on the table. To muddle matters Senator McCain introduced half-baked ideas of the House Republicans (like the President''s original plan completely devoid of governance and oversight which Senator McCain already protested) he was unwilling to support and also barely could explain. In the truest adherence to President Bush''s pseudo-attendance at the Katrina planning session Senator McCain left the meeting making no SUPPORTED PROPOSALS, PRINCIPLES or ANY OTHER GUIDANCE as to how to proceed to a solution after completely wrecking the proposed solution of the moment.

[misha128-2009]

The market can recover from a 7% loss.

Posted by wimpleman at 07:41 AM

How about 10 or 12 days of 5 to 7 percent losses?

[antoniof123]

I hope you McCain nut cases realize that this idiot is responsible for deregulation that caused this mess.

If you are too dumb to breath the air don''t drop dead.

[willymack]

misha128 s

Poor misdirected but verbose soul that you are......why would Nanci Pelosi preface a debate on a bill that requires bi-partisan support to pass ....... with a stinging attack on House Republicans? If you can think logically, you can easily see she is using the crisis to attempt to further the Democrats desparate need to regain the presidency.

[misha128-2009]

he can talk up a storm but he can not find an umbrella.

Posted by willymack4 at 07:59 AM

Sounds like a perfect description of Senator McCain to me -- talked his way into inaction by the House. The great forger of bi-partisan alliances -- arrives in Washington ill prepared -- introduces a second ill conceived completely unbaked house plan without his support to follow Bush''s ill conceived power grabbing plan. Senator McCain admitted to insufficient understanding of the proposed plan and neither he nor the house leadership could explain their plan. Why did he bother to claim to suspend his campaign at all -- He still did nothing and arrived unprepared and successfully conspired with the house to block actions he claimed were necessary. Choose an option Senator McCain lied about wanting any intervention or Senator McCain''s flustered blustering leadership proved to be totally inept.

[willymack]

antoniof123

If we are the nuts, then surely you are the shells...empty headed critics employing no logic at all and having no understanding of how our govenment works. Bush can do almost nothing without surpport of congress. So anything he did, congress funded. NOW......when was the last time the democrats fillibustered a bill? They no longer use the fillabuster. They simply included their "earmarks" on the bill. They are all fat dumb and happy. And McCain went so far in the debate as to tell the American public congress and special interests are corrupt.

[misha128-2009]

Posted by willymack4 at 08:10 AM

Ever heard of truth to power -- it is something that many people respect. Especially when confronted by bellicose unprepared leaders like senator McCain.

[upto1947]

Nanci Pelosi I can''t say what I think she is on here. Let just say I would not take her to cheap room in a run down town.

[willymack]

misha

And while McCain was doing all that.......what was Obama doing? Nothing.......or more than likely preparing a speech to tell the public he has a 5 point plan to bring all of congress together again......just like Humpty Dumpti........you better get ready for the fall if you elect this do nothing image.

[misha128-2009]

... Bush can do almost nothing without surpport of congress. ...

Posted by willymack4 at 08:15 AM

Remember Newt and his buddies and how they were rewarded by the voters for obstructionism? You would like for the Democrats to be as dumb as the Republicans and not learn from history. Sorry intelligent people including independents understand that government must operate despite the inept leaders occupying the White House or any other office.

[willymack]

Misha

Obama has shown true leadership ability ......it''s just that we can not find where. I remember a poor little jewish girl that was once enthralled with a prince in shining armor. His name was Bill I did not have *** with that women Clinton. Another sample of Democratic truth to power, from the *** club of Clinton Edwards, Spizer, Patterson and Jesse Jackson.

[misha128-2009]

... And while McCain was doing all that.......what was Obama doing? ...

Posted by willymack4 at 08:18 AM

It appears that 60% of the Democrats lead by Obama and others were willing to settle on a solution; while 66% of the Republicans despite winning inclusion of their precious options still obstructed they appear to be the remnants of Newt''s boys that still haven''t learned from their own experiences.

[willymack]

misha

Please do not include democrats and yourself with intelligent people. It is obvious you are young, impressionable and probably sexually attracted to Barrack( I have no voting record on issues) Obama.