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![The failure to pass the bail-out plan shocked traders on Wall Street [AFP]](http://mwcnews.net/images/stories/Economy/1/2/3/4/5/6/7/8/failure.jpg "The failure to pass the bail-out plan shocked traders on Wall Street [AFP]") | | The failure to pass the bail-out plan shocked traders on Wall Street [AFP] |
US markets have dived after the US House of Representatives voted against a $700bn bail-out bill in a shock decision.
The Dow Jones plunged by more than 700 points shortly after the bill, aimed at trying to stabilise the US economy, was rejected by 228 votes to 205 on Monday. Ahead of the vote, markets had continued to fall with Europe's markets closed at their lowest level since 2005. George Bush, the US president, said he was "very disappointed" by the rejection of the bailout and had summoned top aides to plan the next steps, White House officials said. Barack Obama, the Democratic White House contender, said: "It's important for the markets to stay calm because things are never smooth in congress and to understand that it will get done." Nancy Pelosi, the House of Representatives speaker, said: "... the legislation has failed and the crisis is still with us. "We must work in a bi-partisan way to have another bite at the apple." 'No happy day' The decision by the House of Represenatatives came despite urgent warnings from president Bush and congressional leaders of both parties that the US economy could nosedive into recession, or even a depression, without it.Eric Cantor, a House Republican, said: "This is not a partisan crisis. It is an American crisis affecting everyone in the country." Gerald Friedman, a US economist, said: "The Republicans in the House of Representatives are playing chicken with world economy. "The pro-deregulation people, the Republicans who voted this down, are the same people who have deregulated financial markets over the last 30 years. "The people that got us into this mess are now the ones that want to wash their hands of it. It's a little hypocritical." Terrrett earlier said that as banks were still not lending to each other - meaning the credit markets were not unfreezing - and the widening international crisis, with banks being rescued on Monday in Germany, Iceland, the UK and Belgium and with New Zealand going into recession, meant concern was still high. "This was all supposed to be a much happier day than it turned out to be," he said. Britain's FTSE 100 earlier tumbled 5.3 per cent at close amid the swathe of efforts around Europe to try and rescue troubled banks. Asian markets initially rose on Monday but soon fell by as much as two per cent. The US talks on the deal came shortly after George Bush, the US president, called for the "bold" bill to be passed, saying he was "confident" it would help "restore strength and stability to America's financial system and overall economy".
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