This afternoon, the House of Representatives voted against the federal bailout plan, defeating the proposal 228 to 205. The Dow Jones Industrial Average and S&P 500 immediately sank on the news, as investors displayed their lack of confidence in a plan passing Congress. House Financial Services Committee Chairman Barney Frank said he was "very disappointed" in the vote, adding, "The Republicans killed this." Even after President Bush lobbied to pass the bill (to “help keep the crisis in our financial system from spreading throughout our economy”), Democrats could not rally enough yays.
The markets were already down somewhat on earlier news that Citigroup had agreed to acquire the banking assets of Wachovia for $22 billion. On a per share basis, Citi paid $1 for Wachovia—a far cry from the more than $50 per share price Wachovia’s stock traded for in the summer 2007 prior to the credit crisis (and also a lot less than the $10 per share price it traded for just a few days before the Citi deal). So, Wachovia commercial banking employees, meet your new boss: Vikram Pandit.
And following in the footsteps of WaMu and Wachovia, it appears that the next credit-crisis casualty will be National City, whose share price is down another 60 percent today to $1.50 (just a tad off its 52-week high of $27).