Editor's Note: Susan Lisovicz is CNN's primary correspondent on financial news. She is most frequently seen from the New York Stock Exchange (NYSE) reporting on the latest market and business news. Today was a day on Wall Street unlike any other. Susan shares her view from the center of it all:
Susan Lisovicz |BIO
CNN Financial Correspondent
The opening bell didn't ring today. Its the first time I can recall an electronic malfunction. A bad sign.
The Market was selling off. I asked traders, wasn't everyone clamoring for a deal? There was one on the table. They were wary because it had not passed and there was more stress in the financial market: Wachovia, and three European financial companies on the brink.
Midway through today's session, the traders gathered around the TV monitor. The last time I saw that was for some televised car chase. There simply isn't a lot of serious stuff so riveting to them. They act on headlines.
I got in the crowd to see what they were watching. It was the vote, and it wasn't going to pass.
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Whoa! My advice: Don't check the 401K plan. Stocks sank 778 points today, the worst single-day point loss ever. Here's another tough reality: investors lost $1.2 trillion, the most ever in one day. The deep decline came after the House rejected the $700 billion bank bailout plan.
How did it get this bad? It depends on who you ask.
Republicans and Democrats are pointing fingers at one another.
It's sorta like when you ask your kids, "Who broke the lamp?" And, each child blames the other.
But, in this case, trillions of dollars are at risk.
Here's some of the blame game for you.
House Republican leaders say Nancy Pelosi, the Democratic speaker of the House, caused the vote to fail. "The Speaker had to give a partisan speech... that poisoned our caucus," said Rep. John Boehner, the House minority leader in a news conference after the vote.
The number-two Democrat in the House, Rep. Steny Hoyer, rejected that accusation as "absurd."
Rep. Barney Frank, the House Democrats' main negotiator on the bill, was even more critical.
"Because somebody hurt their feelings, they decided to punish the country?" Frank demanded, saying the explanation was an excuse. "I don't believe they had the votes. They are covering up the fact that
they don't have the votes," he said.
Do you think the House should have approved the bailout or did it take the right step?
We'd love to hear your thoughts.
Tonight, we'll have all the angles on this ugly day on Wall Street. From the politics to your pocketbook, find out what this means for you and America's economy.
Hope you join us at 10pm ET.
David Gergen | Bio
CNN Senior Political Analyst
The financial markets have sent a clear signal of just how reckless the House of Representatives was today in rejecting the compromise bailout plan - no less than $1.2 trillion in stock values were wiped out in just a few hours.
What can be done to get a bill through in the next few days? Here are some initial thoughts:
First, a ton of bricks needs to be dumped on the heads of those who voted against - if they can't see the light, make them feel the heat. Democrats ought to be ashamed that 95 of their Members voted against; but it is the House Republicans who deserve the greatest blame - a significant majority of Democrats voted in favor of the bill, while conservative Republicans - defying the White House - voted against by over 2-1. I hear that some in the White House think the GOP vote was a disgrace; they are right.
Second, Nancy Pelosi has to remove the sting she created through her speech on the House floor. Republicans now blame her for the defeat, arguing that she was so partisan that some of their "yes" votes flipped and voted no. She may think this charge is unfair but since so much is at stake, she needs to go overboard to clear the air.
Third, the White House and Congressional leaders should count heads to make sure that everyone who voted "yes" today will do so again in a second vote. If the 228-205 margin holds, that means they have to flip at least 12 Members for a second vote. It will be much more difficult to get all of the switches from the Republicans. Solution: put in enough sweeteners so that each side has a bit more and get an agreement between Nancy Pelosi and John Boehner: "I will deliver 6 from my side if you deliver 6 from yours."
Fourth, Hank Paulson must take another look at the idea at the idea of bankruptcy courts being able to review and help to rewrite private mortgages. How many Democrats would come over to "yes" if that were done? And what can he do to sweeten the pot for at least a half dozen Republicans?
Fifth, Barack Obama and John McCain should now join up with President Bush and the Congressional leadership to give this bill a much more vigorous push. After his ill-fated intervention of last week, McCain turned surly today, blasting Obama - unfairly - for the defeat in the House. That is ridiculous. But it is true that Obama could be a lot more forceful than he has been in working behind the scenes to round up votes. Both men need to show much more leadership here. President Bush obviously has so little clout that he can't get this done. Obama and McCain should step up to help him - and good grief, avoid trying to claim credit or elbowing the other guy in the eye.
This is big time stuff. Washington isn't playing with matches here; it is playing with dynamite. For the sake of the country - and for our standing as a world power - we need LEADERSHIP!
CNN Senior Producer
The O.J. Simpson trial adjourned until Wednesday morning in observance of the Jewish Holiday, but not before "set up" was again uttered from the witness stand.
Alfred Beardsley, in handcuffs and prison garb, reiterated that he thought Simpson was "set up" in the alleged armed robbery and kidnapping at the Palace Station Hotel.
Beardsley was recalled by the defense and has maintained he was not a victim of the alleged robbery to get sports memorabilia.
Beardsley was imprisoned for a parole violation.
Editor’s Note: Suze Orman will be on AC360° tonight at 10pm ET to discuss how to keep your money safe. Check out her new partnership with the FDIC at myFDICinsurance.gov. On that site you can use her calculator to make sure the money you put in the bank is safe, and backed by the FDIC. Suze was interviewed on CNN earlier today. Here's what she had to say:
Personal Finance Expert
Q: How worried should people be right now? Not only about stocks but mutual funds, portfolios, 401(k)s, jobs?
They should be worried about everything. And they should be so worried, not that we should start a panic, that they really start to truthfully change their behaviors.
They have to realize that nobody is joking here. They can’t continue to go out to eat, charge it on a credit card and then just pay the minimum at the end of the month. They have got to go into a different type of financial mentality,
I have to tell you, I don’t think that has sunk into them yet. so a few more days like this a few more things coming down the pike, they may go ‘oh, my God, we may be in serious trouble here.’
Let’s start with bank accounts. If you are within the FDIC limits of a bank account, if you happen to be at a credit union, if you’re within the limits of the NCUA (National Credit Union Administration), you have to understand your money is absolutely safe and sound. The $100,000 per account.
Here’s what everybody needs to do, especially with FDIC… FULL POST
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CNN Congressional Correspondent
Deirdre Walsh and I spoke with Minority Whip Roy Blunt. He BELIEVES an altered version of the current bill can pass the House. He believes the bill does need change. He suggests it should go to the Senate first but Senate leadership has indicated that they’re *not* inclined to have the Senate vote first. Blunt also says if the stock market continues to fall that could help change votes.
On what's next? Blunt said he's talked to Paulson, Democrats, and Republicans in the House and Senate. Suggested it could be helpful if the Senate were to vote first. Blunt we're "looking to see if there's anything we need to do to improve this bipartisan bill on Senate side so that the House could deal with this in a few days."
Suggests falling stock market and credit crunch could change votes: “Members on the House side will have a few days now to look at impact of no immediate action on the marketplace and see what happens.” “It will also make a difference if the international credit situation begins to push its way down more to the banks we live. If the banker you know calls you and says I’m seeing this credit restriction is real - that will make an impact on what next.”
“Let’s see what happens tomorrow and the next day. You don’t want to react to just one day.”
Should we expect changes in the bill: "My sense is that this exact same bill couldn’t pass. But this bill could be the basis for final congressional action." "They'd have to expect some changes."
Editor’s note: Here are some early reactions to the breakdown of the bailout bill, from the presidential candidates, congressmen, and our reporters and producers.
From Jessica Yellin, CNN Congressional Correspondent:
We're getting this message from multiple republican congressional aides but can't give you names:
"Pelosi's hyper-partisan floor speech infuriated a lot of our members and it has torpedoed this bill."
Dem aides say: "We delivered our votes - they did not deliver theirs."
Another Dem aide: "They were worried about voting for this now they are responsible for rescue going down...they are suggesting that 100 republicans were ready to vote for this an hour ago and then switch based on a speech? That suggests that vote was never about the economy."
From Ted Barrett, CNN Congressional Producer:
I just spoke to Boehner as he walked off the House floor looking gloomy. Asked if he was disappointed by the vote he said, "very. Not because of the vote but what it means for our country." He said he did not know if lawmakers knew the market was tanking during the vote. Asked if he did he responded, "no, I was working to get every vote." He said he was not aware of what the next legislative step would be.
From Rep. Barney Frank, (D-Mass.), a lead organizer of the bail-out package:
We don’t believe they had the votes and I think they are covering up the embarrassment of not having the votes. But think about this: somebody hurt my feelings so I will punish the country. I mean that’s hardly plausible. And there were twelve Republicans who were ready to stand up for the economic interest of America but not if anybody insulted them. I’ll make an offer: Give me those twelve people’s names and I will go talk uncharacteristically nicely to them and tell them what wonderful people they are, and maybe they’ll now think about the country.
From Rep. Darrell Issa (R-Calif.), a lead opponent of the bailout package:
"To be honest, somebody finding out that Nancy Pelosi made a partisan speech? I’m shocked.” He said claims that her speech shifted votes are “nonsense.”
From Sen. McCain’s speech:
I call on Congress to get back, obviously, immediately to address this is crisis. Our leaders are expected to leave partisanship at the door and come to the table to solve our problems. Senator Obama and his allies in Congress infused unnecessary partisanship into the process. Now is not the time to fix the blame. It's time to fix the problem.
From Sen. Obama's speech:
One of the messages I have to Congress is get this done. Democrats and Republicans, step up to plate, get it done and understand that even as you get it done to stabilize the markets we have more work to do to make sure that Main Street is getting the same kind of help Wall Street is getting. We cannot forget who this is for. This is for the American people. This shouldn't be for a few insiders...
David Gergen | Bio
CNN Senior Political Analyst
The vote by the House of Representatives today against the bailout bill was one of the worst mistakes I have ever seen the Congress make. It was shockingly irresponsible.
Yes, it is true that Americans are deeply offended by the idea of this bailout and yes, it is inconsistent with principles of a country that believes in free enterprise. But it represents an urgent and temporary intervention by the only institution in our country that can stabilize the financial markets and head off a potential calamity for millions of Americans.
Every Member who voted against the bill today should be held personally responsible at the polls this November if people are badly hurt by this.
In the meantime, one can only devoutly hope that our political leaders on both sides of the aisle can resurrect this bill and get it - or a close cousin - passed immediately. This is a dangerous moment for America.