No bailout for Wall Street

At least not yet. Bloomberg reports:

The financial-rescue plan intended to restore confidence in the U.S. banking system collapsed in partisan wrangling as the House of Representatives voted down the proposal backed by the Bush administration and congressional leaders of both parties.

Markets plunged as the House rejected, by a vote of 228 to 205, the $700 billion measure to authorize the biggest government intervention in the markets since the Great Depression. The Dow Jones Industrial Average fell 778 points, or 6.98 percent to 10,365, the biggest point drop ever. The Standard & Poor's 500 Index fell 8.4 percent, the most since Oct. 26, 1987.

This could spell more trouble for an economy that's already sputtering. From Reuters:

The Commerce Department said consumer spending was flat in August after barely edging up by a revised 0.1 percent in July, a much weaker outcome than forecast by Wall Street economists surveyed by Reuters who had a 0.2 percent spending rise.

Incomes from wages and salaries and all other sources rose by 0.5 percent in August, largely reversing July's revised 0.6 percent drop and well ahead of forecasts for a smaller 0.2 percent gain...

And the economy is looking bad in Europe too. From Bloomberg:

European confidence in the economic outlook fell to the lowest since the slump in the wake of the Sept. 11 terrorist attacks after a global credit squeeze claimed U.S. and European institutions and sent stocks plummeting.

An index of executive and consumer sentiment dropped to 87.7 in September from 88.5 in August, the European Commission in Brussels said today. That is the lowest since the index fell to 86.6 in November 2001.