Congress Rejection For Bailout Has Shaken Wall Street And The Entire World Economy

After a great rumor about the Treasury’s $700bn package approval, Congress decided to stay put and reject help the rescue. This decision came after a great dispute inside Republican Party at Congress. The key factor in the decision seems to lay on rival opinions and the current presidential campaign which had affected Republicans agreement.

However, not only government and big banks where shock with this decision. S&P 500 fell 8.8 per cent in the previous session, its worst performance since 1987, the Dow Jones Industrial Average fell 777.7 points, its biggest one-day points fall in history. All of it after Congress failed to approve the bailout. Despite the fact that the real economy hasn’t been touch yet, everything point toward the longest recession in a quarter century the U.S. may face.

As a matter of fact, some analysts claim that Congress decision might turn a long and moderate recession into a long and steep decline as credit freezes up and stock prices continue to nosedive. However, no matter what action Congress takes we have to be ready for a big hit. This is a consequence that was growing since a long time ago. Many people announce this would happen and that we will have to pay for the giants’ mistakes.