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Thursday 20th of November 2008
September 26, 2008

Bail-out plan will be passed says Bush


by Kay Murchie
”Bail-out

It was announced earlier today that the $700 billion (£380 billion) US financial bailout plan had been blocked.

However, following hours of negotiations today, President George W. Bush has insisted that an agreement would be reached.

However, stockmarkets continue to fluctuate due to the uncertainty surrounding the deal.

According to the President, there are disagreements over aspects of a rescue plan, but there is no disagreement that something substantial must be done.

Senate Majority Leader Harry Reid, a Democrat, echoed President Bush’s comments and said we will stay in session as long as it takes.

It was understood that the bailout discussions on Thursday ended in a shouting match while reports say US Treasury Secretary, Henry Paulson, was practically begging for the bailout package to be approved.

The financial bailout plan has been deemed essential after Warren Buffett, one of the world’s richest men, and US Federal Reserve chief, Ben Bernanke, have been urging US Congress to approve the plan or risk serious consequences to the US economy.

Meanwhile, earlier this week, President Bush addressed the US public on prime-time television to convince them of the need for the rescue, saying that there was a risk of the US economy falling into recession and this must be avoided at all costs.

Today, it was announced that Washington Mutual (WaMu) was closed by regulators making it the largest failure of a US bank. WaMu’s assets have been sold to banking giant, JPMorgan Chase, for $1.9bn (£1 billion).

The news of WaMu’s collapse is the latest in a series of events that have had repercussions on the banking system worldwide.

The events of the last two weeks have seen the collapse of Wall Street giant, Lehman Brothers, the rescue of US insurance giant AIG, Bank of America’s takeover of Merrill Lynch and in the UK, Lloyds TSB’s takeover of HBOS.

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