The US House of Representatives votes on the $700 Plan in about 2-3 hours. [22:00, MNL time]

Here are some highlights:

• US Treasury gets USD250 billion upfront (the balance is conditional and staggered)
• Recoup plan if the US government loses money after 5 years
• Limits on executive pay
• Insurance

 

Oh, and by the way, this action is completely unprecedented.

There’s blood all over Wall Street, all over the world in fact. What went down over the past 24 hours or so?

• Wachovia sells its bank business to Citigroup
• Fortis bank gets injections from Benelux
• Bradford & Bingley nationalized, part of it sold to Banco Santander
• Hypo Real Estate gets a booster shot from Germany
• Icelandic Glitnir Bank gets taken over by its government

Things happening on the market now [22:20, MNL]

• S&P 500 down 3.70% (broad-based selling)
• DJIA down 2.93%
• NASDAQ down 4.24%
• FTSE down 3.96%
• WTI Crude down 6.48%
• NYMEX Crude futures fell through the $100/bbl level
• Gold up 2.49%
• UST 2yr and 10yr yields down

The Fed has just released a press statement on further measures they’re taking to keep credit going into the financial sector:

• An increase in the size of the 84-day maturity Term Auction Facility (TAF) auctions to $75 billion per auction from $25 billion beginning with the October 6 auction,
• Two forward TAF auctions totaling $150 billion that will be conducted in November to provide term funding over year-end, and
• An increase in swap authorization limits with the Bank of Canada, Bank of England, Bank of Japan, Danmarks Nationalbank (National Bank of Denmark), European Central Bank (ECB), Norges Bank (Bank of Norway), Reserve Bank of Australia, Sveriges Riksbank (Bank of Sweden), and Swiss National Bank to a total of $620 billion, from $290 billion previously.   

CITI doesn’t see the TARP doing anything fundamental for financial markets – it’s not a “get out of jail free” card. It targets securities, not loans. Lots of writedowns to emerge.

Meanwhile, as of 19 September 2008, ECRI’s WLI fell by 12.3%. Not so good, my friends. Lakshman Achuthan says “the train has left the station” re: a recession in the US, and regulators are playing catch-up.

Wow. That Earth, Wind and Fire song is SO going to have a whole new connotation.