Haven’t we suffered enough? You really couldn’t make this stuff up if you tried. 666 may be the number of the beast but 777 was the amount the Dow Jones fell yesterday. The US House of Congress told the Street to drop dead by a 228-205 margin of rejection. The vote shows the:

• sheer degree of disdain in which Wall Street is now held on Capitol Hill,
• the deep ideological divide, with many members favouring a “free market solution” (whatever that may be),
• pressure Congressmen (half of whom are facing re-election) are under from constituents who were firmly opposed to the bill.

There is now a two day break for the Jewish Rosh Hashanah (New Year) holiday, though President Bush is due to make a statement at 13.45 today London time. This bailout now needs a bailout. But what’s Plan B? Will Congress continue to play chicken with the stock market?

Today’s Market Moving Stories
To be honest there is complete information overload at the moment and this is only scratching at the surface!

• In the smartest and boldest move thus far by anyone, the Irish government announced this morning that it is to guarantee all deposits, senior debt and covered bonds of AIB, Bank of Ireland, EBS, Anglo Irish, Irish Life & Permanent and Irish Nationwide for 2 years. This is of course bullish for the banks concerned as they can now focus on raising much needed capital. What will become of Ireland’s sovereign AAA credit rating remains unclear. That said, the current debt / GDP ratio at 25% is the lowest of any Euro area country bar Luxembourg.
• Dexia is the latest stop for the European bailout bus with a €6.4bn injection from the Belgian and French governments as well as €2bn from French bank CDC. Watch this space though as this could easily be wiped out with pending write downs.
• J.C. Flowers seems to be losing its touch after news emerged that the firm has taken a $1.5bn hit on a 25% stake in Hypo Real Estate.
• Ohio’s largest bank, National City, got savaged yesterday to the tune of 63% after Wachovia was forced to sell its banking operations at gunpoint.
• Fortis bank’s woes continue with rating downgrades and ING walking away from bidding for their Dutch retail business. Rabobank is likely to have its arm twisted by the Dutch government to invest.
• Italian banks Unicredit and Monte are under pressure this morning after their shares were suspended limit down (maximum price drop allowed in a single trading day) in Milan yesterday.
• Mitsubishi UFJ’s new $9 billion interest in Morgan Stanley has lost them $500m in 24 hours!

Central Bank Reaction
Other than continuing to pump billions of liquidity in the market, do I hear talk of a possible rate cut from the ECB this Thursday? Certainly something from the Bank of England looks odds on now.

Data. As If It Matters!
We have the Case-Shiller house price index at 14.00 (expected to show a 16% drop in prices), Chicago PMI at 14.45 (53 expected) and Consumer Confidence at 15.00 (55 expected.)

The Four Horsemen just rode by.
But I’ll leave the final word to Barry McGuire (nice pants).