One week after Lehman Brother's demise sent markets at home and abroad tumbling, there's more to worry about: the House of Representatives' rejection of the would-be monumental bailout of the American financial industry. Monday's no vote came dealt a serious blow to the legislation, which President Bush says is needed to prevent a "painful and lasting" economic downturn and "send a strong signal" of confidence to U.S. markets and restore stability to the global economy.

The political elite are pulling out all the stops to revive talks on the stalled bailout plan, which is aimed at preventing a possible collapse in the U.S. financial system — an event that would cause a severe domino effect that would threaten China's growth progress and the entire global economic landscape.

The initial failure of the financial rescue package, formally known as the Emergency Economic Stabilization Act, has left markets reeling from Wall Street to Tokyo and initially caused oil prices to fall steeply amid fears of a global recession. The Dow Jones Industrial Average lost 7% of its volume and plunged a record 777 points Monday, its steepest single-day drop on record. Japan's Nikkei average slid 4.1% Tuesday hitting a three-year low, while Hong Kong's Hang Seng opened down 5.5% and Taiwan's leading index closed down 3.6% (after briefly falling more than 6%) following the bailout plan defeat. (Mainland China's markets are closed this week for the National Day holiday, so the affect of the news on the Shanghai exchange won't be known until next . . .

For access to the full article, you must be a registered member - it's FREE.