$700b Bailout Package Approved by House 263-171, Now To White House

Markets are even in the hour following the House’s 263-171 approval of the Treasury’s $700b financial sector bailout package, and it passed the Senate yesterday. Now it goes to the White House and President Bush has already said that he would sign it into law. It’s widely expected that Treasury can start purchasing illiquid assets from banks within the next few weeks. It remains to be seen how much impact that it will have but the theory is that by unloading illiquid assets they can fund new activities. The reason markets are even is because, until this is executed, there’s no telling how much positive effect it will have. Also PIMCO head Bill Gross and other major players are also calling for the Fed to cut the Fed Funds (now at 2%) and Discount Rate (now at 2.25%) to have some immediate short-term impact on credit markets while this TARP (Troubled Asset Relief Plan) plan gets underway.

Below are some links summarizing the provisions of the bill and how it will be executed. We’ll continue to revise story as the final provisions and execution are more clear.

• Summary of how rescue package will work.
• Revisions to rescue package on 9/28.
• Summary of Senate add-ons to bill.