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Bailout decision edging closer -

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Bailout decision edging closer

Broadcast: 03/10/2008

Reporter: Michael Rowland

As US Congress vote on the $US700 million draws closer, there are fears that the credit crisis is
spreading far beyond Wall Street.

Transcript

LEIGH SALES, PRESENTER: In the United States, tension is building as the $US700 billion ($840
billion) financial rescue package approaches its final vote in the Congress. The stock market
plunged on fears the bailout may once again be struck down by the House of Representatives and
there are concerns the credit crisis is spreading far beyond Wall Street.

North America correspondent Michael Rowland reports from New York.

MICHAEL ROWLAND, REPORTER: It's a volatile time in New York's financial district and not just on
the stock exchange floor. Protests against the $US700 billion bailout have been an almost daily
event.

PROTESTOR: I'm sure all over the United States Americans right now are rising up and saying, "What
is going on?"

MICHAEL ROWLAND: The government rescue was aimed at restoring stability to Wall Street and traders
say it can't happen a moment too soon.

TED WEISBERG, STOCK TRADER: Not only is it important because it will help fix some of the real
problems that we're dealing with, but hopefully it'll also inject confidence back into the
financial markets.

MICHAEL ROWLAND: Ted Weisberg has been trading stocks here for more than 40 years. He says he's
rarely seen market nerves so raw.

TED WEISBERG: On a day-to-day basis, human emotion probably has a lot to do with the pricing of
stock and because that's so, it's my feeling that there is no such thing as a rationally priced
stock and there's no such thing as a rationally priced stock market. There is nothing rational
about the business of trading stocks. So much of it is perception based on confidence, and that's
one of the issues that we're dealing with now and that's why this bill is so important.

MICHAEL ROWLAND: The anxiety is extending well beyond Wall Street. Unemployment claims have risen
to a seven-year high and the deepening credit crisis is engulfing businesses, big and small.
Sandwich store owner Joseph McKenna is struggling to get the cash he needs to pay for supplies and
staff.

JOSEPH MCKENNA, STORE OWNER: Oh, it's very hard 'cause you gotta pay the bills and then you gotta
pay off that so you can re-use it again or you get charged high interest rates. It's expensive.

MICHAEL ROWLAND: At the same time, Mr McKenna says sales have dropped 20 per cent and cash-strapped
New Yorkers have stopped splashing out.

JOSEPH MCKENNA: Go for the cheapest thing; that's all they care about right now. But before, they
used to go for a lot of my higher end stuff, which I make more money off of and better sandwiches,
but their going for the more toned-down sandwiches now because it's cheap.

MICHAEL ROWLAND: It's clear the financial problems are starting to hurt an already weakened US
economy. That's why it's not just those on Wall Street who are holding their breath as the rescue
package comes up for a final vote.

Michael Rowland, Lateline.