Senate to the Rescue!

"The Senate is next", BusinessWeek blares. In a surprise twist, the Senate is pushing forward with the vote on a newly sweetened $700 billion bailout plan to tonight at 7:30 p.m. EDT. This time, the package includes "tax breaks and a higher limit for insured bank deposits in a bid to win House approval and send legislation to President Bush by the end of the week," The New York Times reports. It is the tax cuts for businesses that is seen as a crucial addition to get skeptical House Republicans on board, the NYT adds. The Wall Street Journal says in addition to raising the FDIC coverage limit to $250,000, another sweetener could come in the form of tax breaks for homeowners and jobless benefits. The full details will be unveiled some time today, lawmakers promise.

In a rare moment of consensus, The Boston Globe reports, the presidential candidates John McCain and Barack Obama both back the FDIC coverage hike. Too bad the experts don't think it will make one bit of difference. "Frankly, it's a little bit misleading . . . It's almost a [public relations] tactic as opposed to a substantive change," Ann Graham, professor at Texas Tech University School of Law and a former regional counsel of the FDIC, told the Globe. Still, lifting the FDIC cap is seen as a major lobbying coup for struggling community banks, the NYT writes. Hopes of salvaging the Paulson Plan triggered a "whiplash-inducing rebound" for the markets on Tuesday, the WSJ reports, with the Dow, S&P and Nasdaq all finishing strongly.

If there were any doubts the Europeans could survive the credit crisis while the U.S. faltered, they've been completely obliterated this week. "In the last two days, governments from London to Berlin have seized or bailed out five faltering banks. In Ireland, where rumors of panicked withdrawals from banks spooked the stock market, the government has offered a two-year blanket guarantee on all deposits and bank debt," the NYT reports. The domino effect of failing European banks once again played out in Belgium on Tuesday where Dexia, one of the world's biggest lenders to local governments, was bailed out by the Belgians, the French and Luxembourg to the tune of €6.4 billion ($9 billion), The Guardian reports. Forbes quips the back-to-back bailouts of first Fortis, then Dexia marked one of the few times in recent memory the entire country of Belgium could agree on anything.

If only Ireland and the U.K. could learn from the suddenly collegial Belgians. In the U.K. on Wednesday, the pressure was mounting on Prime Minister Gordon Brown to follow in Ireland's lead (and possibly that of the U.S.) in extending the guarantees on British savers’ bank deposits to calm panicky bank customers, the Financial Times reports. Brown says he will wait for markets to calm down before considering such an action, but he could already be too late. The Times of London reports savers are emptying their accounts in the U.K. and heading across the Irish Sea to a land where all deposits are fully guaranteed. “If this is legal, then I’m a banana,” one senior British banker fumed to The Times, arguing that the Irish guarantee amounted to unfair state aid.

Another day, another round of financial sector layoffs. Swiss Bank UBS looks set to cut another 1,900 jobs in its investment banking and equities units, Reuters and Bloomberg report. The redundancies represent some 10% of UBS' investment  banking staff and come on the heels of last week's 1,100 cuts at HSBC's investment division. Meanwhile, PricewaterhouseCoopers, administrators of Lehman Brothers' European division "have cut 750 jobs at the firm with immediate effect," the BBC reports. The cuts will come at the fixed income and personal investment management units, and PwC said it was "extremely disappointed" that a buyer could not have been found to save the jobs.

The media may have moved on from Hurricane Ike but motorists throughout the Southeast are still feeling its effects as they search in vain for gas. Business Week reports that the Southeast is  "experiencing a hurricane-triggered gas shortage that has thrown the region's gas stations into chaos". The problem lies in the pipeline network. Even though all but two of the Gulf Coast refineries that shut down during the storm are now back in operation, it's taking time to refill the pipelines feeding the region. The fallout has been "fistfights and fender benders among drivers jockeying for position before the gas runs out." 

And finally, if you happened to see Google shares hit the absurdly low level of $25 and change yesterday afternoon, you weren't dreaming. Yesterday's trading day started normally for Google. The share price was hovering around its open, at $396, when, in the final minutes of the session, it plunged to $25.80, the result of a massive order that sent the bid-offer price on Google shares to an obscenely low level, CNNMoney reports. Alas, it was a mistake that's been corrected, a Nasdaq spokesman told CNNMoney. Google's closing share price has been reset to $400.52 and all errant trades will be cancelled. Order has been restored.