This has to be considered a shocker.  The bailout bill failed in the House, and it wasn’t especially close.  The final tally was 207-226, with Democrats supporting it 141-94, while Republicans opposed it 66-132.

How did the markets react?  Initially, with panic.  Dow dropped from around a -290 to more like a -660, but then recovered within minutes to a -400.  Within a few minutes after that, it rose a little further to about -360, a 300-point gain, but it continued to go up and down, and probably will all day long.

What does this mean?  The Senate can always initiate their own version of the plan and re-send it to the House, but that will take some doing.  Can Republicans change their votes after taking this kind of stand?

If it stands, it will be a repudiation of the leadership in both House caucuses and the Bush administration.  Pelosi couldn’t hold her caucus together, and Boehner, Cantor, Blunt, and Putnam will find themselves in the minority of theirs.

Update:  I guess this puts lie to the notion that an agreement existed before John McCain went back to Washington.  They got more Republicans today than they had last Wednesday, and it still didn’t pass.

Update II: Here’s the speech that probably killed the agreement. Pelosi blamed the collapse on George Bush and a lack of regulation, and called Republicans hypocrites for cheering free-market principles.