US shares fell almost 200 points in early trading on Thursday as doubtful investors wait patiently to see if the House of Representatives will vote for the new $700 billion bailout plan to pass through after last night’s pass by the US Senate.

The much talked about bailout plan is now been named the rescue plan and has more clauses than the original bill in hope that the second time around the House of Representatives will pass it.

The Dow Jones Industrial average fell back 192.1 point to 10,639, this decrease came when traders were told about new data showing that there was a sharp fall in factory orders and that people claiming jobless benefit was the highest for seven years.

The FTSE 100 index of leading stocks tumbled into negative territory, down 43.8 points to 4,915.79. The House of Representatives are expected to vote again tomorrow, however, although it’s been passed by the US Senate tensions are still high as to if the House will vote in favour of the bailout bill.

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Indian shares tumbled almost 4 percent on Monday amid fears that the European financial institutions could be the next victim of the credit crisis following the collapse of Wall Street taking four last US banks.

ICICI Bank Ltd the number one private lender led the declines, falling 12.1 percent to 493.30 rupees. In mid-market hours ICICI made a statement saying that its UK subsidiary has no exposure to American sub-prime credit.

The Bombay Stock Exchange’s benchmark 30-share Sensitive Index plummeted 506.43 points or 3.87 percent to 12,595.75, although earlier days trading was at the lowest for a year and a half at 12,402.84 points.

On Monday The UK government authorised the sale of Bradford & Bingley branch network to Spanish banking giant Santander and the rest of the group will be nationalized. The Dutch, Belgian and Luxembourg governments rescued Fortis the large financial firm preventing a spread of failure as credit crisis concerns engulf the world.

Hypo Real Estate Holdings A.G. the German lender signed a last-minute deal with the government and a consortium of banks to aid in the financial strain and Iceland’s government brought a 75 percent stake of Glitnir Bank after the lender’s funding position declined.

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HBOS shares fell by more than 10 percent on Tuesday, another sign that shows that the Lloyds TSB takeover will not solve its funding problems with another downward slide in mortgage lending analysts say that they are still concerned.

The HBOS share price was down 11.5 percent at 185p by 9.15 GMT on Tuesday, valuing its offer at 212p per HBOS share. This comes as reports show that UK mortgage approvals for house purchases fell 64 percent in August from last August which is a record low.

Britain’s largest home lender HBOS was taken over last week by Lloyds TSB. Although analysts fear that not all shareholders will agree with the takeover which needs 75 percent approval, and there are increasing concerns that the Federal Government bail-out plan may lead to more trouble.

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Freddie Mac and Fannie Mae saw unyielding demand for $5 billion of new securities on Wednesday, even when large overseas investors slashed their exposure to both troubled finance companies.

The key to running their business and supporting the housing market was highlight through their latest sales that continued access to debt funding. Freddie Mac sold $3 billion of two-year notes to yield 0.975 percentage point more than Treasuries, up from 0.88 point at its July sale of the same maturity.

Overseas investment had fallen off in recent months, after Freddie Mac and Fannie Mae announced $13 billion in losses, so Investors were feeling better about the demand rising slightly in Asia.

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Broker, Mergie has said that there seems to be an oversupply, in 2005 that same house sold for $110,000. Fannie Mae has acquired twice as many homes through foreclosure, it is these unsold properties that are now weighing heavy on the company’s stock.

Fannie Mae lost half of their stock since June 5, part of this problem were late payments along with a huge number of foreclosures.

Both Fannie Mae and Freddie Mac owned a record $6.9 billion of foreclosed homes on March 31. This figure is huge when you consider that $8.56 billion are owned by all 8,500 U.S. commercial banks and savings and loans.

Economists Ethan Harris and Michelle Meyer have said that both Fannie Mae and Freddie Mac stand to lose $1.39 billion on the foreclosed houses they currently own.

Read more at Bloomberg

Just 8.3 per cent of HBOS shareholders took up the rights to buy new shares, which had closed on Friday. Underwriters Morgan Stanley and Dresdner Kleinwort who fully underwrote the capital rising, they sold another 29.5 per cent at the rights price of 275p on Monday.

Both investment banks will now take at least 40 per cent of the stock; they will now have 932 million shares.

The reason that the take-up for the rights issue was so low was because HBOS shares traded under the offer price just days before the lead up to the closing offer.

HBOS shares along with a number of other UK banks had been battered as a result of the current economy and the constant threat of a recession.

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Underwriters to the funding, Morgan Stanley and Dresdner Kleinwort, are now faced with the tough task of selling a huge number of leftover shares at 275p or above over the next two days.

Many financial experts believe that this is a tall order and it is likely that both will be left with a huge stake. There was a ray of hope on Friday however; as shares rose to 282p, this would make it easier to off load some shares.

Just last month owners of Halifax had expected first half writedowns to reach £1bn, they also warned that the UK economy would continue to slow as house prices fell further than expected.

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Bradford & Bingley’s share price is now just 52p, this meeting is now the chance to hold the troubled lender to account. Shareholders including Standard Life, Legal & General, Prudential and Insight Investments have agreed to buy about £145 million of shares between them.

Barclays and Lloyds TSB have also promised to purchase a further £150 million of the issue. Citigroup and UBS who are underwriting the rights to buy issue could end up with £105 million on their books.

Bradford & Bingley recently denied that they needed the extra cash, well today shows that they do.

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Shares of Fannie fell 28% to close at $7.03 while Freddie’s dropped 26% to finish at $5.29. Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson have had to explain their plan to the Senate Banking Committee.

Both men had to face some tough questions as to what the cost to the taxpayers would be, Paulson seemed to dodge the question and did not put a dollar on the amount of aid that both banks need.

A deal was hammered out over the weekend by the Treasury and the Federal Reserve however; this now has to be approved by Congress. Just yesterday, many financial experts had said that if the U.S. Government has to buy stakes in Fannie Mae and Freddie Mac, then current equity holders may be wiped out.

I still do not understand how Fannie Mae CEO Daniel Mudd can keep saying that the bank will not need to tap into any government money; he insists that they have a lot of capital.

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Alliance & Leicester is now thought to be very close to signing a deal with who the BBC think is Santander who own Abbey, in a deal that is worth £1.3bn. So far the Spanish bank has declined to comment.

If the £1.3bn deal is correct, then this would value the shares at 317p, that 299p plus an 18p interim dividend. Shares last night had closed at 219.5p, after today’s news they leapt to as much as 325p per share.

According to the guardian.co.uk, this increase in share prices has come as a big surprise, just last week A&L were thought to be announcing further write-downs, but with the prospect of a buyout things have taken a surprising turn.

The news of Santander and a possible takeover of Alliance & Leicester, means that the Spanish bank has no lost interest in UK Banks. Analysts in the city are warning that this takeover is not certain, and that the suffering in UK banks has not yet come to an end.