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Bailout struggles eroding initial upsurge

Treasury Secretary Henry Paulson (L) and Federal Reserve Board Chairman Ben Bernanke testify before the House Financial Services Committee regarding the ongoing crises in financial markets on Capitol Hill in Washington on September 24, 2008. Congress is currently considering a $700 billion bailout proposed by the Bush administration. (UPI Photo/Roger L. Wollenberg)
Treasury Secretary Henry Paulson (L) and Federal Reserve Board Chairman Ben Bernanke testify before the House Financial Services Committee regarding the ongoing crises in financial markets on Capitol Hill in Washington on September 24, 2008. Congress is currently considering a $700 billion bailout proposed by the Bush administration. (UPI Photo/Roger L. Wollenberg) | License Photo

WASHINGTON, Sept. 25 (UPI) -- The struggle to push a $700 billion financial fix into law in Washington has created even more high-stakes turmoil on Wall Street, analysts said.

While U.S. Treasury Secretary Henry Paulson Jr. and Federal Reserve Chairman Ben Bernanke faced obstacles selling the bailout plan on Capitol Hill, investors fled to the safety net of short-term U.S. Treasury bills, pushing yields sharply lower, The Times of London reported Thursday.

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In the equity markets, the quick burst in confidence provided when the plan was first proposed faded this week with major U.S. and British indexes sharply lower since Monday.

Two major industry leaders backed the plan. "Thank God we have Bernanke and Paulson," former General Electric Chairman Jack Welch said. Billionaire investor Warren Buffett backed the plan with a $5 billion bet on Goldman Sachs, an investment disclosed Tuesday.

"I am, to some extent, betting on the fact that the government will do the rational thing and act properly," Buffett said.

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