Dreamworks, DineEquity stocks drop

Part of the turmoil for business in Glendale and the nation lies in constricted credit options and decreasing liquidity options after multiple bank failures and future economic concerns, said Nancy Sidhu, vice president and senior economist for the Los Angeles Economic Development Corp.

“There is no question that there appears to be a credit crunch,” she said. “The world is changing very rapidly.”

Bush, who first floated the bailout proposal last week, said that the lifeline to Wall Street was needed to resuscitate an economy that had dipped farther into the red.

Specifically, it would have delivered $700 billion to struggling Wall Street firms that have taken on bad debt in the face of nationwide credit busts and record foreclosures.

But Democratic lawmakers worried the proposal did not deliver enough protections for taxpayers. Legislators have not yet scheduled another vote on the matter, though Schiff said the House could come back by the end of the week for another try at hammering out a bipartisan package. Between now and then, there is much work to be done, he said, especially in the aftermath of Monday’s vote that he said was “tense” and further exemplified the nation’s weak economic standing.

“I don’t think the fundaments of our economy are strong at all,” Schiff said. “There is a crisis in the credit market and a foreclosure catastrophe. I think there are a number of steps that need to be taken.”

For Schiff, those include passing another federal stimulus package to reinvigorate local economies and ridding the Federal Deposit Insurance Corp. of its $100,000 basic insurance limit “so people can have confidence in the market” and “stop this run on community banks.”

On Thursday, Washington Mutual collapsed into the arms of J.P. Morgan who spent $1.9 billion to purchase the bank’s deposits and early Monday morning, the FDIC announced that Citigroup Inc. acquired the banking operations of Wachovia Corp.

While many House Democrats opposed the bill, Republicans were divided about the best way to deal with the impending economic collapse, evidenced by their bifurcated vote and tepid support. Dreier said he cast a reluctant vote for the package Monday to help revive the economy.