– The White House and Congress have agreed on Hank Paulson’s $700 billion bank rescue bill. The bill means the US government could be about to become the biggest slum landlord in history as it buys up junk mortgage and securities at above-market prices.

– Dems have included in the bill a clause that will limit executive pay within companies that sell assets to Treasury through an auction process. The bill will prohibit a company that sells more than $300 million of assets to Treasury to make “golden parachute” payments to executives.

– The bill makes only passing reference to protecting taxpayers’ money. It stipulates that if the government is at a net loss after five years the president will be required to seek reimbursement from participated banks and institutions.

– The WSJ has published a summary of the bill, which does a good job of explaining what is involved. There is also a PDF version of the bill available.

– Meanwhile, another government-sponsored bank buyout has gone through. Citigroup (NYSE:C) will acquire the banking operations of Wachovia (NYSE:) deal backed by the Federal Deposit Insurance Corp. All Wachovia depositors are protected and there will be no cost to the FDIC, according to reports.

– Worries over the bill have sent European shares towards three-year lows.

– US stock-index futures also dropped. This from Bloomberg:

Citigroup Inc. lost 4 percent and JPMorgan Chase & Co. decreased 6.2 percent after the bailout of Belgium’s Fortis and seizure of U.K. mortgage lender Bradford & Bingley prompted banks to hoard cash. Wachovia Corp., under pressure to seek a buyer, retreated 16 percent on concern suitors may wait to see whether regulators will seize the bank. Exxon Mobil Corp. and Freeport-McMoRan Copper & Gold Inc. fell as much as 2.6 percent after commodities retreated on speculation the credit crisis will exacerbate the global economic slowdown.

– The British pound fell the most against the dollar in 15 years. The euro also dropped against the dollar. “We are seeing some very, very big moves with the pound and ones of a fairly chunky magnitude with euro-dollar as well,” said Martin McMahon, a currency strategist in Zurich at Credit Suisse Group quoted in Bloomberg. “It’s now clear that there is not just a US problem in the banking sector. There are problems in Europe and the concern is that it might just be the tip of iceberg.”

– Oil prices have fallen to almost $103 a barrel on fears of a global slowdown.

– The next to shoe to fall could be hedge funds, reports The New York Times.

Even as Washington reached a tentative agreement on Sunday over what may become the largest financial bailout in American history, new worries were building inside the nearly $2 trillion world of hedge funds. After years of explosive growth, losses are mounting - and so are concerns that some investors will head for the exits.

No one expects a wholesale flight from hedge funds. But even a modest outflow could reverberate through the financial markets. To pay back investors, some funds may be forced to dump investments at a time when the markets are already shaky.

– How should investors react to all the doom and gloom? By looking to overseas investments, says Keith Fitz-Gerald in Money Morning. That’s because the bailout will cause national debt to climb, the US inflation to soar and the dollar to tank over the long term.