– 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 liquidity crisis that began with the collapse of Bear Stearns and has led to the fall of Lehmen Brothers (NYSE:LEH) is spreading. This has prompted foreign central banks to bolster liquidity in domestic markets, reports Jason Simpkins. Even the Bank of China decided to cut its benchmark lending rate. It is its first rate cut in six years.

Penny Sleuth’s Tom Bulford says Britain’s politicians and banking bosses are desperately trying to blame this financial crisis on external factors. Nobody is willing to accept responsibility for the reckless business practices of the past decade. This spells more bad news for UK stocks and the British pound…

In the currency market, the dollar was unchanged against the euro. Late Wednesday, the euro was trading at $1.4508 vs. $1.4507 on Tuesday.  Earlier in the day, the euro had fallen to a seven-month low of $1.4384. The buck also hit a one-year high of $1.0748 against the loonie before easing, and rose to $1.7776 vs. the British pound, which was over $2 in July.

Fleet Street Daily editor Ben Traynor says more and more analysts are predicting a “calamitous” breach of 5000 for Britain’s FTSE100 benchmark index. Ben says the stock market slump means it is a good time to increase your holdings of cash…