The New York Times isn't running the story yet, but CNBC is reporting that House Republicans have scuttled the $700 million bailout plan. However, all may not be lost. Per Clusterstock:

In the initial voting the bailout fell short by over a dozen votes from what it needed to pass in the House of Representatives today, shocking the market and Capitol Hill insiders.

House members, however, can change their votes until the vote has closed, according to a source on the Hill. Right now serious arm-twisting is getting down on the House floor, as the House leadership pushes to get members to change their vote and get the measure passed.

Update: The Times is on board now, complete with scary headlines. A friend in the Morgan Stanley offices just wrote to tell us: "I haven't seen so many quiet people staring at a TV screen since the crash of '87, when the entire 48th floor of Smith Barney was standing in front of a Bloomberg watching their net worth vanish."