Morning Brief: Time to panic?

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If Ben Bernanke and George W. Bush intended to restore confidence in the U.S. economy yesterday, they failed miserably. “A sense of economic gloom gripped Washington on Tuesday,” Steven R. Weisman of the New York Times writes. “An Economy Thrown in Turmoil” reads the screaming headline on the Washington Post this morning. “This is no ordinary economic crisis, and it won’t be over anytime soon,” USA Today‘s David J. Lynch warns.

In a grim assessment, Bernanke acknowledged that the risks to U.S. economic growth are “skewed to the downside,” and even an upbeat Bush admitted that “we’re going through a tough time.” Bernanke returns to Capitol Hill today.

Meanwhile, bank shares took another beating Tuesday, and Wachovia joined the list of troubled regional banks to watch.

Decision ’08

Barack Obama and John McCain are moving closer on Afghanistan, though their assessments of Iraq still differ sharply. Bush reacted strongly yesterday to Obama’s critique of the Iraq war.

Global Economy

The United States faces a global financing crisis, Merrill Lynch warns. Bloomberg reports that global confidence in the U.S. economy is slipping dramatically.

Maverick investor Wilbur L. Ross Jr. is betting that the oil bubble will pop.

The U.S. Securities and Exchange Commission is dishing out subpoenas related to the collapse of Bear Stearns.

Americas

U.S. Defense Secretary Robert Gates decried the “creeping militarization” of U.S. foreign policy.

Nobody knows how much oil the U.S. continental shelf holds.

In Argentina, the showdown over taxes on farm exports is coming to a head.

Asia

Anwar Ibrahim has been arrested. FP spoke with the Malaysian opposition leader in April.

U.S. troops have temporarily abandoned an outpost in Afghanistan.

Time looks at China’s efforts to ban air pollution for the Olympics.

Middle East and Africa

Hezbollah has provided what it says are the bodies of two Israeli soldiers. Now it’s up to Israel to verify the remains and turn over its prisoner, Samir Kantar, in exchange.

Iran announced new military exercises, even as the United States planned to send a top diplomat to a nuclear meeting for the first time. More here.

The legacy of apartheid is still hurting the South African economy.

Europe

The price of natural gas in Europe could double within a year, some analysts predict.

Europe is headed for recession, and yet the euro is hanging tough. What gives?

A quarter of the world’s Anglican bishops boycotted a major conference in Canterbury, outraged at the ordination of an openly gay bishop.

Today’s Agenda

German Chancellor Angela Merkel hosts visits Algerian President Abdelaziz Bouteflika.

Nigeria’s president is visiting London to discuss the security of his country’s oil supplies.

The Royal Africa Society is hosting a meeting on the food crisis.

Madrid welcomes top religious leaders for a Saudi-led meeting on interfaith dialogue.