Morning Brief: Time for Plan B?
Top Story Win McNamee/Getty Images With credit markets still largely frozen, the U.S. Treasury Department is considering a new strategy: taking direct equity stakes in struggling banks in the hopes that they will resume lending. According to the Wall Street Journal, “No such moves are imminent,” suggesting that Treasury is floating a trial balloon via ...
According to the Wall Street Journal, “No such moves are imminent,” suggesting that Treasury is floating a trial balloon via the press.
The idea has been kicked around by many expert critics of the recently passed $700 billion bailout bill, which Treasury officials say gives them the authority to take part ownership of any banks that request it. It resembles Britain’s own recently announced $87 bailout plan as well as the strategy employed successfully by Sweden in the 1990s.
“One thing we must recognize: Even with the new Treasury authorities, some financial institutions will fail,” cautioned Treasury Secretary Henry Paulson in comments alluding to the move.
The news came as the U.S. Federal Reserve authorized hobbled insurance giant AIG to receive another $38 billion.
Oil prices, meanwhile, are collapsing, leading OPEC to consider an emergency meeting.
Some Democratic strategists are predicting a landslide win for Barack Obama.
One of the winners of the Nobel Prize in Chemistry endorsed Obama.
Change of plans: A federal appeals court temporarily blocked the release of 17 Uighurs from Guantanamo.
Hugo Chavez’s information minister warned King Juan Carlos of Spain not to associate with Venezuela’s opposition and independent media.
Afghanistan is in a “downward spiral” that its central government is likely unable to reverse, according to a leaked U.S. intelligence report.
At least eight people were reportedly injured after a suicide attack on police headquarters in Islamabad, Pakistan.
North Korea may be about to test more missiles.
Middle East and Africa
Riots broke out in Acre, Israel, after an Arab Israeli man drove into an area where Jews were observing Yom Kippur.
Zimbabwe’s official inflation rate has reached 231,000,000 percent.
Somali pirates released some, but not all of their hostages.
Europe and the Caucasus
Ukrainian President Viktor Yushchenko called snap elections for December.
Icelanders can’t believe their country is going belly-up.
Central and Eastern Europe are avoiding the worst of the financial crisis.
Tokyo hosts the world’s largest video-game convention.
Slovak Republic President Ivan Gasparovic visits the White House.
NATO defense ministers are gathering in Budapest to discuss Afghanistan and Georgia’s breakaway republics.
Yom Kippur, the Jewish day of atonement, ends today.
Blake Hounshell is a former managing editor of Foreign Policy.
More from Foreign Policy
Chinese Hospitals Are Housing Another Deadly Outbreak
Authorities are covering up the spread of antibiotic-resistant pneumonia.
Henry Kissinger, Colossus on the World Stage
The late statesman was a master of realpolitik—whom some regarded as a war criminal.
The West’s False Choice in Ukraine
The crossroads is not between war and compromise, but between victory and defeat.
Washington wants to get tough on China, and the leaders of the House China Committee are in the driver’s seat.