WASHINGTON: Acting to avert a possible financial crisis worldwide, the U.S. Federal Reserve Board reversed course Tuesday and agreed to an $85 billion bailout that would give the U.S. government an ownership stake in the troubled insurance giant American International Group.
The decision, announced by the Fed only two weeks after the Treasury Department took over the quasi-government mortgage finance companies Fannie Mae and Freddie Mac, is the most radical intervention in private business in the central bank's history.
Another thrashing for stocks
NEW YORK (CNNMoney.com) -- Stocks plummeted Wednesday, with the Dow industrials falling 449 points in its second worst session of the year, as the government's emergency rescue of AIG amplified fears about the stability of financial markets.
The Dow Jones industrial average (INDU) lost 449 points, or 4% and fell to the lowest level since November 2005. The Standard & Poor's 500 (SPX) index lost 4.7% and fell to its lowest point since April 2005. The Nasdaq composite (COMP) lost 4.9% and ended at its lowest point since August 2006.
Selling pressure eased in the mid-afternoon as the jump in oil and gold prices boosted the underlying stocks. But any recovery attempt lost steam and the market finished the session just above the worst levels of the day.
After the close, a New York Times report said that Morgan Stanley (MS, Fortune 500) was considering a merger with Wachovia (WB, Fortune 500) or another bank.
Russia Suspends Stock, Bond Trading As Market Dives
MOSCOW (Reuters) -- Russian bourses have halted stock and bond trading, amid the worst falls since the country's 1998 financial collapse and the Finance Ministry pledged a total of $60 billion of funds to help local banks.
Investors have dumped Russian assets after global financial turmoil combined with falling oil prices and Moscow's war with Georgia to form an especially toxic cocktail for local markets.
"We don't give a damn anymore as to what happens in the West. The market is falling as people are in dire need for cash," said Maksim Gulevich, director of equities trading at UBS.
Our 'friends' the Russians have been busy.
Russia in Georgia separatist pact
Russia has signed friendship treaties with Abkhazia and South Ossetia, sealing diplomatic ties with the breakaway Georgian regions.
The accords include a pledge of military assistance from Russia.
Georgia's President Mikhail Saakashvili told the BBC he was "deeply troubled" by the treaties, calling Russia's move "classic invasion and annexation".
President Medvedev threatens Russian Arctic annexation
Russia triggered a fresh scramble for the oil wealth of the Arctic yesterday when President Medvedev called on his security chiefs to establish a formal border in the region.
Mr Medvedev laid claim to a vast tranche of the Arctic, telling his National Security Council that it had “strategic importance” for Russia. The US Geological Survey estimates that the region contains 90 billion barrels of oil, as well as gas reserves – all of it increasingly accessible as global warming shrinks the ice cap.
“We must wrap up all the formalities for drawing the external border in the continental shelf. This is our direct responsibility to future generations,” Mr Medvedev told the Kremlin meeting.
Meanwhile, Ukraine is falling apart:
Sept. 8: Ukraine president Viktor Yushchenko accuses PM Yulia Tymoshenko of treason
Ukraine's President Viktor Yushchenko has accused Yulia Tymoshenko, the Prime Minister, of high treason amid a bitter political struggle over whether the country's future lies with the West or with Russia.
Miss Tymoshenko has revealed that she has been summoned by prosecutors to answer the president's charge of treason as Ukraine's two rulers battle it out for power ahead of a 2010 presidential vote over their country's future direction.
President Yushchenko has accused the prime minister of failing to condemn Russia's actions in Georgia, and the presence of the Russian naval fleet in Ukraine, in exchange for political support from the Kremlin.
Miss Tymoshenko hotly denies the allegations. The Ukraine's prosecutor has declined to comment.
Ukrainian Coalition Collapses Amid Political Infighting
Political infighting has led to the collapse of Ukraine's governing coalition, raising the prospect of difficult negotiations to form a new government or a third parliamentary election in as many years. VOA correspondent Peter Fedynsky has been following the Ukrainian political drama from Moscow.
Ukraine's governing coalition collapsed less than 10 months after it was formed with a bare minimum of votes in the country's 450-seat parliament, the Supreme Rada. President Viktor Yushchenko's political party left the coalition earlier this month, and Speaker Arseny Yatsenyuk made the collapse official on Tuesday.
Yatsenyuk made the official announcement regarding the termination of the Coalition of Democratic Forces in the Supreme Rada of Ukraine, which was created by the presidential party, Our Ukraine, and the Yulia Tymoshenko Bloc on November 29, 2007.
Ukraine's government falls apart
Ukraine's ruling pro-Western coalition has officially collapsed, the speaker of the Ukrainian parliament says.
President Viktor Yushchenko has been involved in a long-running dispute with Prime Minister Yulia Tymoshenko.
The president's Our Ukraine bloc left the coalition earlier this month. Parliament now has 30 days to try to form a new ruling coalition.
If those efforts fail, Mr Yushchenko can dissolve parliament and call a snap election.
some quick history
Recognise Georgian regions says Ukraine's Crimea
SIMFEROPOL, Ukraine, Sept 17 (Reuters) - Parliament in Ukraine's Crimea peninsula, defying the country's pro-Western leaders, called on the national parliament to follow Russia's example and recognise Georgia's two separatist regions.
Crimea, a Ukrainian region with a degree of self-government, is populated mainly by ethnic Russians and Russian-speakers and local leaders have often adopted pro-Russian positions or even sought to rejoin Russia.
Some analysts suggested that Russia's conflict with Georgia over South Ossetia could rekindle pro-Moscow or even separatist sentiment in Crimea.
And along those lines...
Western influence at UN wanes as power balance shifts
The west's efforts to use the United Nations to promote its values and shape the global agenda are failing, according to a detailed study published today.
A sea change in the balance of power in favour of China, India, Russia and other emerging states is wrecking European and US efforts to entrench human rights, liberties and multilateralism. Western policies in crisis regions as diverse as Georgia, Zimbabwe, Burma or the Balkans are suffering serial defeats in what the study identifies as a protracted trend.
The haemorrhaging of western power, as reflected in longer-term voting patterns in key UN bodies, is mirrored by the increasing clout of China, Russia and the Islamic world, according to an audit of European influence at the UN by the European Council on Foreign Relations.
[Saw that comin'. --Amanda]
***
Israeli primary to decide who succeeds Olmert
The selection of a new head of the party, Kadima, was prompted by police investigations of Prime Minister Ehud Olmert on allegations that he took money illegally while he was mayor of Jerusalem and industry minister. Olmert has promised to step down, but is expected to stay on as a caretaker prime minister until a new coalition is formed.
Much about the Wednesday primary and its aftermath is still up in the air, partly because Kadima is less than three years old. It was formed by Prime Minister Ariel Sharon before he fell into a coma caused by a stroke in early 2006.
Sharon had been a leader of the right-wing Likud party but, like Livni and Olmert, who also began on the right, became convinced that the only way for Israel to maintain its status as a Jewish democratic state was to end its occupation of Gaza and the West Bank, where nearly four million Palestinians live.
Mofaz aides cite irregularities, urge him to appeal result
Foreign Minister Tzipi Livni clinched the Kadima primary on Wednesday overnight by a mere 431 votes, as Judge Dan Arbel, heading the party's primary committee, announced the result.
Livni won 43.1 percent of the vote while Transportation Minister Shaul Mofaz won 42%. Public Security Minister Avi Dichter and Interior Minister Meir Sheetrit won 6.5% and 8.5%, respectively.
The lawyers of Mofaz, however, urged him to appeal the result, citing irregularities in several polling stations.
One of the lawyers, Yehuda Weinstein, complained about three issues in the primary: Extending the time voters could reach ballots by 30 minutes, irregularities in several stations and the fact that media outlets began publishing exit polls 15 minutes before the ballots closed.
http://en.wikipedia.org/wiki/Tzipi_Livni
In Sharon's Cabinet, Livni was an avid supporter of the prime minister's disengagement plan and was generally considered to be among the key dovish or moderate members of the Likud party. She often mediated between various elements inside the party, and gained recognition for her efforts to achieve peace, particularly her successful efforts to have the pullout from the Gaza Strip ratified by the Knesset. On 12 November 2005, she spoke at the official yearly commemoration of Yitzhak Rabin's assassination.[16]
*headdesk*
***
10 Are Killed in Bombings at Embassy in Yemen
BEIRUT, Lebanon — Militants disguised as soldiers detonated two car bombs outside the United States Embassy compound in Sana, Yemen, on Wednesday morning, killing 16 people, including 6 of the attackers, Yemeni officials said.
Yemeni soldiers took up positions in front of the U.S. Embassy in Sana on Wednesday.
No American officials or embassy employees were killed or wounded, embassy officials said. Six of the dead were Yemeni guards at the compound entrance, and the other four killed were civilians waiting to be allowed in.
It was the deadliest and most ambitious attack in years in Yemen, a poor south Arabian country of 23 million people where militants aligned with Al Qaeda have carried out a number of recent bombings.
Armed Forces face mass walk out over poor funding, report warns [Britain]
The Armed Forces face a mass walk out with under-funding leading to a "major crisis" in defence, an influential report backed by former military chiefs warns.
They will soon be "paralysed" by the growing number of resignations and will take a decade to recover, the UK National Defence Association paper says.
A “huge burden” has been placed on the Forces with more than 12,000 troops deployed in Iraq and Afghanistan that has led to an immense strain on both troops and equipment.
All three major political parties must now unite to back the "woefully under-funded" Forces whose budget urgently needs to be increased from the current £34 billion to £50 billion over the next three years, it states.
"The national interest requires the full-hearted engagement of Government and Opposition to rehabilitate our Armed Forces and repair our defences. Now is no longer the time for party politics," said Winston Churchill, the UKNDA's president and grandson of the wartime leader.
He warned that the Forces were "in crisis" with funding the lowest since the Thirties when "inadequate defence provision paved the way directly to world war".
EU to help Nigeria with pipeline
The European Union has offered to help Nigeria develop plans for a trans-Saharan pipeline to take gas from Nigeria to Europe.
The offer was made during a visit by the EU's energy commissioner to the Nigerian capital.
The move is part of plans to reduce EU reliance on Russian energy supplies.
It comes after Russia's Gazprom expressed interest in the pipeline and signed a memorandum of understanding with the Nigerian government.
The memorandum covers co-operation in the exploration, development and transportation of gas reserves.
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