September 29 2008 at 05:59 AM

U.S. Seals $700 Billion Bailout Deal

Andy Reinhardt

After days of intensive negotiations, the White House and Congressional leaders agreed Sept. 28 to an unprecedented $700 billion financial bailout package that will see the government buying up toxic mortgages and mortgage-backed securities in an effort to ease the U.S. and global credit crunch.

Details of the measure, which could be voted on by the House of Representatives as early as Monday, remain somewhat vague, and opposition lingers from some conservative Republicans. After an initial rise, stock markets in Asia and Europe tumbled Sept. 29 on the news.

Source: Wall Street Journal, BusinessWeek, Bloomberg

European Leaders Move Fast to Rescue Two Banks

Only days after a top EU official said he doubted Europe would broker U.S.-style financial bailouts, regulators moved swiftly over the weekend to contain spreading malaise and rescue two troubled banks, British mortgage lender Bradford & Bingley and Belgian giant Fortis.

The British government will take over B&B’s troubled $92 billion loan portfolio, while Spain’s Santander will pick up its $36 billion retail and savings business. Fortis will be partly nationalized through a $16 billion collective bailout by the governments of Belgium, Luxembourg, and the Netherlands.

Source: New York Times, Reuters, Times of London

Germany’s Hypo Real Estate in $50 Billion Bailout

In a further sign of spreading credit woes, German lender Hypo Real Estate, which has extensive exposure to the troubled U.S. and Irish mortgage markets, will be bailed out through the combined efforts of the German government and a group of private financial institutions.

Source: Wall Street Journal

Wells Fargo Looks Likely to Nab Wachovia

Wachovia was in advanced talks late Sept. 28 on a possible acquisition by Wells Fargo, which appeared to edge out rival Citigroup in its quest to take over the fourth-largest retail bank in the U.S.

Source: Times of London

ECB Aims to Boost Eurozone Liquidity

The European Central Bank said Monday that it will make additional short-terms loans available to commercial banks in a bid to shore up liquidity in the 15-member eurozone.

Source: MarketWatch

Flight Attendants Back Alitalia Rescue

Italy’s Anpav union, which represents primarily flight attendants, joined four other unions in supporting a government-engineered $1.5 billion rescue plan for the troubled airline that taps a group of Italian investors.

Source: Wall Street Journal

Airbus Launches Push for Chinese Market

The European aircraft maker took the next step in its efforts to win greater share of the Chinese aviation market, opening a $600 million A320 assembly plant in China and vowing to source $1 billion in local components.

Source: The Guardian

EU Presses U.S. over ‘Open Skies’ Treaty

In the latest round of deregulation talks, the European Union pressed the U.S. to ease limitations on foreign ownership of American carriers, but the effort was inconclusive owing to the impending change in Administration.

Source: Wall Street Journal

Reality Bites for Dubai Property Market Boom

Fears are growing that Dubai’s once-buoyant property market will be hit by the global liquidity crisis, as lenders in the oil-rich region become more cautious.

Source: Times of London

U.S. Political Campaign Discourse Explodes Online

The Web is magnifying the influence of TV’s Jon Stewart and a host of other commentators, engaging the American public like never before.

Source: BusinessWeek

Lewis Hamilton Extends Formula One Lead

Finishing third behind former teammate Fernando Alonso, McLaren-Mercedes driver Lewis Hamilton stretched his world championship lead to seven points on Sept. 28 as rival Felipe Massa’s prospects of winning the inaugural Singapore grand prix evaporated in a Ferrari refueling fiasco.

Source: The Guardian

Conversation of the Day: Bailout—Deal or No Deal?

Reader All Together writes: “What if we all took a two-week moratorium? That should give the government enough time to make the right choice and not rush to make a bad decision.”

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2008/09/29