The big news is about Paulson’s Economic Patriot Act, which looks set to pass Congress. The ultimate question is in what guise the plan passes. Will it give the U.S. Treasury carte blanche or will Congress have oversight? What provisions for homeowners will be connected? Will pay restraint be associated with the bailout? These are all important questions.
In addition, it is unclear whether buying the distressed assets results in more writedowns as the CBO head believes or whether it results in revaluations upward as I believe Paulson wants.
See my section on fear mongering to see why I cal the bill the Economic Patriot Act.
In related news, WaMu, Fortis, and Bradford and Bingley are three institutions under particular pressure in credit markets as we await a final Congressional decision. See the articles below for specifics.
Oh, and North Korea ousted UN inspectors to start up their nuclear program again. Those sneaky bastards (see story here).
Economic Patriot Act
Paulson cannot be allowed a blank cheque – George Soros, FT
A $700 billion slap in the face – Paul Krugman
Kaufman: $800 billion U.S. budget deficits now “the norm” – Reuters (Dr. Doom speaks)
Faber: Fed Acted Like a Liquidity Drug Dealer – Big Picture
Faber Says U.S. $700 Billion Rescue Plan Isn’t Enough – Bloomberg
A Bailout We Don’t Need – James Galbraith, Washington Post
Fear mongering the plan
People should be more scared than mad, Paulson says – Politico
Palin says country could face another Depression without bailout – Politico
The Politics of Economics
Rush to Rescue Banks Brings Flashbacks of War: Margaret Carlson – Bloomberg
Germans Receive Bush Speech Coldly – NY Times
Boxer: Presidents ‘don’t get to have a time out’ – Politico
Online activists rise against the bailout – Politico
Plain Old Politics
McCain’s Ploy – Washington Post(McCain’s refusal to debate on Friday is being widely panned)
McCain gambles with his political future – Politico
Frank: Republicans “winced” when McCain was mentioned in meeting – Politico
John Kerry II versus George Bush III – Politico
U.S. election: Sarah Palin featured in church video denouncing witchcraft – Guardian (I’m sorry but this is just plain bizarre.)
Whether Brown survives, Labour has already changed – Guardian
N.Korea ousts U.N. monitors, to restart atom bomb plant – Reuters
Financial Services
Fitch: Partial Sale Increasingly Likely for WaMu; IDR Downgraded to ‘B-‘ – Market Watch
Bradford & Bingley – FT Lex
Fortis suffers amid liquidity speculation – FT
Hedge fund chief warns on wrongdoing – FT
Quick Action Stops Run on Hong Kong Bank Giant – NY Times
Global Economy
Ireland Becomes First Euro Nation to Enter Recession – Bloomberg