News Buzz: Fed's Emergency Debt Plan, McCain's Alleged Links to Group in Iran-Contra Case

Fed to Buy Massive Amounts of Short-Term Debt: Invoking Depression-era power under "unusual and exigent circumstances," the Federal Reserve announced a dramatic plan Tuesday to buy enormous amounts of short-term debts. Many companies depend on "commercial paper," a type of short-term borrowing, to finance daily operations like making payrolls, and the $99.4 billion daily market for that has all but disappeared, leaving companies vulnerable. By purchasing commercial paper itself, the Fed hopes to jolt the market. After yesterday's drop in the Dow, the announcement seemed to soothe some investors, at least initially.

McCain Linked to Private Group in Iran-Contra Case: Amid the recent mudslinging that has accompanied both presidential campaigns and set the stage for tonight's debate, new allegations are emerging about John McCain's past ties to a private group that aided the guerrillas fighting against Nicaragua's leftist government. Called the U.S. Council for World Freedom, the organization dedicated itself to abolishing communism worldwide and had ties to Central American death squads and former Nazi collaborators. The council supported the Nicaraguan rebels, known as the Contras, who were financed in part by secret arms sales to Iran. The group's founder says McCain was "on the board" in the early 1980s but not actively involved. The accusations came as the McCain camp has refocused its own campaign on Barack Obama's ties with William Ayers, the cofounder of the Weather Underground who met Obama when the two worked on education reform in Chicago.

China Says U.S. Arms Sale to Taiwan Harms Ties: China responded to the United States' planned $6.5 billion dollar arms sale to Taiwan by saying that the move threatens both China's national security and military relations between Beijing and Washington. China claims Taiwan as its own and has long protested U.S. contacts with the island, so its rhetoric isn't out of the ordinary—but it has backed the rhetoric up by canceling an upcoming visit to the United States by a Chinese general and by indefinitely postponing meetings to discuss stopping the spread of weapons of mass destruction.