The credit crisis on Wednesday threatened to drag down Wall Street banks Morgan Stanley and Goldman Sachs. The Washington Post reports shares of the firms "tumbled as fears mounted that the two most-vaunted names in investment banking could fall victim to the credit crisis." The New York Times says on its front page, "Even Morgan Stanley and Goldman Sachs, the two last titans left standing on Wall Street, are no longer immune," underscoring "how quickly a sense of fear is spreading through Wall Street."
Media reports this morning paint a particularly dire picture of the immediate prospects for the US financial system. The New York Times reports "the financial crisis entered a potentially dangerous new phase on Wednesday when many credit markets stopped working normally as investors around the world frantically moved their money into the safest investments, like Treasury bills." Similarly, the Financial Times says "the panic in world credit markets reached historic intensity on Wednesday, prompting a flight to safety of the kind not seen since the second world war." The Wall Street Journal reports, "Fear coursed through the US financial system on Wednesday, as hope for a resolution to the year-old credit crisis faded." Another Wall Street Journal story was titled "Worst Crisis Since '30s, With No End Yet In Sight." The Wall Street Journal, Christian Science Monitor, Washington Post and McClatchy run additional analyses on the crisis.
Fed "Stretched To Its Limits" The New York Times reports on its front page, "The mighty Federal Reserve is being stretched to its limits, both in the range of problems it is being asked to fix and in its financial firepower." The central bank "has also transformed itself almost overnight into the Fed Inc. by essentially taking over American International Group after already taking on hundreds of billions of dollars in mortgage securities to help ailing financial institutions."
The Washington Post reports "the Federal Reserve has requested that the Treasury Department deposit $40 billion with the central bank in an effort to help the Fed continue to stabilize the financial markets and address concerns about whether it is overstretched." Under the headline "US Moves To Bolster Fed Balance Sheet," the Wall Street Journal reports "the Treasury, responding to worries that the Federal Reserve could be running out of financial ammunition to deal with the credit crisis, moved to reload the Fed's gun with $100 billion worth of bullets."
Washington Mutual Considers Sale The Wall Street Journal reports, "Washington Mutual Inc. is accelerating efforts to raise more capital or potentially sell itself, reaching out to potential suitors and instructing its investment bankers to step up their efforts to help the struggling thrift escape its mortgage woes." The Journal adds, "The push got another boost Wednesday when private-equity firm TPG, which led a $7 billion infusion at WaMu in April, gave the Seattle company an important concession that will make it easier to attract additional cash." The AP says "ailing bank Washington Mutual Inc. appeared headed toward a sale Wednesday after a major investor removed a potential stumbling block and nervous banking regulators began approaching the most logical buyers."
Dow Falls 449 Points. The AP reports, "The stock market took another nosedive Wednesday as the American banking system appeared even shakier and investors worried that the financial crisis is spinning so far out of control that even government rescues can't stop it." The Dow "fell 449.36 to 10,609.66, finishing near its lowest point of the trading day. The index is down more than 7 percent just this week and more than 25 percent since its record close less than a year ago, on Oct. 9, 2007. The Los Angeles Times notes "the Standard & Poor's 500 index dropped 57.20 points, or 4.7%, to 1,156.39," and "the Nasdaq composite index slid 109.05 points, or 4.9%, to 2,098.85."
23% Believe Economy In "Depression" USA Today, in a story titled "Across The USA, Anxiety Rises About What's Ahead," reports, "Nearly one-quarter of adults -- 23% -- believe the US economy is in a depression, according to a USA TODAY/Gallup Poll taken Monday and Tuesday. That's nearly double the 12% who said so in February." While "people haven't lost hope," and "nearly half -- 47% -- say they expect the US economy to be growing a year from now, "concerns are increasing."
President Bush yesterday refrained from commenting on the turmoil in the financial markets as the White House defended the bailout of AIG and other firms. AFP reports President Bush "kept silent Wednesday on battered global markets, as the White House defended huge bailouts of sinking US firms while describing the US economy in ever more sober terms." Bush, "who has not held a formal press conference since July 15th or taken questions on the economy since a September 7 television interview, worries that anything he says could become fodder in the race to the November 4 elections, explained spokeswoman Dana Perino."
The Hill reports Perino "was asked repeatedly at the daily briefing Wednesday if the president continues to think, as he has said before, that the economy remains fundamentally strong." Perino "would say only that Treasury Secretary Henry Paulson said 'that as he looks at our country and compares it with other countries, that we are in a position of strength to be able to deal with this crisis, and it's going to take us a while to work through it.'"
Roll Call says White House aides "heatedly reject suggestions by Democrats that Bush has not sought to regulate the financial sector, eagerly pointing to a list of initiatives they say Bush pressed for and Democrats resisted." White House Deputy Press Secretary Tony Fratto said,. "It's absurd to make the claim that somehow we failed to put in strong regulations."
Mixed Response On Hill To AIG Bailout The Financial Times reports, "Congress is set to step into the debate over the US Federal Reserve's $85bn rescue of AIG, with opinion divided on Capitol Hill as to whether the move was avoidable, mistaken or the result of mistakes in the past." Yesterday, "senior Democrats argued that the government had little alternative to the bail-out, but a leading Republican has attacked the move. ... Richard Shelby, the senior Republican on the Senate banking committee, expressed unease about the lurch towards interventionism."
The Washington Times reports the AIG bailout "is prompting a fierce backlash among many Republican stalwarts who openly decried the Bush administration's recent string of financial bailouts as a betrayal of the party's long-held, free-market philosophy." The Hill and Washington Post run similar stories.
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The New York Times reports "support seemed to be growing quickly on Capitol Hill for $25 billion in loan guarantees to assist the ailing auto industry." Some Republican Congressional leaders said "they were in favor of helping the automakers," and in a news conference Wednesday, Senate Harry Reid (D-Nev.) "expressed his own support for aid to the automakers."
Meanwhile, the chief executives of General Motors, Ford, and Chrysler "held a rare Capitol Hill meeting Wednesday with House Speaker Nancy Pelosi (D-Calif.) and other Democratic leaders to ask for $25 billion in government loans for the auto industry," The Hill reports. The automakers assert that the loans are needed "to revamp plants in Michigan and other states so that they can produce more hybrid cars and other fuel-efficient vehicles." According to the Financial Times, "Carmakers are ratcheting up the pressure as the industry grows increasingly concerned that the huge amounts of money the government has spent bailing out Wall Street could hit its attempt to secure funds."
The Financial Times reports the House voted 236-189 to approve a Democratic measure to lift the "longstanding ban on offshore oil drilling, opening most of the US coastline to exploration." Republicans "strongly protested the Democrats' package, calling the bill a 'sham' and a 'hoax,'" in part because it contains restrictions on drilling within 50 miles of the coast. The bill "faces a possible veto from the White House." AFP reports that in the Senate, the bill "will have to win the support of at least 60 out of the 100 senators in order to be passed, which is unlikely given the lack of Republican support."
Meanwhile, the Washington Post reports the legislation is facing criticism from another direction -- the "environmental purists" who tend to back the Democrats -- as well. The Hill reports Senate Majority Leader Harry Reid plans to hold votes on "four separate energy bills in the final week before lawmakers recess on Sept. 26," which has some senators concerned that there may be "too many competing proposals and too little political will for a last-minute breakthrough on energy legislation" before adjournment.
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Media reports continue to cast Sen. John McCain's handling of the economic issue in critical terms. ABC World News reported, "McCain was against the government bailout of AIG, before he was reluctantly for it. Here he was yesterday on 'Today.'" McCain: "We cannot have the taxpayers bailout AIG or anybody else. This is something that we are going to have to work through." NBC added that "asked about the same topic today on 'Good Morning America," the Arizona senator said, "I don't think anybody I know wanted to do that. But there are literally millions of people whose retirement, whose investments, whose insurance were at risk here. And they were going to have their lives destroyed." In a front-page story titled "John McCain Can't Seem To Find His Economic Footing," the Los Angeles Times refers to "wildly swinging rhetoric from the McCain campaign" that "has delighted Barack Obama." The Times adds, "In a matter of days, McCain shifted from invoking small-government icon Ronald Reagan to quoting Franklin D. Roosevelt, the architect of the modern regulatory state."
McCain's handling of the issue is seen as giving Sen. Barack Obama an opening. The Wall Street Journal reports "the crisis on Wall Street and renewed attention to the nation's economic woes have created new opportunity for...Obama to regain control of the campaign debate after weeks of being on the defensive against John McCain." USA Today adds, "After a week in which the political debate kept coming back to lipstick and pigs, this week's economic implosions have refocused the nation's policy debate and threatened to reconfigure the political landscape."
McCain yesterday sought to blame Washington corruption for the crisis. The Chicago Tribune reports that during a visit to a GM plant in Michigan, McCain "told the workers that the economic crisis is not their fault. 'I'll tell you whose fault it is,' he said. 'Corruption in Washington and corruption on Wall Street and as president I'm going to clean it up and I'm going to fix it and return you back to the strength of our economy that you have earned and deserve.'" However, Obama was having none of that -- NBC Nightly News reported Obama in Nevada yesterday "pressed the attack, making a joke of...McCain's promise to shake up Washington." Obama: "Now he tells us that he's the one who's going to take on the old boy's network. The old boy's network. In the McCain campaign, that's called 'a staff meeting.'" The CBS Evening News showed Obama saying of McCain, "This is somebody who's been in Congress for 26 years, who put seven of the most powerful Washington lobbyists in charge of his campaign."
Five national polls are out in the latest news cycle show, and they paint a picture of an Obama rally he holds leads in four of them. A CBS News Poll of 1004 registered voters, conducted over September 12-16 shows 48% of registered voters would vote for Sen. Barack Obama; 43% would vote for Sen. John McCain. Among likely voters, Obama also had a five point lead, 49%-44%.
A Quinnipiac University poll of 987 likely voters taken September 11-16 shows Obama leading McCain 49%-45%.
A Zogby telephone survey of 1,008 likely voters taken September 11-13 shows Obama leading McCain 47%-45%. A similar poll taken mid-August showed McCain leading Obama 46%-41%.
The Gallup daily presidential tracking poll of 2,787 registered voters taken September 14-16 shows Obama leading McCain 47%-45%. In the previous day's poll, McCain led Obama 47%-46%.
The Rasmussen Reports automated daily presidential tracking poll for September 17 shows McCain leading Obama 48%-47%.
CNN Commentator Declares Racism Only Explanation For Close Polls CNN's Jack Cafferty writes on his blog that race is "arguably the biggest issue in this election, and it's one that nobody's talking about. The differences between Barack Obama and John McCain couldn't be more well-defined. Obama wants to change Washington. McCain is a part of Washington and a part of the Bush legacy. Yet the polls remain close. Doesn't make sense...unless it's race."
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A large number of polls out in the latest media cycle paint a picture of an extraordinarily tight race at the state level.
Polls Split On Ohio A CNN /TIME poll of 913 registered Ohio voters taken September 14-16 shows Obama leading McCain 49%-47%. An American Research Group poll of 600 likely Ohio voters taken September 10-13 shows McCain leading Obama 50%-44%.
Race Tied In Florida A CNN /TIME poll of 907 registered Florida voters taken September 14-16 shows McCain and Obama tied at 48% apiece.
Obama Up 2 In Virginia A Public Policy Polling (D) survey of 1,090 likely Virginia voters taken September 14-16 shows Obama leading McCain 48%-46%.
McCain Up In Pair Of North Carolina Polls A CNN /TIME poll of 910 registered North Carolina voters taken September 14-16 shows McCain leading Obama 48%-47%. An American Research Group poll of 600 likely North Carolina voters taken September 13-16 shows McCain leading Obama 52%-41%.
Polls Paint Competing Picture Of Race In Indiana A CNN /TIME poll of 890 registered Indiana voters taken September 14-16 shows McCain leading Obama 51%-45%. An Indianapolis Star /Selzer & Co poll of 600 likely Indiana voters taken September 14-16 shows Obama leading McCain 47%-44%.
Obama Up Narrowly In Two Wisconsin Polls A Rasmussen Reports automated poll of 700 likely Wisconsin voters taken September 15 shows Obama leading McCain 48%-46%. A CNN /TIME poll of 950 registered Wisconsin voters taken September 14-16 shows Obama leading McCain 50%-47%.
Obama Up In New Mexico Polls A SurveyUSA automated poll of 671 likely New Mexico voters taken September 14-16 shows Obama leading McCain 52%-44%. An American Research Group poll of 600 likely New Mexico voters taken September 14-16 shows Obama leading McCain 51%-44%.
McCain Edges Obama In Colorado An American Research Group poll of 600 likely Colorado voters taken September 10-13 shows McCain leading Obama 46%-44%.
McCain Tops Obama In Nevada An American Research Group poll of 600 likely Nevada voters taken September 12-14 shows McCain leading Nevada 49%-46%.
McCain Holds Narrow Lead In Montana An American Research Group poll of 600 likely Montana voters taken September 7-9 shows McCain leading Obama 49%-47%.
Obama Up 4 In Oregon A Rasmussen Reports automated poll of 700 likely Oregon voters taken September 15 shows Obama leading McCain 51%-47%.
McCain Up In West Virginia An American Research Group poll of 600 likely West Virginia voters taken September 14-16 shows McCain leading Obama 49%-45%.
Obama Up 6 In Illinois An American Research Group poll of 600 likely Illinois voters taken September 13-16 shows Obama leading McCain 51%-45%.
McCain Leads In Missouri An American Research Group poll of 600 likely Missouri voters taken September 11-15 shows McCain leading Obama 50%-45%.
The AP reports that "hackers broke into the Yahoo! e-mail account" that Gov. Sarah Palin "used for official business as Alaska's governor, revealing as evidence a few inconsequential personal messages she has received since John McCain selected her as his running mate." The Washington Times adds the "substance of the e-mails appeared relatively inconsequential, but they add to an existing furor as Mrs. Palin and others in her state administration routinely have used private Yahoo e-mail accounts to conduct official state business." CNN adds that McCain's campaign "said Wednesday it has contacted 'appropriate authorities'" over the intrusion.
In an editorial today, USA Today says that Sen. John McCain has a better record of bipartisanship than Sen. Barack Obama, who "has rarely challenged party dogma on the sort of big, contentious issues he'd face as president." In a USA Today op-ed in response to the editorial, Obama defends his record on bipartisanship citing his work with Sen. Dick Lugar (R) on nuclear weapons and says that he "helped end the abuse of no-bid contracts and made government more open by putting every contract, every grant and every dime of federal spending online" with Sen. Tom Coburn (R).
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Jay Leno: "I swung by my bank today to make a withdrawal. It's now a nail salon," so that is "not a good sign."
Jay Leno: "The Federal Reserve has just loaned the AIG insurance company $85 billion to keep it afloat." That "is almost as much money as Barack Obama raised last night in Beverly Hills."
Jay Leno: "I had a great dinner last night." Put "on a Barbra Streisand CD, ordered Domino's, saved $28,488."
Jay Leno: "Last night, Barack Obama hosted a dinner with Barbra Streisand singing. It was $28,500 a plate. ... But, to be fair, that did include an all-you-can-eat salad buffet."
Jay Leno: "I guess the food was pretty exotic. The main course was roasted pig in a lipstick glaze."
Craig Ferguson: "The big news story today is...Sarah Palin. Every day, Sarah Palin. And it is not exactly hard-hitting stuff. I haven't seen the media fawn over a celebrity this much since -- Barack Obama."
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