Continued coverage of the financial crisis touches on many subjects, from the nervous feelings among Americans consumers to Treasury Secretary Henry Paulson's preparations to enact the bailout approved last week. Key stock markets in Europe and Asia are down between three and six percent in trading conducted while Americans were still asleep.
The AP says that "relief on Wall Street over the hard-won passage of a $700 billion bailout package for the financial system apparently hasn't yet trickled down to the pubs, storefronts, car lots and malls of Main Street. Many Americans spent an uneasy weekend wondering whether the rescue would help in time -- or at all -- and trying to figure out where next to cut back as the economic screws tighten." The New York Times says consumers "are pulling back on their spending, all but guaranteeing that the economic situation will get worse before it gets better," while the Wall Street Journal notes that even retailers' offering of "generous discounts" to try to bring in shoppers failed to "convince cautious shoppers to open their wallets."
The Christian Science Monitor says the downturn in hiring "most likely means the credit crunch on Wall Street has now moved to the general economy, as business and consumers hunker down." The Financial Times says JPMorgan economists have compared the labor market "with a boat sailing through rough seas over the past few months." By August, "the boat had indeed capsized, and in September, according to figures released at the end of last week, there were '159,000 men and women overboard.'"
Paulson Takes The Reins The Christian Science Monitor reports, "Wall Street now runs through Washington." Treasury Secretary Paulson "will be the cartographer of a coming age of constraint, with vast powers to buy and sell bad assets, and hundreds of billions of taxpayer dollars at his disposal. Decades of deregulation appear to be at an end, with US agencies eager to impose new constraints on Wall Street's remaining firms."
The Wall Street Journal reports Paulson is expected to tap Assistant Secretary of Treasury for International Affairs Neel Kashkari to serve as interim head of Treasury's new Office of Financial Stability as early as today. The 35-year-old Kashkari is a "key adviser on whom he has come to rely heavily during the financial crisis." The Washington Post says Treasury will also today "begin the hiring process for five to 10 asset managers and release guidelines for how it will manage conflicts of interests for contractors who work for the program."
Paulson made the rounds of the Sunday political talk shows yesterday. On ABC's This Week, he said, "What I said to the President is what I'm going to say to the American people, is that last week as the credit markets were frozen, the capital markets were frozen, we had a situation where American companies weren't able to borrow money. This could ultimately affect small banks, loans to businesses, loans to farmers, jobs, people's retirement."
On Fox News Sunday, Paulson maintained, "We're not doing this to protect our financial institutions in and of themselves. We're doing it to protect the financial institutions because that's what is needed to protect the American taxpayer." On NBC's Meet The Press, Paulson reiterated that "I don't like the fact the taxpayer's being put in this position, but the numbers that are being used, which are -- you know, we're talking about hundreds of billions of dollars -- remember, this is not an expenditure, this is money that is being used to purchase these assets, as you said, these illiquid mortgage assets, which are very difficult to value. They will be held, and then they will be resold at some time. And so we can't determine what the cost is today."
In an editorial, USA Today urges Sens. John McCain and Barack Obama to announce their choices for Paulson's successor before the election, since "whoever takes over from Paulson will have unprecedented powers to spend what remains come January of $700 billion in rescue funds."
Room Seen For Plenty Of Blame To Go Around The Los Angeles Times reports, "When Congress voted last week to bail out Wall Street banks and investment houses, members were also indirectly voting to repair damage lawmakers themselves had caused during a decades-long era of deregulation." Still, The Hill says House Republicans "defended 'deregulation' in advance of House Oversight and Government Reform hearings designed to assign blame for the financial market crisis." A report written by the committee's Republican staff "instead points a finger at a few large institutions, in particular Fannie Mae and Freddie Mac."
Financial Industry Facing New Scrutiny The AP reports, "With the passage of the $700 billion rescue package, the financial industry will face greater congressional scrutiny in coming weeks and months. Further-reaching regulation is almost certain." The Financial Times says the government intends to use new powers contained in the legislation "to prevent the disorderly failure of any more systemically important financial institutions."
Fight Over Wachovia Continues The AP reports Wachovia "is moving ahead with its deal to sell itself to Wells Fargo -- while questions arise about the damaging effects that prolonged litigation might have on Wachovia." Wachovia "responded Sunday to a New York judge's order temporarily blocking the sale of the bank to Wells Fargo with a lawsuit of its own, asking a federal judge in Manhattan to allow the deal to go through." AFP says Wachovia said "it 'continues to believe its agreement with Wells Fargo, which involves no government assistance, is proper and valid.'"
The Wall Street Journal says Federal Reserve officials were pushing Sunday for Wells Fargo and Citigroup to reach a compromise in a "sign that the federal government is worried about the volatile battle for Wachovia." Under a plan "being discussed Sunday night, Citigroup and Wells Fargo would divvy up Wachovia's network of 3,346 branches along geographic lines." The Financial Times says "people close to the situation said the New York Federal Reserve was actively involved in the discussions." The Washington Post also says, "Leaders of the central bank fear that a lengthy legal battle over Wachovia could pose broad risks to the financial system." The Los Angeles Times and New York Times also report on the battle.
Countrywide Agrees To Modify Mortgages The New York Times reports Countrywide Financial "has agreed to the largest program ever to modify home loans, as part of a settlement with officials in 11 states, just days after the federal government adopted a giant financial rescue package without any relief for distressed homeowners." The Chicago Tribune reports the states "have reached an $8.8 billion settlement of their lawsuits" against Countrywide, the "biggest subprime mortgage lender."
The Washington Post reports President Bush "flew to the family ranch over the weekend after weeks of bad news back in Washington, from the nation's ongoing financial crisis to polls showing his popularity hitting new lows." But the "tide of negative headlines has obscured a series of significant legislative victories for a president wrongly written off as a lame duck," including the bailout package, Congress' lifting the offshore oil drilling moratorium, and the India nuclear deal.
Sign up here to get the US News Political Bulletin emailed to you each morning at 8 a.m.
The AP reports the Supreme Court "is doing its best to stay out of the spotlight in the final days of the presidential campaign and while the other two branches of government struggle to deal with turmoil in the financial markets." The justices "open their new term Monday with no cases on abortion, race or other social issues that might split the court and the nation. The most entertaining case of the term -- involving celebrities' use of profanity on live television -- will be argued on Election Day, Nov. 4., when attention arguably will be focused elsewhere."
Among the cases on the docket are drug and tobacco labeling. NBC Nightly News reported, "When Diana Levine, a popular Vermont guitar player, sought treatment for a migraine headache, she was given a drug called Fenergan injected into an IV tube, but it somehow came in contact with an artery, severely damaging her hand and forearm, which had to be amputated." A Vermont jury "decided the drug's label should have said 'never give by IV push,' but the drug's maker, Wyeth Labs, is asking the Supreme Court to rule that only the Food and Drug Administration can decide what's on drug labels because juries cannot weigh all a drug's risks and benefits."
The Christian Science Monitor reports, "The tobacco company Altria Group is asking the US Supreme Court to short-circuit a class action lawsuit by angry smokers who say they were misled into believing that 'low tar' and 'light' cigarettes are a healthier alternative to regular cigarettes."
The AP reports, "The Taliban are furious about the latest apparent US missile strike in Pakistan, indicating a senior militant may be among two dozen people killed," officials and residents said Sunday. The attack Friday in North Waziristan "was believed to have killed several Arab fighters but government officials have been notably quiet," notes the AP. Two Pakistani intelligence officials "interpreted the Taliban's anger as a sign that a senior militant may have been among at least 24 people killed."
Meanwhile, AFP reports Pakistan President Asif Ali Zardari "has called a joint session of parliament on Wednesday for a rare briefing from army and intelligence chiefs on the battle with Islamist extremists," officials said. The "closed-door briefing comes in the wake of a string of attacks across the country" and "amid a spate of strikes by suspected US drones on alleged Al-Qaeda and Taliban hideouts."
Sign up here to get the US News Political Bulletin emailed to you each morning at 8 a.m.
Top
The AP reports that during a stop in Omaha, Gov. Sarah Palin "defended her claim that Barack Obama 'pals around with terrorists,' saying the Democratic presidential nominee's association with a 1960s radical is an issue that is 'fair to talk about.'" Palin "launched the attack Saturday and repeated it twice Sunday, signaling a new strategy by John McCain's presidential campaign to go after Obama's character." NBC Nightly News said this may be "the Sarah Palin we're going to see out on the campaign trail for this next month. Aides say this is a role she is comfortable with. One told me 'she's a competitor.' They also think she is particularly effective here." The San Francisco Chronicle calls the attacks a "sign that the 2008 presidential race has entered its ugliest and most rancorous phase," and says Palin "promised today that John McCain is ready to get tough and 'lay out the truth' about the 'real'" Obama.
Palin's attack was the subject of much commentary on the Sunday news shows. Ohio Sen. Sherrod Brown (D), speaking on ABC's "This Week", suggested that voters in his state are more concerned about the economy, Social Security, and trade than with Obama's link to Ayers, criticizing McCain and Palin for "resorting to these tactics." Speaking on CBS's "Face the Nation", California Sen. Diane Feinstein (D) called Palin's association of Obama with Ayers "a stretch" and "very shocking."
Obama Says GOP Distracting Voters With "Smears" The Los Angeles Times reports Obama yesterday "accused Republicans of trying to distract voters from the sagging economy with 'smears.'" Speaking to "thousands of voters this afternoon at Asheville High School," Obama "argued that McCain's record showed he shares President Bush's economic philosophy." Obama said, "Sen. McCain and his operatives are gambling that they can distract you with smears rather than talk to you about substance." NBC Nightly News reported that Obama also seeks to reinforce questions about McCain on the economy in a new ad, which says, "Erratic in crisis, out of touch on the economy. No wonder his campaign wants to change the subject."
The Politico reports in an exclusive story that Sen. Barack Obama "on Monday will launch a multimedia campaign to draw attention to the involvement" of Sen. John McCain "in the 'Keating Five' savings-and-loan scandal of 1989-91, which blemished McCain's public image and set him on his course as a self-styled reformer." Retaliating for "what it calls McCain's 'guilt-by-association' tactics, the Obama campaign is e-mailing millions of supporters a link to a website, KeatingEconomics.com, which will have a 13-minute documentary on the scandal beginning at noon Eastern time on Monday." The AP reports Obama spokesman Tommy Vietor said McCain's "involvement with convicted thrift owner Charles Keating 'is a window into McCain's economic past, present and future.'" Bloomberg News says "invoking the Keating Five scandal may prove risky, as Obama's candidacy has been built around a message of hope with the promise of a different kind of politics."
Sign up here to get the US News Political Bulletin emailed to you each morning at 8 a.m.
NBC Nightly News updated its electoral map. Political director Chuck Todd said, "If the election were held today, we would say that Obama is up five or more points right now in enough states, 264 electoral votes, John McCain under 200, under 175." The Hill reports Republican strategist Karl Rove said Sunday that the race "is currently played on the GOP side of the map but noted that 'rapid changes' could again alter the picture." Rove has Obama at 273 electoral votes to 163 for McCain, with the rest too close to call. Electoral-Vote.com gives Obama a 329-194 advantage, with North Carolina's 15 a tossup. RealClearPolitics' no-tossups map has Obama leading 353-185. With tossups removed, Obama leads 264-163. The Washington Post, meanwhile, reports on its front page that Obama "is poised to benefit from a wave of newcomers to the rolls in key states in numbers that far outweigh any gains made by Republicans."
Before, After Debate, Obama Focusing On Red States The Chicago Tribune reports in the "days before and after Tuesday's presidential debate," Obama "will spend all of his time in states where Democratic presidential candidates rarely go, especially this close to an election." This weekend "and through the middle of this week, Obama is focusing on Virginia, North Carolina and Indiana. It has been nearly a month, for example, since he even visited the battleground of battlegrounds, Ohio." The "red state itinerary is the latest example of just how aggressively the Illinois senator has worked to widen the playing field, boosted by an economic crisis that he is now charging his opponent has handled in an 'erratic' fashion."
Race Tied In Colorado A Denver Post /Mason-Dixon poll of 625 registered Colorado voters taken September 29-October 1 shows McCain and Obama tied at 44%.
Obama Up Big In Minnesota A Minneapolis Star Tribune poll of 1,085 likely Minnesota voters taken September 30-October 2 shows Obama leading McCain 55%-37%.
Obama Up 5 In Maine A Rasmussen Reports automated poll of 500 likely Maine voters taken October 2 shows Obama leading McCain 51%-46%.
Obama Up 10 In Washington A Rasmussen Reports automated poll of 700 likely Washington State voters taken October 2 shows Obama leading McCain 53%-43%.
Obama Edges McCain In Nevada A Rasmussen Reports automated poll of 700 likely Nevada voters taken October 2 shows Obama leading McCain 51%-47%.
Obama Up 10 In New Hampshire A Rasmussen Reports automated poll of 700 likely New Hampshire voters taken October 1 shows Obama leading McCain 53%-43%.
The Gallup daily presidential poll of 2,728 registered voters taken October 2-4 shows Obama leading McCain 50%-43%. The Rasmussen Reports automated daily presidential tracking poll for October 5 shows Obama leading McCain 51%-44%. The Diageo/Hotline tracking poll of 915 likely voters taken October 2-4 shows Obama leading McCain 48%-41%.
In addition, a Zogby Interactive online poll of 2,873 likely voters taken October 2-3 shows Obama leading McCain 48%-44%.
The AP reports the Republican National Committee "plans to file a fundraising complaint" against Sen. Barack Obama's campaign Monday, "alleging it has accepted donations that exceed federal limits as well as illegal contributions from foreigners." The Washington Post adds the RNC "wants the Federal Election Commission to investigate the source of thousands of small contributions" to Obama. RNC chief counsel Sean Cairncross "said that there is mounting evidence that the Obama campaign was so hungry for donations it 'looked the other way' as contributions piled up from suspicious donors, and possibly even from overseas, which would be illegal." The New York Times says that "it appears that no action would be taken, even if the commission found merit in the complaint, until after the November election." The Hill reports that in "response to the complaint, the Obama campaign said that McCain has had to return more than $1.2 million in questionable donations, including $50,000 in contributions raised by a Jordanian."
Jon Meacham, in a Newsweek cover story titled "The Palin Problem," writes, "Yes, she won the debate by not imploding. But governing requires knowledge, and mindless populism is just that -- mindless." Meacham says Gov. Sarah Palin "is on the ticket because she connects with everyday Americans. ... But that honest explanation of the rationale for her candidacy -- not her preparedness for office, but her personality and nascent maverickism in Alaska -- raises an important question, not only about this election but about democratic leadership." Karl Rove provides a rebuttal in his Newsweek column.
Sign up here to get the US News Political Bulletin emailed to you each morning at 8 a.m.
Top
Jay Leno: "Congress keeps saying that not only are taxpayers going to get back the $800 billion, they're going to make money on the deal too. See, now you know where the 'con' in congressman comes from."
David Letterman: "The bailout plan has been passed" after "it went from $700 billion to $800 billion," because if the plan cost "the taxpayers more," there was a "better chance that Congress" would "vote for it. So that's...what happened there."
Craig Ferguson: "During an interview, John McCain said he's not a rich man. It's true. At least two of his seven houses are in so-so neighborhoods."
Conan O'Brien: "President Bush signed the Wall Street bailout bill, but he said our economy continues to face serious challenges. Bush said he thought those challenges could be overcome as soon as he leaves office in two months."
Sign up here to get the US News Political Bulletin emailed to you each morning at 8 a.m.
Top
Click image for larger view.
Smart analysis, insightful reporting, in-depth perspective—in a new, digital format.
Log in | Buy Now | See sample
View sample page 2View sample page 3View sample page 4View sample page 5advertisement
Get your POLITICALBULLETIN
Click image for larger view.
Smart analysis, insightful reporting, in-depth perspective—in a new, digital format.
Log in | Buy Now | See sample
View sample page 2View sample page 3View sample page 4View sample page 5Embed exclusive U.S. News headlines, rankings, columns, and blog postings to your Web site, blog, or social network.
advertisement
Use of this Web site constitutes acceptance of our Terms and Conditions of Use and Privacy Policy.
