Friday, November 14, 2008

The Nightowl Newswrap

The taxpayers are going to get soaked, no matter what: The government is expected to inject $14 billion into Freddie Mac, the mortgage finance company under federal control, after it reported today that it lost $25 billion from July through September. The losses were due to substantial charges the company took on the falling value of mortgage securities and growing number of people who fell behind or defaulted on their mortgages. The company more than doubled the amount of money it reserves to cover future losses. In addition, it wrote down the value of tax credits it was unlikely to use. The numbers are astounding. The company's losses, when combined with those since the housing downturn started, eviscerate nearly all the company's earnings over the past decade.

The fix is in: Nations are close to adopting a series of measures aimed at combating a global recession and laying the groundwork for a broad reconstruction of the international financial system, as world leaders arrive in Washington for a major economic summit this weekend. Among the most notable measures would be a new body to supervise the regulation of global financial institutions. The "college of supervisors" would bring together international regulators to coordinate oversight of the world's 30 largest financial institutions, according to officials familiar with the plans. The new body would be designed to add an extra level of scrutiny to the way banks are monitored and to catch excessive risk-taking of the sort that contributed to the current economic crisis.

Sarkozy must know something: French President Nicolas Sarkozy undercut the American rationale for a U.S. missile shield in Eastern Europe on Friday by saying that the system would do nothing to improve European security. Sarkozy's comments were the strongest to date by an American ally against the missile-defense plans, which have infuriated Russia despite the Bush administration's insistence that they are aimed at protecting Europe from Iran. "Deployment of a missile defense system would bring nothing to security in Europe ... it would complicate things, and would make them move backward," Sarkozy said after a summit with Russian President Dmitry Medvedev.

Disaster in Gaza: The UK-based aid agency Oxfam has warned of catastrophe for Gaza and nearby areas of Israel if a truce agreed last June is not maintained. Oxfam called on world leaders to do everything they could to break Israel's blockade of Gaza and urged Israel to resume supplies without delay.

Indian probe lands on the moon: India's first unmanned lunar spacecraft, Chandrayaan 1, has placed a probe on the surface of the Moon. The probe, painted with the Indian flag, touched down at 2034 (1504 GMT), the Indian Space Research Organisation (ISRO) said. It will perform various experiments, including measuring the composition of the Moon's atmosphere. The mission is regarded as a major step for India as it seeks to keep pace with other space-faring nations in Asia. The BBC's Sanjoy Majumder in Delhi says the success of the mission has been hailed in India where many see it as another sign of the country's emergence as a global power.

Interesting... Three months before announcing his improbable candidacy for the Democratic nomination for president in May 2007, Obama and [Arizona Governor Janet] Napolitano held a long discussion on a wide range of policy issues during a break at the governors’ winter meeting in Washington. “From that point forward,” Napolitano spokeswoman Jeanine L’Ecuyer said, “she began thinking about him as a viable presidential candidate.” Over the next 21 months, the two developed a close relationship. Napolitano, 50, became an early supporter of Obama, endorsing him some weeks before Arizona’s Feb. 5 primary, one of those held on Super Tuesday. The endorsement reportedly upset Sen. Hillary Rodham Clinton (D-N.Y.), then the party front-runner. She went on to win the state’s primary, 50 percent to 42 percent. Napolitano continued to support and campaign for Obama and is said to have acquitted herself well on the hustings. Now, she has been named to the 11-member transition advisory committee assisting the president-elect in the selection of hundreds of high-level officials — the only elected official on the panel.

Wildfire devastates Montecito, California: Firefighters and a squadron of aircraft launched a desperate daylight attack Friday to push back a wind-whipped wildfire that destroyed at least 100 homes and a college dormitory, and forced thousands to flee the longtime celebrity hideaway of Montecito. At least 13 people were injured. The cause of the fire was not immediately known.

The economic slowdown hits Dubai: The world financial crisis has hit Dubai's economy, slamming the brakes on its surging development and dimming its gold rush status. Development projects are being delayed, tourism is expected to decline and the government is even exploring how to begin collecting taxes, once almost unthinkable in this freest of free market enclaves. All this is troubling news for the fortune seekers who flocked here in recent years but a surprisingly welcome development in some respects for one group: Emirati natives, the 10 percent or so who trace their lineage to the Bedouins and traders who once had this baking sliver of sand to themselves.

The slowdown slows down NASCAR:NASCAR has suspended all testing at its sanctioned tracks next season in a cost-cutting measure that should help teams save several million dollars in their 2009 budgets. The moratorium, which includes the traditional "preseason'' Daytona 500 testing, is for NASCAR's top three divisions. Teams cannot test at any track where a Sprint Cup, Nationwide Series or Truck Series event is held. NASCAR told teams its decision Friday morning at Homestead-Miami Speedway. The decision is an about-face from just a few months ago, when NASCAR considered expanding the testing schedule to as many as 24 days at any track.