http://www.washingtonpost.com/…

Citigroup has agreed to buy Wachovia bank in a deal brokered by the Federal Deposit Insurance Corporation to avoid another major corporate failure in the midst of the ongoing financial crisis.

The FDIC announced the deal on its Web site this morning. No price for the transaction was included in the announcement. But the FDIC said that the deal hinged on a loss sharing arrangement between Citigroup and the FDIC, the agency responsible for insuring bank deposits.

Wachovia has been saddled by mortgage-related losses. Under the terms of the deal, Citigroup will absorb up to $42 billion of losses on a $312 billion pool of loans. The FDIC will be responsible for any losses beyond that, but was given $12 billion in Citigroup preferred stock and warrants in return for that guaranty.

The FDIC statement emphasized that Wachovia “did not fail,” and that its branches and other offices will be open as usual.

http://www.bloomberg.com/…

European governments stepped in to rescue Fortis, Bradford & Bingley Plc, and Hypo Real Estate Holding AG as tremors from the U.S. credit crisis reverberated around the world.

The U.K. Treasury seized Bradford & Bingley, Britain’s biggest lender to landlords, while governments in Belgium, the Netherlands and Luxembourg threw an 11.2 billion-euro ($16.3 billion) lifeline to Fortis. Germany guaranteed a loan to Hypo.

The interventions exposed how fallout from the crisis that drove Lehman Brothers Holdings Inc. into bankruptcy and prompted a $700 billion U.S. bank-rescue package has gone global. It also added urgency to negotiations among European policy makers as to how they deal with banking collapses.

“The precarious global environment means the weakest links in Europe are now falling,” said Mamoun Tazi, an analyst at MF Global Securities Ltd. in London. “If banks continue not to lend to each other we’ll see more failures.”

More insider deals, more centralization, more government interference and control.

This is what happens when you have a system based on debt on a large scale. It’s inherently insolvent.

Update:

This is cute…

Federal Reserve Chairman Ben Bernanke said in a statement the FDIC action “demonstrates our government’s unwavering commitment to financial and economic stability.”

http://www.spiegel.de/...

The US government is buying bad debt for $700 billion. Now Washington is asking other countries to jump in and help, too, but the Germans are bowing out. Believing that the rescue package sends the wrong signal, experts from the country’s leading economics think tanks argue it’s the right call.

It’s not a call for assistance; it’s a scream for help. US Treasury Secretary Henry Paulson is asking other countries to help buy up bad US debt. The US government is putting up $700 billion in taxpayer money in the hopes that the measure might restore stability in the financial system. Some countries are planning to help. But the German government has answered this call quickly and clearly: no.

Economics experts think that’s the right response. As they see it, in the long run, those responsible for the crisis — who have been cashed out with high salaries and bonuses for years — will not be penalized for billions “but will be let off the hook like everyone else,” says Carsten Meier of the Kiel Institute for the World Economy (IfW). According to Meier, by injecting capital into the market, the US government is putting everyone who speculated and lost back on their feet and thereby standing in the way of a market cleanup.

Paulson has stated that the US government will pay a fair price for the bad debt, which Meier sees as sending “precisely the wrong signal,” adding that “people shouldn’t be rewarded for taking such high risks.”

Sad that Europe is calling the US too socialistic.

Not to in anyway justify the proposed bailout… but everyone is up in arms about how the taxpayers are supposed to cover the failures of the wealthy. If you look at the tax stats those who pay the bulk of the income taxes are the upper class. In 2005 the top 1% of income tax payers paid 39.38% of all income tax collected, top 5% paid 59.67%, top 10% paid 70.30%, top 25% paid 85.99%, and the top 50% paid 96.93%. While in a way, due to corporate income taxes and other incomes, this bailout is still socialism for the rich… it’s not entirely accurate.

The following is a statement presented Wednesday, September 10, at the National Press Club in Washington, D.C. It was presented to the media by Rep. Ron Paul, former Republican presidential candidate, joined by Cynthia McKinney, Green Party presidential candidate, Chuck Baldwin, Constitution Party presidential candidate, and Ralph Nader, Independent presidential candidate. At a later press conference, Bob Barr, the Libertarian Party presidential candidate, said he also agreed with the statement (see posting below).

We Agree

Foreign Policy: The Iraq War must end as quickly as possible with removal of all our soldiers from the region. We must initiate the return of our soldiers from around the world, including Korea, Japan, Europe and the entire Middle East. We must cease the war propaganda, threats of a blockade and plans for attacks on Iran, nor should we reignite the cold war with Russia over Georgia. We must be willing to talk to all countries and offer friendship and trade and travel to all who are willing. We must take off the table the threat of a nuclear first strike against all nations.

Privacy: We must protect the privacy and civil liberties of all persons under US jurisdiction. We must repeal or radically change the Patriot Act, the Military Commissions Act, and the FISA legislation. We must reject the notion and practice of torture, eliminations of habeas corpus, secret tribunals, and secret prisons. We must deny immunity for corporations that spy willingly on the people for the benefit of the government. We must reject the unitary presidency, the illegal use of signing statements and excessive use of executive orders.

The National Debt: We believe that there should be no increase in the national debt. The burden of debt placed on the next generation is unjust and already threatening our economy and the value of our dollar. We must pay our bills as we go along and not unfairly place this burden on a future generation.

The Federal Reserve: We seek a thorough investigation, evaluation and audit of the Federal Reserve System and its cozy relationships with the banking, corporate, and other financial institutions. The arbitrary power to create money and credit out of thin air behind closed doors for the benefit of commercial interests must be ended. There should be no taxpayer bailouts of corporations and no corporate subsidies. Corporations should be aggressively prosecuted for their crimes and frauds.

I’ve been wanting 3rd parties to join up on common threads for years. This is a good start. I just hope they continue to work together and keep these issues raised.

http://www.freep.com/…

Drivers age 15 to 20 are the deadliest age group on the roads, and now a safety organization is trying to drum up support for bumping up the driving age in U.S. states to 17 or 18, to reduce the carnage on America’s roadways.

The Insurance Institute for Highway Safety today is releasing a report encouraging higher driving ages at a conference of the Governors Highway Safety Association in Scottsdale, Ariz. The institute notes that most of Europe as well as China, Japan, Russia and Brazil allow people to start driving at age 18. The agency, funded by the insurance industry, says several U.S. states have tried but failed to boost the age to 17 or 18.

More individuals looking to treat young adults as children and further removing their personal responsibility. They raise the smoking age to 19, fight to keep drinking at 21, make SCHIP cover those upto the age 25. The childification of these young adults will only cause greater problems.

I love how frank Rogers is. Amazes me these stations continue to ask him on when they should know exactly what he’s going to say and that they won’t like it.

http://www.realclearpolitics.com/…

Mikheil Saakashvili’s decision to use the opening of the Olympic Games to cover Georgia’s invasion of its breakaway province of South Ossetia must rank in stupidity with Gamal Abdel-Nasser’s decision to close the Straits of Tiran to Israeli ships.

Nasser’s blunder cost him the Sinai in the Six-Day War. Saakashvili’s blunder probably means permanent loss of South Ossetia and Abkhazia.

After shelling and attacking what he claims is his own country, killing scores of his own Ossetian citizens and sending tens of thousands fleeing into Russia, Saakashvili’s army was whipped back into Georgia in 48 hours.

Vladimir Putin took the opportunity to kick the Georgian army out of Abkhazia, as well, to bomb Tbilisi and to seize Gori, birthplace of Stalin.

Reveling in his status as an intimate of George Bush, Dick Cheney and John McCain, and America’s lone democratic ally in the Caucasus, Saakashvili thought he could get away with a lightning coup and present the world with a fait accompli.

Mikheil did not reckon on the rage or resolve of the Bear.

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