Markets held their breath while they watched Bernanke and Paulson testify before Congress today.
The Fed issued new guidelines allowing for minority investors in bank holding companies to take larger equity stakes and receive greater board representation than had previously been allowed, in a bid to make it easier for U.S. banks to receive foreign (and perhaps private equity) capital.
The OTS is reportedly urging WaMu to find a solution, with TD, Citi, JPMorgan, Wells Fargo, and Santander considering buying all or parts of the bank. Moody’s downgraded Washington Mutual to E from D+ -- and says “WaMu’s capital is insufficient to absorb its mortgage losses.” FT Alphaville point out the FDIC’s insurance fund might be insufficient too.
In the first sign of any real upwards pressure on wages, IG Metall’s union is demanding 8% wage increases. And Buiter says now is the time for Britain to join the EMU.
Tariq Ali links the bombing of the Marriott in Islamabad -- the "Pakistani 9/11" -- to the failures of the U.S. war in Afghanistan and the U.S.'s recent violations of Pakistani sovereignty in the Northwest. The Age (Australia) covers much of the backstory of the conflict in northwestern Pakistan. An IHT editorial urges a major strategic shift in U.S. policy in the region.
There is confusion in South Africa after 11 members (around one-third) of the Cabinet resigned today in the wake of former President Mbeki's resignation.
The Senate prepares to renew the ITC, PTC, and other renewables subsidies today and tomorrow. These are being merged into a bipartisan compromise that includes an AMT waiver and other tax measures. The House renewed these subsidies last week, and this Senate version is expected to pass easily. The Washington Post comments.
The New Scientist reports on a recent study describing an atmospheric boundary in the Antarctic ocean that prevents air pollution from crossing into the air over the southernmost continent.
The Western Climate Initiative (WCI), a CO2 cap-and-trade program for 4 Western Canadian provinces and 7 Western States, released its final proposal for cap-and-trade today. Sightline has commentary. Unfortunately, unlike RGGI, the WCI plans to auction only a minimal number of the permits issued, and it plans to allocate the rest by fiat. All other features of the plan are an order of magnitude less important than this choice. Later this month we’ll feature an in-depth analysis of cap-and-trade plans by auction and by allocation, citing examples. At least the WCI is a step in the right direction.