With the total value of the federal government's bailout commitments now well over 50% of GDP, this morning the Federal Reserve and Treasury announced the Term Asset-Backed Securities Loan Facility (TALF), which will lend up to $200bn against asset-backed securities backed by recently originated student, auto, and credit card loans, and loans guaranteed by the SBA. The Treasury will backstop the Fed's lending under the program up to $20bn -- as financial institutions delever, the government levers up (though only 10x) to maintain the flow of cheap credit. The Fed will also directly purchase GSE debt (up to $100bn) and will buy up to $500bn of GSE-backed MBS... through "a series of competitive auctions... by asset managers selected via a competitive process." (Isn't this exactly what Paulson told us last week was too impracticable to be a good use of TARP funds?) At this point, moral outrage is utterly exhausted: it's time to pause in sheer awe at the immense, irreversible, jury-rigged apparatus that our unelected guardians have constructed to keep a "finger in the dike." If this is the finger, what does the flood look like? Markets were initially euphoric on the announcement, but this $800bn injection didn't even last us the day. Obama's press conference didn't provide much reassurance -- although we did get to see the incredible spectacle of an American president badmouthing subsidies for millionaire farmers.
The largest pending buyout deal in the world, the merger of BHP Billiton and Rio Tinto, has been scuttled. Cisco is cutting capacity by shutting operations down in North America for four days.
Moscow widened the trading band on the ruble by 30 kopeks on each end, allowing the ruble to depreciate further and reducing stress on her foreign reserves. Russia's deposit insurance agency has been given $7.2bn by the state to help rescue banks.
American equity investors believe they have it bad, but the liquidity crunch is much worse in emerging stock markets.
US Q3 GDP fell 0.5% (revised), below expectations, with consumption down 3.7% and inventories rising (0.9%). The Federal Reserve has released maps of credit card and mortgage delinquencies for Q2 -- mortgage delinquency rates increased in 74% of US counties in Q2, as delinquencies appear no longer to be heavily localized in a few hard-hit regions. The Case-Shiller home price indices were off sharply in September. Price-to-income and price-to-rent are declining but not yet in line with historical trends.
The FDIC's "troubled banks" list expanded by 46% in Q3.
Salim Hamdan will be released from the prison at Guantanamo Bay and returned to his home country of Yemen seven years after he was captured. His capture brought about the landmark supreme court case carrying his name; though initially accused of having helped to plan operations with Osama Bin Laden, everyone seems now to agree that he was, in fact, just Bin Laden's driver.
Clear pictures of the "mass incident" in Longnan, Gansu, show police beating rioters. Shanghai Scrap says that the limited armament used by the police reveals a policy of restraint -- and the primitive equipment available to the Chinese security forces.
Amnesty International has an excellent briefing on the situation in North Kivu in the DRC, well worth reading for anyone looking for a primer on the major players and recent history of the situation there.
Some prisons in Zimbabwe have begun releasing inmates rather than forcing them to starve. With dealing in foreign exchange illegal -- and even minimum wage earners demanding they be paid in forex, as the economy completely switches to rand and USD -- prices are now being quoted in "fuel coupons," with 1L of fuel standing in for 1 USD.
The defense in the Anna Politkovskaya murder trial is claiming that the murder was ordered by a Russian politician.
Time's China Blog rounds up last week's meetings of Tibetan exiles in Dharamsala.
North Korea is cutting its remaining commercial ties with South Korea ahead of six-party talks on its nuclear weapons programme in China on December 8.
The World Meteorological Organization has announced that concentrations of carbon dioxide, nitrous oxide, and methane reached all-time highs in 2007 in its Greenhouse Gas Bulletin.
The Oil Drum continues its analysis of the 2008 IEA WEO -- it takes a brief look at the picture of coal supply and demand for the next thirty years.
The NYT has a superb interactive graphic comparing the fare price for NYC transit to historical norms and other transit systems across the country.
The corrupt process for determining the annual bluefin tuna catch quota has resulted in a quota vastly higher than scientists recommend, heightening risk that the species will become endangered and leading to calls for a boycott.
London Mayor Boris Johnson wants to implement a municipal bike-share scheme like Paris's Velib.