The U.S. government will buy close to $250 billion in bank shares, officials announced on Tuesday. "This is an essential short-term measure to ensure the viability of America's banking system," President George W. Bush said.
The Icelandic stock exchange fell immediately after reopening for the first time since being suspended last Thursday. Its main share index fell 76 percent, but officials called it "a statistical anomaly," reports The BBC.
Premarket trading hinted at a continuation of yesterday's Wall Street rebound. "Futures for the S&P 500 were up 13 points to 1030 and were 23 ahead of fair value. Nasdaq futures were better by 15 points at 1473 and were 34 above fair value," reports The Street. The Dow was up 936 points yesterday—its largest ever one-day surge—after last week's bearish trading streak.
Asian and European markets are on a steep rebound on the back of speculation that U.S. President George W. Bush is to announce a plan involving as much as $250 billion into banks in return for shares. The government may also temporarily guarantee interbank lending to free up credit markets. "Japan's Nikkei 225 posted a record 14.15 percent gain on Tuesday," reported CNN.
Oil prices may drop as low as $50 per barrel on the back of credit crunch concerns, say energy industry analysts. "A combination of fear, de-stocking and disruptions across the supply chain owing to frozen credit markets is currently depressing oil demand far below where underlying economic fundamentals would suggest," wrote Goldman Sachs on Monday in a note to clients. The $50 threshold is considered by many to be the minimum price, or "cash cost," needed to recoup oil company operating costs.
The LIBOR index, which measures the cost of lending between banks, dropped the lowest it has in a month for one-week borrowing in dollars, dropping 50 basis points to 4.08 percent, according to a British Bankers Association report cited by Bloomberg. On Thursday the rate hit a record-high 4.76 percent, signalling credit concerns.
Former Federal Reserve Chief Paul Volcker, largely credited with helping to beat off stagflation during the 1970s, said at a seminar in Singapore today that the economy is in a recession. "House prices in the U.S. are still declining. There are still more losses to come there. The economy, I believe, is in recession," said the former Fed chief.
The originator of the rumor that "Obama is a Muslim" is Andy White, an Internet personality with more than 30 years of alleged false comments about politicians, leaders and judges, much of it anti-Semitic in tone. White was denied admission to the Illinois state bar after a psychiatric examination found him "moderately severe character defect manifested by well-documented ideation with a paranoid flavor and a grandiose character," the Tribune reported.
The results from the latest survey from Politico/Insider Advantage show Obama leading in three out of four "bellwether" counties that went Republican during the 2000 and 2004 political elections. Politico writes, "In Reno, Nevada's Washoe County, Obama leads McCain by a 46-45 percent margin, with six percent undecided. Obama posts a wider 50-44 percent lead with five percent undecided in Raleigh, North Carolina's Wake County, and another 6-point lead in Hillsborough County, Fla., where Tampa is located. There, he edges McCain 47-41 percent, with 11 percent undecided."
Fires in California's San Fernando Valley have led to at least one death, 19 homes getting burned and thousands evacuated. Calif. Gov. Arnold Schwarzenegger has declared a state of emergency as firefighters work to contain a blaze that has scorched over 10,000 acres.
A mother drove 700 miles from Michigan to abandon her 13-year-old son at a hospital in Omaha, Neb. to take advantage of the state's "safe haven" law. This is the second time since the law became effective July 18 that a child from out of state has been left at a Nebraska hospital.
Syria is to open an embassy in Lebanon, indicating the opening of diplomatic relations between the two countries for the first time since the 1940s, when both nations gained their independence from France.
Thai soldiers have retreated from the area near the country's border with Cambodia after entering a "no-man's land" to allegedly inspect landmines. The two countries have had tense relations since 1962, when the International Court of Justice awarded to Cambodia a 1.8-square-mile tract of land near the 900-year-old Preah Vihear temple.
Space tourist Richard Garriott is to embark on a 10-day on the International Space Station after docking with the Soyuz TMA-13 spacecraft. The 47-year-old computer games designer paid some $17 million for the trip.
Beatles drummer Ringo Starr made a statement via a video on his Web site pleading with admirers to stop sending him fan mail. “I want to tell you, please, after the 20th of October, do not send fan mail to any address that you have. Nothing will be signed after the 20th of October. If that has the date on the envelope it’s going to be tossed. ...Peace and love, peace and love," said Starr.