News from this weekend

Our gaze might be on the markets melting down, but the upheaval we are experiencing is more than a financial crisis, however large. Here is a historic geopolitical shift, in which the balance of power in the world is being altered irrevocably. The era of American global leadership, reaching back to the Second World War, is over.

You can see it in the way America's dominion has slipped away in its own backyard, with Venezuelan President Hugo Chávez taunting and ridiculing the superpower with impunity. Yet the setback of America's standing at the global level is even more striking. With the nationalisation of crucial parts of the financial system, the American free-market creed has self-destructed while countries that retained overall control of markets have been vindicated. In a change as far-reaching in its implications as the fall of the Soviet Union, an entire model of government and the economy has collapsed.

http://www.guardian.co.uk/commentisfree/2008/sep/28/usforeignpolicy.useconomicgrowth





Another day, another bail-out
• UK government poised to nationalise Bradford & Bingley
• US Congress agrees $700bn deal to take over 'toxic debt'
• Tories promise City reforms and curb on public borrowing

http://www.guardian.co.uk/business/2008/sep/28/bradfordbingley.banking2




Average Americans may be forgiven for not understanding why Congress is moving so quickly to pass this massive bailout package. Sure the economy isn’t great—gas prices are still high, it’s harder to get a home loan, some folks have lost jobs—but why are guys close to Paulson saying things like this (from the Times of London):

We are also hearing this crisis is also going global:

http://www.bloomberg.com/apps/news?pid=20601087&sid=asUIj7J1dxCM&refer=home

Bloomberg.com

European Lenders Get Bailouts as U.S. Crisis Spreads (Update1)

By Simon Kennedy

Sept. 29 (Bloomberg) -- European governments stepped in to rescue Bradford & Bingley Plc, Fortis, 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.