The New York Times leads with a $3.2 billion hedge fund bailout by Bear Stearns investment bank, aimed at preventing a market meltdown. The Washington Post and Wall Street Journal lead with, and the NYT off-leads, news that senior al-Qaida leaders escaped before a U.S. assault meant to trap and keep them in Baquba. The Los Angeles Times' top nonlocal story says President Bush has declared his office exempt from oversight into the handling of classified documents.
Bear Stearns ponied up $3.2 billion in loans to bail out one of its hedge funds that was hit hard by the housing slowdown. The bank is still negotiating to save another larger, even riskier hedge fund from collapse. The bailouts are meant to prevent a catastrophic sell-off throughout the housing loan securities market.
The NYT and WSJ say most of the senior al-Qaida members in Baquba left the city before U.S. troops could seal off the perimeter and kill them, as they hoped to do. The al-Qaida leaders were probably tipped off when U.S. commanders gave press conferences explaining their strategy ahead of time.
The WP says Baquba only highlights the risks inherent in the current strategy, which relies on a "surge of operations" against insurgent-filled neighborhoods ringing Baghdad. The United States can clean these neighborhoods out but can't spare enough troops to prevent insurgents moving elsewhere and returning again later.
The LAT is still worried about America's new plans to ally with Iraqi tribal leaders. It fronts a story portraying the tribes as less sectarian but more likely to render Iraq ungovernable, and—it says—insurgents are already trying to take advantage of U.S. tribal outreach.
President Bush says his office is not bound by oversight mandated in his own 2003 executive order. Dick Cheney's office recently declared a similar exemption, and rumor is Cheney tried to abolish the oversight agency altogether. Both offices have thrown out a number of shaky legal arguments (see for yourself), but the White House's final contention is that both are exempt because Bush intends them to be.
The NYT also fronts a White House debate (this time Cheney-Gonzales vs. Rice-Gates) over when and how to close Guantanamo. President Bush says he wants the prison closed, but hasn't said—for example—that it should be closed on his watch. According to the NYT, the administration's detention strategy would collapse the minute detainees are transferred to U.S. soil because they would instantly acquire more rights. The WSJ says the administration is expanding a prison in Afghanistan, but denies that it's an alternative location for Gitmo prisoners.
The WP also fronts worries about Rupert Murdoch's respect for the editorial independence of the Wall Street Journal. The WP cites Murdoch's roots in the Anglo-Australian tabloid journalism culture, and history shows he isn't above intervening to promote his own views (and business interests). The WSJ's current owners are negotiating to create an editorial buffer between Murdoch and the newspaper.