The New York Timesleads with a look at how the tightening of the credit market is threatening business growth and causing increasing fears of a recession. Meanwhile, housing prices continue to fall at a record pace, reports USA Todayin its lead story. In October, the decline was of 5.1 percent as home values fell to "March 2005 levels" and, just like businesses, buyers are finding it more difficult to get credit to finance purchases. "That light at the end of the housing-meltdown tunnel appears to be an oncoming train," an economic analyst said.
The Los Angeles Timesleads with the Republican presidential debate, where the contenders weren't shy about attacking one another as they answered video questions submitted through YouTube. The Wall Street Journal leads its world-wide newsbox with word that Pervez Musharraf, who was sworn in as Pakistan's civilian president today, is likely to lift emergency rule soon. The Washington Postleads with word that plans are in the works to hold the next Middle East conference in Moscow during the first few months of 2008. There are hopes that the new peace initiative can include talks between Israel and Syria on the future of the Golan Heights. Some think the Israel-Syria talks have a better chance of success than the Israel-Palestinian peace process since it essentially involves one major issue.
The total value of two top sources of credit fell nearly 9 percent from August to mid-November, which is the fastest drop since the Fed began keeping track in 1973, says the NYT. Historically, these types of drops usually come at the same time as slowdowns in the economy, and "smaller declines preceded three recessions going back to 1975." Of course, as the paper notes near the end of its story, some companies can still borrow money as easily as ever, but it's clear that lenders are more careful these days, which could make it difficult for some businesses, particularly small ones, to expand. The stock market soared yesterday after the Fed's vice chairman hinted that there could be more cuts in interest rates to make sure that credit continues flowing, which is seen as a sign that officials are growing increasingly worried.
And it's not just businesses that have to worry about a lack of available credit. The WP fronts a look at how it's also affecting some states and cities with nonstellar credit ratings that might be forced to put projects on hold because they are finding it more difficult to issue municipal bonds. The lack of cheap credit is "a double whammy" because municipalities are already seeing a decline in tax revenue because of decreasing real estate values.
The WP calls last night's face-off "the most spirited debate of the 2008 presidential campaign" and several papers note the confrontational nature of the debate illustrates how the Republican nomination is still very much up for grabs. The attacks began from the very first question as Rudy Giuliani and Mitt Romney took jabs at each other on illegal immigration. Romney accused Giuliani of making New York a "sanctuary city," while Giuliani criticized Romney for once hiring illegal immigrants. The LAT points out that Romney replaced Sen. Hillary Clinton as the most frequent target. The Post says Romney "appeared cautious and unsure" during several moments of the debate, particularly during a question about gays in the military (the LAT reveals that the retired general who brought up the topic is part of a group that supports Clinton). Meanwhile, Mike Huckabee managed to nicely deflect a question about whether Jesus would support the death penalty by responding that "Jesus was too smart to ever run for president."
The LAT says Pakistan's emergency rule could be lifted later today, and most of the other papers say it's likely to come before the end of the week. The NYT notes on Page One that although Musharraf will "retain much of his old power" he will still "become a diminished figure" since the prime minister and head of the army usually hold more power than the president. By all accounts the new army chief, Ashfaq Kayani, is a Musharraf loyalist but that doesn't guarantee he will continue to stand by him in the future. USAT says Musharraf is taking a big risk by getting rid of his uniform "in a country where the armed forces are the most powerful institution and have a history of shoving civilians aside."
The WSJ notes inside that the Bush administration was "surprised" by Saudi Arabia's decision to send former Prime Minister Nawaz Sharif back to Pakistan because they weren't expecting he would return until after the January elections. Officials said they see it as a sign that Saudi Arabia is attempting to become an influential force in Pakistan.
The WSJ reports that in order to meet recruiting goals, the Army will try a different incentive besides the usual money-for-college route by offering recruits up to $40,000 to buy a home or start a business. The Army will market this new program to parents and other "influencers" because, as one Army official said, "we know most 18-year-old kids don't think about mortgages yet."
The WP reports the former White House director of Persian Gulf affairs said Bill Clinton wasn't telling the truth when he said on Tuesday that he "opposed Iraq from the beginning." Hillary Leverett said senior officials briefed Clinton at least twice before the invasion and were happy to have his support. Clinton's camp obviously denies the claims, but Tuesday's statement is seen as the latest instance where the former president has complicated matters for his wife.
The NYT fronts news that the Broadway strike is over as the theater owners and producers reached an agreement last night with the stagehands' union. Shows resume tonight. Now if only the Hollywood writers and producers could follow their example so we won't have to face the prospect of primary season without political jokes. As the Post's Paul Farhi laments today, "If an irony falls in the primary and there's no late-night comic to tell a joke about it, did it really exist?"