The U.S. government weighs bailouts for mortgage lenders as IndyMac bites it.

The U.S. government weighs bailouts for mortgage lenders as IndyMac bites it.

The U.S. government weighs bailouts for mortgage lenders as IndyMac bites it.

A summary of what's in the major U.S. newspapers.
July 12 2008 6:02 AM

Bank Bummer

All the papers lead with the continued troubles of mortgage lenders. The New York Times and the Washington Post lead with the U.S. government deciding yesterday that Freddie Mac and Fannie Mae did not yet need to be bailed out. The Los Angeles Times focuses on the seizure by federal regulators of California-based IndyMac Bank, the largest bank to fail since the 1990s. The Wall Street Journal tops its worldwide news box with new Senate legislation to give tax relief to homeowners and overhaul regulation of Fannie Mae and Freddie Mac.

Early yesterday, Freddie Mac's stock value was down 50 percent, with Fannie Mae not far behind, but by the end of the day government officials persuaded investors to relax about "Fannie and Freddie," as the NYT calls them. Before the companies' shares rebounded, the government drafted dramatic plans to save them, plans the WP calls similar to the government's bailout of Bear Stearns in March. The Post reports that Fannie and Freddie in recent months took on larger roles in underpinning the housing industry as other companies have fled the credit markets. The two companies bought roughly two-thirds of single-family-home mortgages from January to March this year.

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The failure of IndyMac represents the second-largest failure of a bank in U.S. history, says the LAT. (The WSJ would beg to differ, calling it the third-largest bank failure in U.S. history.) Regulators shut the bank down three hours early yesterday, upsetting customers—the LAT reports that a woman leaned on the doors of a particular branch, begging to be let in to "take out a portion." Both the LAT and WSJ report that regulators blamed Sen. Charles Schumer (D-N.Y.) for instigating depositors to withdraw because the senator wrote a letter in June warning of IndyMac's "financial deterioration."

Any significant effort to fight air pollution will fall to the next president, declares the NYT, after a federal appeals court rejected an Environmental Protection Agency rule establishing a cap-and-trade system to reduce smog and the agency's chief said the EPA had no obligation to regulate heat-trapping gases. EPA administrator Stephen Johnson said he was disappointed in the court's decision because it nixed one of the most "health-protective rules in our nation's history." Utility companies challenged the rule in court, but the WP reports that many companies favored the rule and had invested in upgrades to coal plants to comply. As for greenhouse gases, Johnson said the Clean Air Act was ill-suited for their regulation. The LAT portrays the greenhouse decision less as a move by the Bush administration and more as the White House slapping the EPA in the face.

NBC Universal and Hollywood producer Dick Wolf are in a big fight over Law and Order, reports a Page One WSJ story. Wolf's friends—the Journal's sources for the story—say Wolf feels NBC doesn't do enough to promote his long-running show and airs too many reruns. NBC says Wolf is just being greedy. The paper makes up for its lame headline ("Law and Disorder") by quipping that if the legal battle were a TV show, it would be called "Law and Order: Law and Order."

The WP fronts a five-clicker on a Baghdad bookseller who the paper says represents the promise of Iraq's future. The Post calls the bookseller a steward of culture amid the constant violence that has led to the exodus of many of Iraq's educated and skilled professionals.

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The NYT fronts word that China and Russia double-vetoed a U.S.-led effort to impose sanctions on Zimbabwe at the United Nations Security Council. China would not have gone along with the veto had Russia not taken the lead. Russia differs with the United States and other members of the council on whether the situation in Zimbabwe represents a threat to international peace and security.

Irish people aren't drinking Guinness like they're supposed to, reports the LAT. Pub owners tell the Times they still sell the black stuff more than other stuff, but sales are declining as Guinness is making brisker business in Nigeria than its home country. Irish people can't hang on to their traditions, the LAT says, what with their modern commuter suburbs and long workdays.

A front-page WP story takes a look at how high-tech portable electronic devices allow for precise geographical tracking. Users may not realize, the Post reports, that they may be creating a permanent record of their travels that is available not just to their phone company, but possibly also to other users and to law enforcement, and to lawyers.

Everybody Was "Cane Fu" Fighting … The WSJ's wacky story for today is about the rise of cane-oriented self-defense classes for senior citizens. While the trend is new, cane fighting is old—the story notes that there were a number of walking-stick attacks in the U.S. Capitol during the 19th century, including a brutal caning by South Carolina Rep. Preston Brooks on Massachusetts Sen. Charles Sumner, which saw Sumner carried away unconscious and bleeding.