All the major U.S. newspapers lead today with news that the Federal Reserve has lowered its benchmark interest rate by half a percentage point and with word from Washington that the government is considering a plan to bail out homeowners facing foreclosure.
The Fed's move brings the interest rate banks use when lending to one another overnight to 1 percent, the lowest it's been since the dot-com bust of 2003, reports the New York Times. The NYT piles on the gloom, noting that banks remain reluctant to lend at all, that unemployment is up, and that consumer spending is down. The sky isn't falling, but the "ground is moving from underneath us," as an investment-firm economist puts it. (In a separate front-page story, the Times reports on layoffs emanating from Wall Street into the greater New York region.) To reduce foreclosures, the government is putting together a plan to use $50 billion from its $700 billion bailout of the banking industry to guarantee $500 billion to $600 billion in home loans.
Negotiators for the U.S. Treasury Department and the Federal Deposit Insurance Corp. are working on the homeowner bailout and may announce their plan in a few days, according to the Washington Post's anonymously sourced lead story. While the government has so far focused on a bailout for banks, continued market turmoil and political pressure have pushed officials toward considering direct homeowner aid. The plan under discussion would reduce a homeowner's monthly mortgage payments by cutting the interest rate or extending the repayment period. In exchange for these favors, the lender would get a government guarantee of compensation for losses in case the homeowner defaults anyway.
The Wall Street Journal emphasizes the international nature of the current financial crisis, reporting that central banks in countries around the world are taking rate-cutting measures similar to the Fed's. The Los Angeles Times predicts that the "depth of the country's economic distress" could be revealed today, when the government releases its estimate of third-quarter growth. In its lead story, USAToday notes that credit card holders are unlikely to see any interest rate relief.
The WP reports that the 33 banks signed up to benefit from billions in bailout dollars from the Treasury Department are continuing to pay dividends to shareholders, even though the money is supposed to be for loans. While foreign banks are typically required to suspend quarterly dividend payments before repaying government investments and the U.S. government required Chrysler to do so in a 1979 bailout, the Treasury says such a condition would have discouraged banks from participating in its program.
The NYT fronts a fun story on the different stuff that goes on at rallies for the Democratic and Republican presidential candidates. The piece has lots of riffing on rope lines and one-liners. Among other comparisons, the Times reports that Barack Obama and Sarah Palin get people similarly fired up, whereas the tickets' "grayer eminences," Joe Biden and John McCain, tend to elicit less enthusiasm. The Times is also pumped about early voting, reporting that lots of people are doing it this year. On a more depressing note, the LAT fronts a story on the fretting over likely Election Day confusion and vote suppression, and the Post offers a Page One story on voter controversies in Ohio.
Colombian security forces are under international scrutiny for killing lots of civilians, according to a front-pageNYT story. Promotions and benefits give soldiers incentive to shoot vagrants and claim combat kills, a trend the Times says calls into question the Colombian government's reported gains in its struggle against the FARC. Colombia is the chief ally of the United States in Latin America and receives $500 million yearly in counterinsurgency aid.
The International Monetary Fund has created a new type of loan for "A-list" developing countries battered by the global financial crisis, reports the WSJ. The new type of loan comes without the restrictions usually attached to IMF loans, which typically require budget cuts or interest rate increases.
USAT tops its front page today with an exclusive story on the Chinese government putting together a list of U.S. athletes it feared might demonstrate during the summer's Olympic games. The athletes roused suspicion because their association with the advocacy group known as Team Darfur. The U.S. Olympic Committee, for its part, considered China's concerns complete bunk.
Many gay couples remarry each other many times in order to keep up with different and changing laws on gay marriage around the country, reports the WSJ. It's not clear that there are more than anecdotes to prove this trend, in which same-sex couples "tie themselves in knots to tie the knot," but the Journal does have the goods on gay folks scrambling to wed in California. In San Francisco, marriage license applications have tripled in the last month ahead of an anti-gay-marriage referendum on Election Day.