US stocks rebound as government plans 'bad bank'; short-selling explained; Chinese milk recall; Thaksin the puppet-master; and North Korea to 'go its own way' on nukes.
Top of the Agenda: Financial aid plan
Stocks posted heady gains worldwide as U.S. regulators announced they would meet to discuss a potentially sweeping financial cleanup plan. The Washington Post reports a "Committee of Three"—U.S. Treasury Secretary Henry Paulson, U.S. Federal Reserve Chairman Ben Bernanke, and Bank of New York President Timothy Geithner—has largely formulated the U.S. government's response to recent financial turmoil, and is now putting together plans that are potentially larger than anything seen yet.
The Wall Street Journal says the new plan, which Paulson detailed to the U.S. Congress yesterday, is the broadest response of its kind since the 1930s. The article says the plan could include the formation of a government agency to buy bad assets from banks and insure money market funds. Regulators in the United States and United Kingdom also moved yesterday to curb short selling of stocks (FT), which some bank presidents have blamed for the precipitous decline in their shares.
- The BBC has a Q&A explaining what short-selling is, and some of the controversies surrounding it.
- A recent Daily Analysis looks at the scope of Washington's proposed reforms.
- Council on Foreign Relations' Brad Setser blogs about the scale of central bank and sovereign fund intervention in markets and says it has been "breathtaking."
CHINA: After weeks of discussion and testing over the safety of Chinese milk, and various reports of contaminations, Beijing ordered stores across China to clear their shelves of dairy products in a massive recall effort (BBC).
China is also changing the rules (Xinhua) through which some food producers have traditionally gained exemptions from inspection.
THAILAND: The Bangkok Post reports Thaksin Shinawatra, Thailand's former prime minister who was ousted in September 2006, is again pulling strings of power in the country following the appointment of his brother-in-law, Somchai Wongsawat, to serve as the new prime minister.
N.KOREA: Yonhap News Agency reports on North Korean claims that it is restoring its Yongbyon nuclear reactor.
Israel's Tzipi Livni seeks coalition; says she will go to polls if agreement doesn’t come soon.
Somalia guerilla leaders pledge war despite Islamic Courts peace talks.
This is an excerpt of the CFR.org Daily News Brief. The full version is available on CFR.org.