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EXECUTIVE SUMMARY

- Central banks respond to market woes; Fed makes $180 billion available for loans.
- Livni wins in Israel; coalition challenges ahead.
- Arrests following Yemen embassy bombing.
- Bolivia’s Morales seeks deal with opposition.

Top of the Agenda: Central Banks Respond

Several of the world’s most influential central banks unveiled a coordinated response to this week’s market turmoil and broader concerns about financial markets. The U.S. Federal Reserve announced it would make an additional $180 billion available (FT) to foreign banks for overnight and longer-term money markets. The European Central Bank, Bank of Japan, Bank of England, Bank of Canada, and Swiss National Bank made a joint statement (WashPost) that they would work with the U.S. Fed to help make short-term loans available to financial institutions in their countries. Separately, the FT reports Russia will inject over $19 billion to support its sputtering financial markets, following a dramatic stock slide.

The moves come on the heels of another harrowing day on Wall Street. The Dow Jones Industrial Average fell over 4 percent (NYT) yesterday—with major financial firms suffereing much steeper losses—despite government reassurances that precautionary measures by the Fed and U.S. Treasury would help stabilize markets. Asian indices fell this morning, though European shares climbed slightly (AP) in response to the central banks’ joint action.

A news analysis from the Wall Street Journal says the credit crisis, spawned from bad U.S. mortgage-backed debt, has spread into the worst financial crisis since the 1930s, and that there is no clear end in sight.

A new Daily Analysis from CFR.org looks at what sorts of new market regulation might come as a result of the turmoil, and what they might mean for U.S. financial interests globally.

MIDDLE EAST: Livni Wins in Israel

Israel’s Foreign Minister Tzipi Livni won elections to run the country’s ruling Kadima party, and Haaretz reports she has started up an effort to put together a new ruling coalition.

Palestinian Authority President Mahmoud Abbas welcomed Livni’s victory, but a video analysis from al-Jazeera says broader Palestinian opinion on the vote is less warm.

YEMEN: Officials in Sana’a say twenty-five people have been arrested (AP) over attacks on the U.S. embassy in Yemen, which killed sixteen people yesterday.

PACIFIC RIM: Australia’s Uranium

An Australian government committee recommended against trading uranium (Bloomberg) to Russia unless Moscow meets certain conditions, including a full separation of civilian and military nuclear facilities.

N. KOREA: Chosun Ilbo runs an analysis of which North Korean officials seem to have curried the trust of Kim Jong-Il, in an effort to determine who might stand poised to gain power if rumors about Kim’s declining health prove accurate.

SOUTH & CENTRAL ASIA: Pakistan Concerns

Dawn reports that U.S. drones attacked tribal regions of Pakistan and says the attacks seem to contradict recent statements by U.S. military commander Adm. Michael Mullen to Pakistani officials. Pakistani leaders called the attacks “counterproductive” and said unilateral airstrikes in the country were “unacceptable” (Daily Times).

INDIA: The Hindu looks at a slew of new measures introduced by the Indian government to combat terrorist activity in the country.

AFRICA: Rwanda’s Powerful Women

Rwandan parliamentary elections on Tuesday saw women candidates win more than half of the contested seats, and Rwanda now has more female parliamentarians than any country. The New Times, a Kigali newspaper, looks at why Rwandan women have proven so successful politically.

SWAZILAND: Swaziland, Africa’s last absolute monarchy, faced demonstrations (Mail & Guardian) on the eve of a parliamentary vote that protestors say is a sham election.

KENYA: The East Africa Standard looks at efforts toward electoral reform in Kenya following a widely disputed presidential election last December.

AMERICAS: Morales Seeks Deal

Bolivian President Evo Morales pressed opposition parties (BBC) to accept a deal intended to curtail political unrest in some of the country’s provinces. The Miami Herald says the very fact that Morales is negotiating with the opposition is significant, but that observers shouldn’t expect easy solutions.

MEXICO: A international crackdown on one of Mexico’s leading drug cartels netted 175 more people (Dallas Morning News) this week, including several operating from the United States.

CAMPAIGN 2008: Debating Finance

Both presidential candidates responded to news of the AIG bailout on Wednesday. Sen. John McCain (R-AZ) said the focus of any bailout should be “to protect the millions of Americans who hold insurance policies, retirement plans and other accounts with AIG,” not to help the “management and speculators who created this mess.”

Sen. Barack Obama (D-IL) said the AIG bailout is the “final verdict on the failed economic philosophy of the last eight years.” Like McCain, Obama said the Federal Reserve must “ensure that the plan protects the families that count on insurance” and should not bailout AIG shareholders and management.

In an interview with FOX News’ Sean Hannity on Wednesday, Gov. Sarah Palin (R-AK) said she generally does not think taxpayers should “be looked to as the bailout, as the solution to the problems on Wall Street.”

Sen. Joe Biden (D-IL) said on the Today show Wednesday morning that he opposed the AIG bailout, but later seemed to back off of that position.

Over fifty chief executives (WSJ) from financial firms including Merrill Lynch, Citigroup, Barclays, J.P. Morgan, and Wells Fargo will meet with Obama economic adviser Dan Tarullo and McCain economic adviser Doug Holtz-Eakin on Thursday in Washington.

EUROPE: Russia-Azerbaijan Talks

RFE/RL reports on meetings between Russia’s President Dmitri Medvedev and his Azerbaijani counterpart. The article says Azerbaijan is central to Russian interests in the Caucasus but that the talks produced little of substance.

ENERGY: Deutsche-Welle previews meetings in Paris between European and Central Asian leaders over a German proposal to shore up energy ties between the regions.

OPINION ROUNDUP

In Thursday’s roundup: Meltdown on Wall Street; the threat of confrontation in the Arctic; and how to prevent the death of civilians in Afghanistan.

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