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EARLYBIRD

Top News

Government moves to protect Fannie & Freddie, spending bills signal a long stay in Afghanistan, Bloomberg proposes new poverty standards, oil producers poised to become country's top creditors, Sarkozy hosts summit of Mediterranean leaders.

• "The federal government unveiled a broad program" Sunday "evening to bolster troubled mortgage giants Fannie Mae and Freddie Mac, extending unprecedented support to the companies and proposing new authority to lend them money and even buy their stock," the Washington Post reports. "Scrambling to announce the initiative before the trading week began, federal officials said they would allow the firms for the first time to borrow money from the Federal Reserve."

• "The desperate worry over the health of huge financial institutions with country cousin names -- Fannie Mae and Freddie Mac -- reflects a reality that has reshaped major spheres of American life: the government has in recent months taken on an increasingly dominant role in assuring that Americans can buy a home or attend college," the New York Times reports.

 

• "Polls show that Americans, pressed by high gasoline prices, may be open to offshore drilling.... But prying open U.S. waters for oil and gas drilling remains a daunting political task," the Washington Post reports. "Real estate developers and tourism industries oppose drilling offshore. Environmentalists are battling against it. Most Democrats in Congress oppose it, too. And for years, Florida politicians, including the president's brother, former Florida governor Jeb Bush (R), have fought against drilling."

• "A top-priority federal investigation of military procurement fraud in Afghanistan has been forced to shift direction because of a congressional panel's allegation that a senior U.S. diplomat sought to cover up the scheme," the Los Angeles Times reports. "The accusation against the ambassador appears to be unraveling, however, and prosecutors are scrambling to assess the effects on a case involving what is considered to be one of the most serious procurement abuses in years."

Congress: Spending Bills Signal Long Stay In Afghanistan

• "Congress could complete its work on a housing-recovery package as early as this week as lawmakers look to make minor changes to the legislation so they can ship it quickly to the White House before the August recess," CongressDailyAM (subscription) reports. "The Senate passed its version of housing legislation on Friday, 63-5, to revamp the oversight of government-sponsored enterprises Fannie Mae, Freddie Mac and the Federal Home Loan Bank System; overhaul the Federal Housing Administration's mortgage insurance program, and allow the FHA to guarantee up to $300 billion in new loans for at-risk subprime borrowers."

 

• "Congress has quietly used fiscal 2008 legislation on military construction to signal that it plans on a long-term military presence in Afghanistan," the Washington Post reports. "In the recently approved supplemental funding bill for the Iraq and Afghanistan wars, legislators approved construction of a $62 million ammunition storage facility at Afghanistan's Bagram Air Base, where 12 planned 'igloos' will support Army and Air Force needs."

• "After 18 months of holding together on issues big and small, Senate Republican leaders last week found the first major crack in their foundation as some of their most loyal colleagues defected in the face of political headwinds," Roll Call (subscription) reports.

• House Speaker Nancy Pelosi, D-Calif., "appears intent on preventing votes on opening more areas to offshore drilling despite the stirrings of a revolt by rank-and-file Democrats after months of concerted efforts by House Republicans," Roll Call (subscription) reports.

• The situation in the Democratic Party "has grown increasingly" delicate for Sen. Joseph Lieberman of Connecticut, "once his party's vice-presidential candidate and now a self-styled 'independent Democrat,' the New York Times reports. "He has zigzagged the country on behalf of" John McCain, "the presumptive Republican presidential nominee, and, in recent weeks, amplified his criticism of Senator Barack Obama to a point that has infuriated many of his Democratic colleagues."

 

Iraq: Election Laws Unfinished; Britain To Pull Some Troops

• "With time running out to organize provincial balloting slated for the fall, representatives of Iraq's main political blocs agreed Sunday to submit a draft election law for a vote this week with key questions left undecided," the Los Angeles Times reports. "Among the issues in contention are whether to allow voting in the disputed city of Kirkuk, which ethnic Kurds hope to include in their semiautonomous region to the north, and whether to permit the use of religious images in campaigning."

• "Britain plans to substantially scale back its troop numbers in Iraq during 2009, the head of the country's armed forces said Sunday," AP reports. "Air Chief Marshal Jock Stirrup said Britain would withdraw soldiers to help ease major strains on its military, which has been stretched by deployments in both Afghanistan and southern Iraq."

• "Confusion" over remarks made last week by Prime Minister Nouri al-Maliki "reflects the dilemma facing Iraqi government leaders," BBC News reports. "On the one hand, many of them -- particularly among the Shia factions -- face a public which regards the US presence as a problem rather than a solution.... Yet the government knows that its own forces are not yet in a position to stand on their own against the two major challenges they face -- the Sunni radicals of al-Qaeda and related groups, and the militant Shia militias which were partly suppressed in fierce battles this spring in Basra and Baghdad."

• "Wajih Hameed is an Iraqi general with an attitude." His "swagger sometimes grates on American officers," but "Maj. Gen. Jeffery Hammond sees it as a hopeful sign the Iraqi army -- generals and soldiers alike -- has reached a new level of self-confidence, pointing the way toward truly independent Iraqi forces and, eventually, an exit for U.S. combat troops," AP reports. "The flip side is that the Americans feel their control slipping away."

• "In a city with constant electricity shortages but no lack of sunshine, the new buzz is solar energy," the Los Angeles Times reports. "Iraq's decision to embrace clean energy has little to do with cost cutting or the environment: The country's policymakers want to improve security, and the national grid doesn't supply enough electricity to illuminate city streets."

Nation: Bloomberg Proposes New Poverty Standards

• "Calling the current federal poverty measure broken and outdated, Mayor Michael R. Bloomberg (I) on Sunday unveiled a new method that he and his aides said gives a more accurate picture of the poor, and that he hopes eventually will become the new national standard," the Washington Post reports.

• "Randi Weingarten, the New Yorker who is rising to become president of the American Federation of Teachers, says she wants to replace President Bush's focus on standardized testing with a vision of public schools as community centers that help poor students succeed by offering not only solid classroom lessons but also medical and other services," the New York Times reports. "Ms. Weingarten, 50, is running unopposed for the presidency of the national teachers union, whose delegates at an annual convention in Chicago are expected to elect her" today.

• "Anheuser-Busch agreed on Sunday night to sell itself to the Belgian brewer InBev for about $52 billion, people briefed on the matter said, putting control of the nation's largest beer maker and a fixture of American culture into a European rival's hands," the New York Times reports. "The all-cash deal, for $70 a share, would create the world's largest brewer, uniting the maker of Budweiser and Michelob with the producer of Stella Artois, Bass and Brahma."

• "With electricity costs rising -- along with global-warming guilt -- consumers across the country are struggling to wean themselves from the A/C," the Wall Street Journal reports. "It remains to be seen whether they'll take a cue from Marilyn Monroe in 'The Seven Year Itch' and stash their undies in the icebox. But they're trying just about everything else."

• "In recent months... several studies have produced a stream of evidence that mostly points in the same direction, and also happens to overturn one of the most stubborn American stereotypes: the belief that this is a land whose gifts, charms and joys flow mostly to young people," the Washington Post reports. "The studies show that when you check on how happy people are at various ages, the elderly generally come out ahead."

Economy: Oil Producers Poised To Become Top U.S. Creditors

• "Though the implosion of investor confidence in Fannie Mae and Freddie Mac last week was sudden, the worries driving it have been the subject of countless warnings over many years," the Washington Post reports. "From a Washington think tank to the halls of Congress, from the Treasury to the Federal Reserve, from the Clinton to the Bush administrations, critics of the government-sponsored mortgage giants have long argued that they were allowed to operate with financial cushions that were too thin to support their far-reaching financial risks."

• "For years, Fannie Mae and its smaller rival, Freddie Mac, were destination workplaces in the Washington region," the Washington Post reports. But "after a month-long battering by a skittish Wall Street, worried that the twin mortgage giants might be running out of cash, employees of Fannie and Freddie have watched more than 80 percent of their stock value -- in concrete terms, their retirement funds -- evaporate since last July."

• "Petroleum-exporting nations from Saudi Arabia to Russia are not only charging Americans record high prices for fuel, they are also poised to become the biggest creditor to the U.S. government," Bloomberg News reports. "Holdings of Treasuries by oil producers and institutions such as U.K. banks that are proxies for Middle East nations rose 44 percent this year to $510.8 billion through April, four times faster than the rest of the world, according to the Treasury Department's most recent data. At the current pace, they'll surpass Japan, which holds $592.2 billion, as the largest owner this month."

• "The Securities and Exchange Commission announced on Sunday that it and other regulators would begin examining rumor-spreading intended to manipulate securities prices," the New York Times reports. "The timing of the announcement, made before the markets opened in Asia, was meant to warn broker-dealers, hedge funds and investment advisers to quell any spreading of rumors before trading started" today.

• "The federal government's seizure of IndyMac Bank is deepening worries among executives, regulators and consumers about the U.S. banking industry, which is in a tightening bind following a long run of prosperity," the Wall Street Journal reports. 'Banks and thrifts are struggling against a rising tide of bad loans, and it is becoming increasingly clear that some lenders won't be able to escape."

World: Sarkozy Brings Middle Eastern Leaders Together In Paris

• "Leaders of 43 nations with nearly 800 million inhabitants inaugurated a 'Union for the Mediterranean' on Sunday," the New York Times reports. "But the meeting was also an opportunity for President Nicolas Sarkozy of France to exercise some highly public Middle East diplomacy by bringing President Bashar al-Assad of Syria out of isolation for an Elysee Palace meeting and by playing host to a session between Prime Minister Ehud Olmert of Israel and the Palestinian president, Mahmoud Abbas."

• "A multi-pronged militant assault on a small, remote U.S. base close to the Pakistan border killed nine American soldiers and wounded 15 Sunday in the deadliest attack on U.S. forces in Afghanistan in three years, officials said," AP reports. "The attack on the American troops began around 4:30 a.m. and lasted throughout the day."

• "Sudan's president has been accused of genocide, crimes against humanity and war crimes in Darfur by the prosecutor of the International Criminal Court," BBC News reports. "Luis Moreno-Ocampo told judges at The Hague that Omar al-Bashir bore criminal responsibility for alleged atrocities committed over the past five years. The three-judge panel must now decide whether there are reasonable grounds for an arrest warrant to be issued."

• "Prosecutors indicted 86 hardline secular Turks" today "on terrorism charges for their alleged involvement in plots to topple the Islamic-rooted government, a chief prosecutor said," AP reports. "Aykut Cengiz Engin said the 86 include at least one former general, along with journalists, academicians and businessmen."

• "Pope Benedict XVI has raised expectations that he will apologize directly to victims of clergy sexual abuse while he is in Australia this week for a Roman Catholic gathering of hundreds of thousands of pilgrims," the Washington Post reports. "The leader of the church told reporters during a 20-hour flight to Australia for a nine-day visit starting Sunday that he would do everything possible to achieve 'healing and reconciliation with the victims' of maltreatment by priests."

• "The head of Mexico's intelligence service has warned that the country's democratic institutions, including the national Congress, are under threat from powerful drugs cartels. In one of the frankest admissions yet from a leading authority of the scale of the problem confronting Mexico, Guillermo Valdes, head of Cisen, the government's intelligence organisation, told the Financial Times and a small group of foreign media recently: 'Drug traffickers have become the principal threat because they are trying to take over the power of the state.'"

• "It has come to this: Zimbabwe is about to run out of the paper to print money on," the Los Angeles Times reports. "Fidelity Printers & Refiners, the state-owned company that tirelessly churns out bank notes for the Robert Mugabe regime, was thrown into a crisis early this month after a German company stopped supplying bank note paper because of concerns over Zimbabwe's recent violent presidential election."

• "From birth to death, corruption courses through the lives of Russians -- a phenomenon that newly elected President Dmitry Medvedev recently said has become 'a way of life for a huge number of people,'" the Washington Post reports. "Medvedev has pledged to introduce new anti-corruption legislation by October as part of a broad campaign to reduce bribery."

• "The takeover of" Pakistan's "Ziarat marble quarry, a coveted national asset, is one of the boldest examples of how the Taliban have made Pakistan's tribal areas far more than a base for training camps or a launching pad for sending fighters into Afghanistan," the New York Times reports. "A rare, unescorted visit to the region this month... revealed how the Taliban were taking over territory, using the income they exact to strengthen their hold and turn themselves into a self-sustaining fighting force."

• The Los Angeles Times reports on the Cuban "government's ultimate goal to vastly reduce its dependence on more efficient foreign producers, especially for favorite foods such as rice, meat and dairy. President Raul Castro spurred the planting of idle lands around cities with a series of reforms in recent months aimed at improving self-sufficiency."

Campaigns: He's Not Laughing

• Obama's campaign is condemning a New Yorker magazine cover that depicts him in a turban, fist-bumping his wife, as an American flag burns in the fireplace. The magazine says the cover is satire. Earlybird's Campaign News section has details.

Commentary: Saving Fannie And Freddie

• Earlybird's Pundits & Editorials section offers insight into what the government's role should be in saving the mortgage giants and resolving the housing crisis.

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