The New Nation - Internet Edition

Bush signs rescue bill but markets slump

AFP, Washington

US President George W. Bush Friday signed a historic 700-billion-dollar Wall Street bailout but markets slumped as investors realized the bill would not be an instant fix for the broad financial crisis.

The House of Representatives voted 263 to 171 to pass the largest US government economic intervention since the 1930s, after sparking market and political turmoil by rejecting an earlier version of the bailout on Monday.

Following two weeks of high political drama, Democratic leaders credited White House nominee Barack Obama for helping to win over votes of wavering Democrats to end a political crisis which became a major test of leadership between he and Republican John McCain.

"I am hopeful that we have gone a long ways towards restoring confidence in our markets," said Democratic Senate Majority whip James Clyburn.

Lawmakers said that the combination of tumbling stocks, which pulled down market-linked pension plans, and a credit freeze which had bitten deep into the day-to-day economy, had changed the political calculation since Monday.

However, McCain called the bailout package a necessary "outrage" and vowed to clean up Wall Street if elected.

"This rescue bill is not perfect, and it is an outrage that it's even necessary," he said. "But we must stop the damage to our economy done by corrupt and incompetent practices on Wall Street and in Washington."

Top House Republican John Boehner said that the version of the bailout passed by the House was superior to the original version requested by the Bush administration, which some critics described as a "blank check."

"The passage of this flawed but necessary bill is not cause for celebration," he said, saying Congress had allowed sectors of the finance industry to "run amok."

House speaker Nancy Pelosi immediately signed the bailout package, which allows the US Treasury to buy up billions of dollars in bad mortgage debts choking the US economy, and sent it to Bush for his signature.

And she paid tribute to Obama, who will take responsibility for the reeling economy if he manages to defeat McCain in the election on November 4.

"I really want to commend Barack Obama," said Pelosi, a Democrat, adding that the Illinois senator had helped reassure lawmakers in tough reelection fights.

"He really gave them confidence that this was the right thing to do," Pelosi said.

Obama said while campaigning in Pennsylvania that he was glad "we finally got this dealt with" and called on the Treasury to carry out the plan in a way that "protects taxpayers" and helps avert further foreclosures.

"I want those plans on tap quick so that we start getting some relief to homeowners out in neighborhoods," he said.

Maryland Democratic representatives Donna Edwards and Elijah Cummings said they had received calls from Obama after voting against the original package. "It meant a lot to me that somebody who at least has a 50-50 shot at being the next president of the United States would take time," Cummings said.

The Senate passed a revised version of the bailout package 74-25 on Wednesday, including sweeteners on extending bank deposit insurance and expired tax breaks in order to get more House Republicans behind the legislation.

The debate resumed amid more shocking news for the world's largest economy which shed some 159,000 jobs in September, as the weight of the housing collapse and credit crunch hit a broad swath of industries.

The unemployment rate held at 6.1 percent, a five-year high, with payrolls having fallen by 760,000 this year, the Labor Department said.

Global stocks sank heavily early Friday with losses in Asia, as some lawmakers continued to make known their opposition to using vast amounts of taxpayer money to bail out Wall Street firms. The amended version of the plan is laced with 150 billion dollars in tax breaks to coax reluctant lawmakers from both the Democratic and the Republican parties to get on board.

The bailout gives the US Treasury power to buy up toxic mortgage debt which has been choking the financial industry and would create a 700-billion dollar federal program to buy bad assets from banks and other financial firms.

The Senate raised the ceiling on federal insurance for bank deposits from 100,000 dollars to 250,000 dollars, and added up to 150 billion dollars in tax break extensions for middle class families and business.

They also retained limits on "golden parachute" severance payments to disgraced Wall Street executives.

20 killed by US strike in Pakistan

Reuters, Miranshah

Pakistani villagers collected body parts of at least 20 people, including several suspected Arab militants, killed by a U.S. missile strike on a house in a northwestern tribal area, intelligence officials said on Saturday.

A pilotless drone aircraft launched the attack late on Friday in the village of Mohammad Khel, 30 km (20 miles) west of Miranshah in North Waziristan, a known sanctuary of al Qaeda and Taliban militants.

"We now have a figure of 20 that includes eight residents of the house, five other locals and seven foreigners," an intelligence official said while speaking on condition of anonymity.

The foreigners appeared to be Arabs, although their nationalities were unknown, the official said.

The News newspaper reported that the strike was carried out based on information that the foreigners had been invited to a feast by pro-Taliban tribesmen following the end of the Muslim fasting month of Ramadan.

There were no indications that any of those killed were regarded by U.S. counterterrorism agencies as top tier al Qaeda targets, sources said.

A army spokesman said on Saturday that there had been an explosion in the area, but was unable to confirm the cause.

US soldier among 27 killed in Iraq

AFP, Baghdad

A US soldier was killed by a roadside bomb in southern Iraq as the country celebrated the Muslim Eid al-Fitr holiday which ended the fasting month of Ramadan, the US military said on Friday.

The incident occurred on Octobre 2 in the Iraqi city of Amara, where US soldiers continue to provide logistical support to the Iraqi army since a June crackdown against Shiite militias and insurgents. Meanwhile, twin suicide bombings near Shiite mosques in Iraq's capital killed 20 people on Thursday as worshippers celebrated Eid al-Fitr, which ends the Muslim holy month of Ramadan, officials said.

Another six people were shot dead in an ambush north of Baghdad drawing condemnation from the United Nations.

Security officials said a suicide bomber blew himself up as he was being frisked outside the Al-Rassol mosque in Jadida, a Shiite district of southern Baghdad, killing 12 people and wounding 30.

Car bomb kills 7 Russian soldiers in South Ossetia

AP, Tbilisi

A car exploded Friday, killing seven soldiers outside Russia's military headquarters in South Ossetia, and Russian authorities charged it was a terrorist bombing meant to wreck the tense cease-fire that ended their war with Georgia.

Georgia's Interior Ministry blamed Russia, accusing it of arranging the blast to provide a pretext for delaying next week's scheduled withdrawal of Russian troops from Georgian territory around South Ossetia and another Kremlin-backed separatist region, Abkhazia. The explosion, which the Russian military said also wounded eight Russian soldiers, was the deadliest single incident reported in South Ossetia since Russia and Georgia fought a five-day war over the breakaway region in August.

Under the Western-backed truce, European Union monitors have begun replacing Russian troops in the buffer zone ringing South Ossetia and the withdrawal is supposed to be completed by Oct. 11.

Sri Lanka troops kill 42 in offensive against rebels

AFP, Colombo

Sri Lankan troops killed 42 Tamil Tigers and injured 53 in a ground and sea offensive aimed at dismantling the rebels' mini-state in the north of the island, the defence ministry said Friday.

Two soldiers were killed in Thursday's clashes, and another 20 injured, said military spokesman Brigadier Udaya Nanayakkara.

The military says the rebels have lost 7,158 fighters since January, when Colombo pulled out of a Norwegian-brokered ceasefire.

The defence ministry has acknowledged the loss of 697 soldiers over the same period.

Rice lauds nuclear deal as key to US-India future

AP, New Delhi

Secretary of State Condoleezza Rice arrived in the Indian capital Saturday to commemorate - but not put her signature to - a historic deal that opens up U.S. nuclear trade with the Asia giant.

A signing ceremony that had been scheduled was dropped because, according to U.S. officials, a series of administrative steps have yet to be taken in Washington following Senate approval of authorizing legislation on Wednesday. Rice was meeting here with top government officials, including Prime Minister Manmohan Singh, External Affairs Minister Pranab Mukherjee and political opposition leaders. Speaking to reporters aboard her plane en route from Washington, Rice said she expects the civil nuclear cooperation agreement will trigger an across-the-board expansion of American-Indian relations.Rice said only administrative - not substantive - matters were delaying the signing of the agreement.

President Bush has yet to sign the authorizing legislation, and once he does he is required to certify that the agreement with India is consistent with U.S. obligations under the Nuclear Non-Proliferation Treaty, designed to limit the spread of nuclear weapons. He must also certify that it is U.S. policy to cooperate with international efforts to further restrict transfers of technology related to uranium enrichment and the reprocessing of spent nuclear fuel.

The U.S. agreement on civil nuclear cooperation allows American businesses to begin selling nuclear fuel, technology and reactors to India in exchange for safeguards and U.N. inspections at India's civilian - but not military - nuclear plants.

Era of US financial dominance over: Medvedev

AFP, Saint Petersburg

Russian President Dmitry Medvedev said Thursday the era of US financial dominance was over, and he won the backing of Germany's visiting chancellor in calling for a "more just" system.

Both Medvedev and German leader Angela Merkel called for new measures to respond to a credit crunch that has raised fears of a deep worldwide recession since it spread from the United States into international markets.

"The time of domination by one economy and one currency has been consigned to the past once and for all," Medvedev said during a forum alongside Chancellor Merkel.

"We must work together towards building a new and more just financial-economic system in the world based on the principles of multipolarity, supremacy of the law and taking account of mutual interests."

On Wednesday, the US Senate resoundingly passed a 700-billion-dollar Wall Street bailout, widely seen as the best chance of stemming the turmoil. The House of Representatives has yet to approve the move.