The New Nation - Internet Edition

Bush to announce expanded bank bailout details

AP, Washington

The Bush administration plans to spend an initial $250 billion of the $700 billion bailout buying stock in private banks, greatly expanding protections for the U.S. financial system out of deep concern for the faltering economy, industry and government officials said Monday night. President Bush planned to announce the details Tuesday morning.

Agreement on the plan came after a remarkable Treasury Department meeting between top government economic officials and executives of the nation's largest banks to revamp the most costly financial rescue in the nation's history.

The plan also would provide a way for the government to insure loans that banks make to each other, a critical part of the credit system that has become frozen and put many businesses in peril.

Earlier Monday, stocks soared around the world in response to dramatic government economic relief efforts in the U.S. and overseas - and the possibility of the even bolder American action.

Monday night, the Treasury Department said the administration had decided on "comprehensive actions" to bolster public confidence in the nation's financial system. Bush was to be briefed early Tuesday by economic advisers and then announce the plan, which Treasury said was designed to "restore functioning of our credit markets."

While the administration refused to provide details in advance, industry and government officials with knowledge of the plan said it would include billions of dollars in spending by the government to purchase stock in banks as a way of providing them desperately needed money so they could resume more normal lending. The industry and government officials spoke on condition of anonymity because the details were yet to be formally released.

The administration will use $250 billion of the bailout program recently passed by Congress to buy into U.S. banks, the officials said. The government initially will purchase stock of nine large banks, but the program is expected to be expanded to many others. Among the initial banks participating will be all of the country's largest institutions, including Citigroup Inc., Wells Fargo & Co., JPMorgan Chase & Co, Bank of America Corp. and Morgan Stanley, said one official, who added that administration briefers did not provide any amounts that would be received by individual banks. The administration expects to spend the $250 billion buying bank stock before the end of this year, this official said. Bush will certify on Tuesday that another $100 billion is needed from the $700 billion rescue program. That would leave the final $350 billion to be spent.

In addition to the stock purchases, the Federal Deposit Insurance Corp. will temporarily provide insurance for loans between banks, charging the banks a premium for doing so.

This FDIC program would take the form of providing insurance for new "senior preferred" debt that one bank would lend to another. This debt would be insured by the FDIC for three years, helping to unlock bank-to-bank lending, which has fallen dramatically because of fears about repayment in the face of billions of dollars of bank losses because of bad loans, primarily in mortgages.

48 killed in road accidents in India

AP, New Delhi

A series of road accidents killed at least 48 people and injured another 64 in north and northeastern India on Tuesday, government officials and police said.

At least 20 people were killed in the northern Indian state of Uttarakhand when the bus they were traveling in fell into a 500-foot-deep (152-meter-deep) gorge, Amit Chandola, a government spokesman told Associated Press.

The bus was carrying about 40 passengers and plunged as the driver tried to negotiate a turn on the curving mountain road, he said, adding that 20 people have been rescued so far.

Of those rescued, 15 people were injured, at least six of them seriously, he said, adding that the number of casualties may increase.

In another accident in Uttarakhand, five people were killed when the jeep they were traveling in rolled down a hill, Chandola said.

Five other passengers were injured, three of them seriously, he said. In the northeastern state of Assam, an overcrowded, speeding bus crashed into a stationary truck, killing 23 people and injuring 44 others, police said. The bus was carrying laborers to work before dawn in the state's Dhubri district some 185 miles (300 kilometers) west of the state capital, Gauhati.

"The bus carrying 67 passengers hit a stationary potato-laden truck with great speed, leading to the fatalities," said Dhubri police chief Parthasarathi Mahanta.

Mahanta said the driver of the bus, which had a capacity of just 35, lost control and collided with the parked truck, reducing both vehicles to "a mass of mangled steel."

NKorea to resume nuclear dismantling

AP, Seoul

North Korea planned to resume dismantling its nuclear program Tuesday for the first time in two months, days after the United States removed the communist regime from a terrorism blacklist as a reward und a disarmament pact.

Pyongyang has told the International Atomic Energy Agency that it would restart work to disable the Yongbyon nuclear reactor and allow international inspectors to resume their activity.

The plans were outlined in a restricted document to the agency's 35 board members that was obtained by The Associated Press.

Separately, IAEA spokeswoman Melissa Fleming said agency inspectors "will also now be permitted to reapply the containment and surveillance measures at the reprocessing facility." That meant agency seals taken off the plant and monitoring cameras recently removed at the North's orders would be restored.

Two months ago, North Korea stopped disabling Yongbyon in anger over U.S. demands that Pyongyang accept a plan to verify its accounting of nuclear programs as a condition for removal from a blacklist of countries accused of sponsoring terrorism.

Until late last week, the North had threatened to reactivate the plutonium reprocessing plant at Yongbyon.

But the North and the U.S. reached a compromise on the verification row following a trip to Pyongyang by chief U.S. nuclear envoy Christopher Hill. Washington announced its removal of the North from the terror list Saturday, saying Pyongyang had agreed to all its nuclear inspection demands.

Syria establishes diplomatic ties with Lebanon

AP, Damascus

Syria's president issued a decree Tuesday establishing diplomatic relations with Lebanon, and a foreign ministry official said the country will have an embassy in Beirut by the end of the year.

The U.S. and Lebanese anti-Syrian politicians have long demanded Syria recognize Lebanon's sovereignty by establishing official relations. The two countries have not had formal diplomatic ties since they gained independence from France in the 1940s.

Lebanon and Syria agreed in August to establish ties and demarcate their contentious border. That landmark agreement, which came during an official visit by the Lebanese president to Damascus, and Tuesday's formal decree reflect Syria's efforts to break with past isolationist policies and resolve tensions with its neighbors.

Syrian President Bashar Assad's decree, carried by the official Syrian news agency SANA, said that a "diplomatic mission for the Syrian Arab Republic at the embassy level will be established in the Lebanese capital." It did not provide details or say when the embassy would open.

But a Syrian Foreign Ministry official said it will happen before the end of the year.

"There will be a Syrian embassy and an ambassador in Lebanon soon and before the end of the year," the official told The Associated Press, speaking on condition of anonymity in line with regulations.

Relations between the two Arab nations have been lopsided in Syria's favor since the 1970s, when Syria sent its army into Lebanon and retained control there for nearly 30 years. Ties unraveled when former Lebanese Prime Minister Rafik Hariri was killed in a 2005 car bombing that many Lebanese blame on Syria - a charge Syria denies. After Hariri's assassination, Syria caved to U.S.-led international pressure and withdrew its troops from Lebanon.

Pakistani president hails China as he looks for financial help

AFP, Beijing

Pakistani President Asif Ali Zardari hailed China as "the future of the world" ahead of his arrival in Beijing on Tuesday for a trip that is expected to see him seek urgent financial help.

Zardari made it clear in an interview with China's official Xinhua news agency that building economic ties would be his top priority during his four-day trip, his first state visit anywhere since taking office in September.

"China is the future of the world. A strong China means a strong Pakistan," Xinhua quoted Zardari as saying in an interview in Islamabad on Monday ahead of his departure.

His comments come as Islamabad's alliance with Washington in the "war on terror" falls on rocky ground due to Pakistan's inability to shut down Taliban and Al-Qaeda fighters based in its tribal belt. Zardari, due to arrive in Beijing at 6:00 pm (1000 GMT), inherited a country on the brink of bankruptcy and plagued by huge security problems from Islamic extremists.

The global financial crisis has pushed Pakistan closer to the financial edge, with reports-denied by Islamabad-that it faces bankruptcy as early as February.

And while Pakistan has looked to the United States for financial help, it is also one of China's closest allies in Asia, with Beijing seeing the country as a counter-balance to rival India.

China has boosted its economic interests in Pakistan in recent years, funding major infrastructure, engineering and mining projects, including a deep sea port, as well as helping develop its nuclear power industry.

McCain vows: I'll be back

AFP, Wilmington

In a career littered with comebacks, Republican John McCain is now vowing one more Herculean effort to overhaul Barack Obama's commanding poll lead and restore his White House dream.

While the Democratic hopeful for the November 4 election was Monday rolling out a costly new plan to kick-start the US economy, McCain went back to basics in extolling his own record of heroism and service to a crisis-torn nation.

"I have been written off on so many occasions by political pundits that it's hard for me to count," he told CNN after delivering a retooled stump speech that portrayed Obama as dangerously inexperienced for the challenges at hand.

"I think it is more lives than a cat. But the point is, we are doing fine. I'm happy with where we are. We are fighting the good fight. That's what it is all about. That's what I love," McCain said.

Ahead of Wednesday's third and final presidential debate, the latest clutch of polls suggested McCain's all-out offensive on Obama's character has flopped with the Democrat now sitting on a double-digit lead overall.

The latest iteration of McCain's campaign address, delivered in the suddenly at-risk Republican strongholds of North Carolina and Virginia, dropped some of the more inflammatory attacks on Obama of recent days.

India to hold five state votes, test for government

Reuters, New Delhi

India will hold five state elections between November and December, votes that will test the political temperature before a general election in early 2009, the election commission said on Tuesday.

The ruling Congress party, hit by inflation and perceived weak government leadership, has been losing ground to the Hindu-nationalist Bharatiya Janata Party (BJP) in state elections over the last year. The BJP will be the incumbent in western state of Rajasthan and the central states of Madhya Pradesh and Chhattisgarh, offering a chance for Congress to regain some political ground. Incumbent governments in India often do badly in elections. The northeastern state of Mizoram is run by a local regional party, while Delhi is in the hands of Congress.

The BJP is campaigning on the need for a tougher central government, such as harsher anti-terrorism measures to combat suspected Islamist bomb attacks and Maoist insurgents.

The BJP also has a history of introducing more pro-market reforms than the left-of-center, secular-leaning Congress party, although in opposition it has opposed most of the government's reform measures.

Chhattisgarh, one of the states most hit by a Maoist insurgency, could test whether voters punish Congress on what many Indians see as lax government security policies.

The election commission said it was still discussing an election date for Indian Kashmir.

Zimbabwe power-sharing deal faces parliament test

Reuters, Harare

Zimbabwe's parliament resumes work on Tuesday for a session that could test a power-sharing deal between President Robert Mugabe and opposition leader Morgan Tsvangirai.

Mugabe's ZANU-PF party goes into the new parliament stripped of a majority for the first time since independence from Britain in 1980 and needing to work with the opposition Movement for Democratic Change (MDC) to run an effective government.

MDC parliamentarians jeered and booed Mugabe when he officially opened parliament on August 26 after an election in March which the opposition says he rigged to retain power.

Former South African President Thabo Mbeki is in Harare to hold talks to try to rescue the power-sharing deal he brokered, which analysts say is Zimbabwe's best hope for ending an economic crisis.

The pact, which Mugabe and Tsvangirai signed last month, is in danger of collapse because of disagreements over the cabinet. Analysts say the convening of parliament may open a public quarrel on the issue.

"It's going to be interesting to see whether the two parties are able to engage in a constructive way or whether there are some who want to slug it out," said Lovemore Madhuku, chairman of political pressure group National Constitutional Assembly.