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Lifelines were thrown to European banks. The Dutch, Belgian and Luxembourg governments partly nationalized Fortis amid uncertainty about its ability to sell assets it holds in ABN AMRO, a Dutch bank. Dexia, a Belgian-French bank, received a $9.2 billion government cash injection. In Britain, Bradford & Bingley, a specialist in buy-to-let mortgages, was nationalized and some assets sold to Spain's Santander. Hypo Real Estate, Germany's second-largest property lender, obtained $51 billion in credit guarantees from the government and the banking industry. And Glitnir, Iceland's third-largest bank, was nationalized.
Ireland's government took the extraordinary step of guaranteeing all deposits in six Irish banks after their share prices suffered huge losses. The guarantee covers around $575 billion of liabilities, more than twice Ireland's gross domestic product.
The Reserve Bank of India stepped in to reassure depositors that ICICI was financially sound amid reports of a wave of cash withdrawals from the bank. And Russia provided a further $50 billion to increase liquidity in its banking system. This comes on top of a $130 billion package doled out to Russian banks in the form of loans, tax cuts and delayed tax payments.
GE said it was planning to offer $12 billion in common shares, and that Warren Buffett's Berkshire Hathaway would buy $3 billion in preferred shares. Jeffrey Immelt, the conglomerate's boss, was active this week in pressing politicians to pass the bailout package because of the "negative ripple effects" of the financial crisis on business.
A consortium led by Abertis, a Spanish infrastructure company, pulled its $12.8 billion proposal to take over the running of Pennsylvania's turnpike, the state's main toll road. In May the consortium, which includes Citigroup, won the bidding for the lease with the backing of Pennsylvania's governor, but the privatization was resisted by legislators.
After almost losing its license to fly, Alitalia saw a rescue plan approved by the two remaining unions that were holding out against a deal, giving the go-ahead for a sale to CAI, a consortium of 16 Italian entrepreneurs. Italy's government has been trying to privatize the struggling airline for more than two years. CAI intends to relaunch a slimmer Alitalia next month, after merging its operations with Air One, a domestic rival.
The Baltic Exchange Dry index, which measures the cost of dry bulk shipping, continued to drop. The Baltic Dry's fall is reckoned to reflect weakened demand for raw materials in China.
Political economy
Mexican President Felipe Calderon sent a security package to Congress aimed at fighting a wave of drug-related violence that has claimed more than 3,000 lives this year. His move followed the discovery of six more bodies in Tijuana, a day after 16 other corpses had been found.
The U.S. Congress approved a deal on civil nuclear cooperation with India, the last hurdle for a controversial agreement that gives India the privileges of a nuclear power without having signed the Nuclear Non-Proliferation Treaty. India and France signed a deal on cooperation in energy, paving the way for the sale of French nuclear reactors to India.
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Lights out at U energy conference. Irony police notified.
Just as Lawrence Kazmerski, a top official at the National Renewable Energy Laboratory, was about to give the keynote address at the University of Minnesota's annual E3 conference at the RiverCentre in St. Paul, the lights went out, bathing the audience in darkness and a deep sense of irony.
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