Word: deal
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...problem." Leveraged financial institutions (banks, investment banks, hedge funds) make investments with lots of borrowed money, so when their portfolios tank they can quickly get into a situation where they can no longer make good on their debts. When that happens to a single institution, it's no big deal to let it fail. But if it's happening to a lot of them at once, you get the paradox of deleveraging: a downward spiral in which failure begets more failure and retrenchment begets more retrenchment...
European markets also seemed to anticipate a deal to bail out America's ravaged financial sector. But there was widespread irritation in Europe at American voters and their Congressional representatives airing largely ideological objections to the world's last chance to avoid unthinkable calamity...
...even if analysts outside the U.S. are confident a deal will get done in Washington, no one believes that will put an end to the current bad news. A bailout would be just the beginning of what looks to be a long and painful unwinding for Asia, for example. Even if the U.S. government can pass a plan to pump money into the financial system by buying bad mortgages - thus freeing up banks to lend money elsewhere - it won't "address the decimation of the wealth effect of the U.S. consumer," which many export-led Asian economies rely on, says...
...Also, the fact that every big FDIC deal so far in this crisis has been different - IndyMac was allowed to fail, with only insured deposits safe; WaMu was seized, but all depositors were protected; and Wachovia was sold in a deal that protected both depositors and owners of the company's bonds but left shareholders with very little - has left investors guessing about the fate of the rest of the banking world. Hardest hit in today's market sell-off were regional banks like Sovereign Bancorp and National City, perhaps because they seem too small to get special FDIC treatment...
...strides toward honing the technology that would enable it to build nukes; he also said the IAEA had obliged North Korea's request that the agency remove its seals and cameras from the nation's primary atomic facility as part of North Korea's reversal on a nuclear disarmament deal...