QUOTE OF THE DAY
“It took us a full night. But the results will be a source of huge relief worldwide.” – Nicholas Sarkozy, President of France
AN ALL-NIGHTER SAVES THE EURO, RALLIES MARKETS…FOR NOW
-BIG PICTURE…They talked nearly till dawn. They ordered pizza. And when it was over, the usually talkative Nicholas Sarkozy pleaded with the press, “Please, don’t make it too long.” But the all-nighter produced results: European leaders won an agreement from banks to take a 50-percent loss (the so-called “haircut”) on the face value of their Greek debt – a crucial piece of a package to protect the Euro. That would bring Greek debt down by 2020 120 percent of Greece’s GDP. Leaders also agreed on a plan to force European banks to raise new capital, to insulate them from potential sovereign debt defaults. And they pledged to enlarge a Eurozone bailout fund to $1.4 trillion, meant primarily to better protect Italy and Spain.
-REACTION…For the moment at least, investors like all this. The Dow opened up more than 250 points, Europe’s main markets saw sharp rallies led by bank stocks, and shares in Asia posted solid gains as well.
-WORRIES AHEAD…Sorry to say — there’s a devil’s-in-the-details, believe-it-when-we-see-it component to all this. As Dimitrije STEJIC notes, “It remains to be seen how many private bondholders actually fall in line, so we don’t know the figure for the total Greek debt write down for a while.” And Jean FIEVET breaks it down to some key worries:
*Are the big numbers credible? Markets analysts say: we need to see more details.
*Can such big voluntary “haircuts” be delivered by banks? Involuntary would be better for them as they can get money back from insurance. Will banks stop lending, making the growth outlook even worse?
*Skepticism that Italy’s Berlusconi can implement the pledges he brought. His offer is a bit like saying “don’t worry, chaps, a check is in the mail.” Can he deliver?
*Ireland and Portugal – will there be rumblings that they want write downs too?
As Jean notes: “The EU’s MO seems to be do as little as you can, but just enough to stave off full-blown crisis.” Finally, The Guardian says the continent’s real financial crisis is one of growth and employment. There’s no consensus about how faster growth should be achieved. AT the moment Europe’s prospects for growth look extremely bleak.
HURRICANE RINA LOSES ITS PUNCH
Hurricane Rina is expected to make landfall as a weak category one hurricane near Cancun around 7p ET. As much as 14 inches of rain is expected for the eastern Yucatan Peninsula, with 10 foot waves and storm surge up to four feet along the coast. Rina will weaken into a tropical storm Friday and then a depression as it turns toward Cuba over the weekend.
Residents are pouring out of the Thai capital by bus, plane and train Thursday, heeding government warnings to use a special five-day holiday to evacuate parts of the flood-threatened metropolis before a weekend deluge rushes through. The evacuation warning applied to only three of Bangkok’s 50 districts — Don Muang, Sai Mai and Bang Phlat — but with the government acknowledging the entire city could flood in the coming days, many residents elsewhere were leaving before the situation got worse. In the capital’s northern outskirts, waist-high water has turned roads into virtual rivers and swamped gas stations and homes. At least one foreign government is advising against all but essential travel to Bangkok, with Britain’s Foreign Office saying “flooding is likely to disrupt transport, close tourist attractions and may affect electricity and water supplies.” Thailand’s government has taken heat for sending conflicting messages about the dangers of the floods – at times declaring Bangkok would be safe and at others warning the city is in imminent danger. Already, Bangkok’s main tourist attraction, the Grand Palace, has begun to flood. Akiko Fujita notes some very strong pictures from the flood, courtesy of The Atlantic. The floods are forcing international companies to suspend operations. The Wall Street Journal reports Ford, Michelin and Toyota have suspended operations at some Thai plants. Then there are the crocodile catchers — working to chase down more than 100 of the reptiles believed to have escaped from crocodile farms during the floods. On the overall flooding, some strong photos posted on The Atlantic site.
ANOTHER TEEN PULLED FROM TURKEY QUAKE RUBBLE, AS SNOW BEGINS TO FALL
Rescuers pulled a 19-year-old from the rubble of a collapsed building four days after the earthquake struck eastern Turkey. That was the only good news from Eastern Turkey today, and conditions are worsening for many survivors, as rain and snow have begun to fall across the quake zone. Meantime, Turkish authorities announced the death toll has topped 500, with at least 523 confirmed dead.
LIBYA: GADHAFI’S DRIVER’S STORY
Alex MARQUARDT notes this item from the Guardian — another account of Gadhafi’s final days, this time from his driver of 30 years. “”Everything was exploding,” said Huneish Nasr, Gadhafi’s personal driver, recalling the moments before the deposed dictator was caught last week. “The revolutionaries were coming for us. He wasn’t scared, but he didn’t seem to know what to do. It was the only time I ever saw him like that.”… “He was strange,” said Nasr. “He was always standing still and looking to the west. I didn’t see fear in him.” Nasr said he threw his hands up in surrender as gun-toting rebels approached. He was knocked to the ground with a rifle butt, which blackened his left eye. Gaddafi was being pulled from a drainpipe just before Nasr fell. He caught a final glimpse of his master being swarmed over by rebels. Then blows rained down on them both. Now, a week later, Nasr and Mansour Dhao, the slain dictator’s security chief, seem to be the only surviving members of Gaddafi’s old guard who can bear testament to the frantic final days. “If any of the other close staff are still alive, I don’t know where they are or what happened to them,” said Nasr from his makeshift cell in a Misrata military barracks. The battle for Sirte had left him deaf in his right ear and he leaned forward anxiously to listen to questions. “The rest of them may be somewhere with the revolutionaries or they may be dead,” he said.
U.S. AID WORKER KIDNAPPED IN SOMALIA
The American woman reported kidnapped yesterday name has been confirmed by her employers as Jessica Buchanan, 32 years old. She was kidnapped with a Danish aid worker in Somalia.
SECRETARY OF DEFENSE PANETTA IN SOUTH KOREA TODAY
Secretary of Defense Panetta is in South Korea today to assure the country’s leaders of American support in the face of North Korean threats. He’s already met with his South Korean counterpart, Kim Kwan-jin and will later meet with President Lee Myung-bak and the foreign affairs minister. **CBS POOL.
A TRUE “SLUMDOG MILLIONAIRE”
As Candace SMITH spied yesterday, and the Independent reports this morning, a poor government clerk from eastern India has become the first person to win the jackpot on the Indian version of “Who Wants to be a Millionaire?” Sushil Kumar earned $120 a month before his star turn on the show. He plans to use his winnings to take a prep course for India’s civil service exam and to help build a library in his hometown.
GRAND PRIX RACEWAY — STARK CONTRAST TO INDIA POVERTY
The Los Angeles Times has an interesting read on the world’s newest Grand Prix racetrack, built in the midst of some traditional Indian squalor outside New Delhi. The track’s debut race is this Sunday, but the even the cheapest ticket ($55) is out of reach for many Indians. $55 is the equivalent of one month’s wages for most Indians.
KATE’S FIRST SOLO ENGAGEMENT
The Duchess of Cambridge has carried out her first official solo engagement. Because the Prince of Wales travelled to Saudi Arabia to pay his condolences following the death of the Crown Prince, Kate stood in for her father-in-law at a charity dinner last night.
CHARLES & VLAD THE IMPALER
Seems we’re all related to each other — but this is still an intriguing piece of family tree news today: As the AP writes: The truth is out: Prince Charles is related to Vlad the Impaler. The heir to the British throne says he is related to the cruel 15th-Century Romanian warlord who helped inspire Bram Stoker’s 1897 vampire novel “Dracula.” He makes the comments on an upcoming TV show to promote his interest in protecting the forests of Romania’s Transylvania region. Charles says genealogy shows that he is related to Vlad, giving him a stake in the future of Romania. The prince has long worked to conserve the forests and has bought a home in the region. On a visit to Romania earlier this year, he called Transylvania a national treasure because of its unspoiled landscape and centuries-old rural farming traditions.