WASHINGTON — The U.S. is destined to endure a new economic crisis that sticks taxpayers with the bill unless Congress tightens oversight of the financial industry, President Barack Obama said Saturday in his weekly radio and Internet address.
The overhaul is the next major piece of legislation that Obama wants to sign into law this year, but solid GOP opposition in the Senate is jeopardizing that goal.
A proposal that Senate Democrats are readying for debate creates a mechanism for liquidating large financial companies to avoid a meltdown.
For the first time, the government would regulate derivatives, those financial instruments whose value depends on an underlying asset, such as mortgages or stocks. Derivatives can help hedge risks but can produce steep losses, or huge profits, if the value of their underlying asset sinks.
The proposal also would create a council to detect threats to the financial system and set up a consumer protection agency to police people’s dealings with financial institutions.
Texas: LBJ’s youngest daughter hospitalized
Luci Baines Johnson, the youngest daughter of former President Lyndon B. Johnson, is being treated at the Mayo Clinic in Minnesota for what doctors suspect is a rare autoimmune disorder, Guillain-Barre syndrome, that affects the nervous system, her personal physician said Saturday. Initially, Johnson was admitted to a hospital in Austin on Wednesday after experiencing “extreme weakness” in her arms and legs, her doctor said. Johnson, 62, had a mild viral illness preceding this, a sore throat and hoarseness that probably was related because “in the vast majority of cases” the disorder follows a viral illness, her doctor said.
California: Road built to avoid sinkhole
Crews were building a new road after a massive sinkhole in Richmond cut off a neighborhood of more than 100 homes. The sinkhole swallowed up two parked cars when it opened Thursday evening. No one was in the cars. A fire official said the hole, estimated to be about 60 feet long, 40 feet wide and 20 feet deep, cut off vehicle access for people in the neighborhood.
Florida: Shuttle heads back to Earth
Discovery and its crew left the International Space Station on Saturday, space officials at Cape Canaveral said, with a return to Earth expected Monday morning. Discovery left behind nearly 8 tons of cargo and equipment, including a new tank full of ammonia coolant. The tank was successfully installed over the course of three spacewalks, but stiff bolts made the work more strenuous than anticipated.
Australia: ‘Black people’ typo leads to cookbook reprint
An Australian publisher is reprinting 7,000 cookbooks over a recipe for pasta with “salt and freshly ground black people.” Penguin Group Australia’s head of publishing, Bob Sessions, acknowledged the proofreader should have caught the “silly mistake.” The typo was in the “Pasta Bible” recipe for spelt tagliatelle with sardines and prosciutto.
Kyrgyzstan: U.S. base unjustified, new official says
A top official in Kyrgyzstan’s interim government said Saturday that a U.S. air base supporting operations in Afghanistan is “not justified,” the first sign of significant divisions over the facility. Since an uprising that culminated in the toppling of President Kurmanbek Bakiyev, the interim government’s leader has announced the Manas air base can remain open for a year after the lease expires in July. Azymbek Beknazarov, the acting prosecutor general, and others in the interim government charge the U.S. with ignoring their oppression when they opposed Bakiyev because it wanted to protect Manas.
Iran: Supreme leader calls U.S. nukes a tool of terror
Iran’s supreme leader told a nuclear disarmament conference in Tehran on Saturday that the United States’ atomic weapons are a tool of terror and intimidation. Ayatollah Ali Khamenei said America deceptively calls for nonproliferation while holding on to its own weapons and failing to confront Israel, which is widely believed to have nuclear bombs. Iran was not invited to President Barack Obama’s 47-nation summit in Washington last week to discuss nuclear security.
Sudan: Elections fail standards, monitors say
International monitors said Saturday that Sudan’s first multiparty elections in more than two decades failed to meet international standards. However, the observers did not call for a revote, and instead recommended that lessons drawn from the process be applied to next year’s crucial referendum on southern independence.
Another setback for the vote — which ended Thursday — came Saturday from a prominent opposition party, which said it would not recognize the election results, citing allegations of vote rigging by President Omar al-Bashir’s National Congress Party.
From Herald news services
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