The Federal Reserve announced it is going to buy massive amounts of commercial paper in an effort to break through a credit crunch that has endangered the economy. ┬á In alliance with the Treasury Department, the Fed is planning to buy ÔÇ£commercial paper,ÔÇØ a way of borrowing money for short periods typically ranging from a day to less than a week, and a mechanism that many companies use to finance their day-to-day operations, such as purchasing supplies, finance payrolls, and other cash needs.

After Wells Fargo announced last week that it was set to buy Wachovia for $15.1 billion, Citigroup has now objected, demanding that it be called off, saying the new deal has breached its exclusive acquisition rights. ┬á The Wells Fargo deal had trumped an earlier government-backed rescue deal that Citigroup had proposed, in which it would buy WachoviaÔÇÖs banking operations for $2.2 billion. ┬á Wells offered to buy all of Wachovia for more money without government aid, to which Wachovia had decided not to honor its prior agreement with Citigroup.

Wells Fargo, the largest bank on the West Coast, agreed to buy Wachovia Corp. for $15.1 billion in stock, creating one of the worldÔÇÖs biggest banks and defeating Citigroup Inc.ÔÇÖs offer four days ago for part of the lenderÔÇÖs assets. ┬á Citigroup, the biggest bank in terms of assets by mid-year said late last month that it planned to buy WachoviaÔÇÖs operations for about $2.16 billion. The transaction had been supervised by the Federal Deposit Insurance Corp. and assisted by the government.

Automobile sales fell sharply in the United States last month, giving another sign that the problems in the financial sector are working their way through to the general economy.  ┬á All the major auto manufacturers saw sales fall in September compared with the same month a year earlier, with Nissan suffering a 37 percent decline. ┬á┬á Sales at Ford were down 34 percent over last September, while Chrysler was down 33 percent, Toyota 32 percent and Honda 24 percent.

BHP BillitonÔÇÖs bid for rival mining group Rio Tinto emerged from the shadows today as the Australian Competition and Consumer Commission said it would not oppose the bid on competition grounds.┬á "The proposed acquisition would not be likely to substantially lessen competition in any relevant market," said ACCC chairman Graeme Samuel in a statement.

All things shall pass, the saying goes, unless, perhaps, you are a Republican Congressman voting on the Emergency Economic Stabilization Act of 2008.  ┬á In a quite unexpected turnaround yesterday, the US House of Representatives rejected by 228 votes to 205 the $700 billion rescue package that the top brains from the Treasury, the Federal Reserve, the administration and both political parties had spent the latter half of last week and the whole weekend thrashing into a workable compromise.┬á┬á It was a shocking decision, in more ways than one.

Politicians have reached agreement on a $700 billion rescue plan for the US financial system which they hope will end the credit crunch.   ┬á Republican and Democratic leaders have both backed the deal, which allows the US Treasury to spend up to $700 billion to buy bad debts from ailing banks. ┬á┬á The bill must still be approved by both Houses of Congress, which President Bush has urged them to do.

Talks are set to resume in Washington DC this morning after a late night session yesterday ended without agreement on the governmentÔÇÖs $700 billion bailout plan for the troubled US finance sector.  ┬á A day that started with high hopes after President Bush told the nation that Congress had to approve the plan quickly to avoid a potentially ÔÇ£long and deep recessionÔÇØ ended at 10pm with Republicans in revolt.┬á┬á Legislators appeared close to an agreement earlier in the day, before senior members of Congress met the president at the White House, but the deal went sour

After bailing out the banking sector, the US government is now on the verge of offering loans of up to $25 billion to help US automobile manufacturers build greener vehicles.  ┬á The House of Representatives has already voted to back a spending bill that includes a low interest loan to auto makers, and the bill is expected to pass in the Senate this week. Its sponsors hope that President Bush will sign it off by 1 October, when the government begins its new financial year.