Ukraine ruling coalition collapses

Ukraine's ruling coalition collapsed in the face of a political standoff over joining the NATO alliance.

President Viktor Yushchenko and Prime Minister Yulia Tymoshenko of the Orange coalition split over what approach should be taken in relations with Russia. The former favors a hard line confrontational stance while the latter wants diplomacy with Moscow, one of Ukraine's most important trading partners.

Yushchenko has accused Tymoshenko of collaborating with Moscow, and said the latter has been supporting a separatist movement in the Crimea.

Prime Minister of Ukraine Yulia Tymoshenko delivers a speech during a press conference on September 8 in Kiev. Ukraine's governing coalition collapsed on Tuesday in a crisis that threatens to knock the ex-Soviet country of 47 million people off its pro-Western course and back into Moscow's orbit.(AFP/File/Sergei Supinsky)

Wall Street Journal

Ukraine's Ruling Coalition Collapses Wall Street Journal - 1 hour ago By ANDREW OSBORN MOSCOW -- Ukraine's pro-Western coalition government formally collapsed, deepening a political crisis that has clouded the country's prospects of joining the NATO military alliance. Ukraine: Orange Coalition Falls New York Times Ukraine faces poll as coalition falls Financial Times

Fed to bailout AIG

After years of deregulation, the government will continue its policy of bailing out financial companies with an $85 billion Federal Reserve loan to American International Group, Inc. (AIG).

In return for the funds, the federal government will receive a 79.9% stake in the company.

The company with 1.1 trillion in assets and 74 million clients in 130 countries will still likely be liquidated eventually, but in gradual less chaotic fashion.

"[A] disorderly failure of AIG could add to already significant levels of financial market fragility and lead to substantially higher borrowing costs, reduced household wealth and materially weaker economic performance," the Fed said in a statement.

The move, however, did little to calm Wall Street with Dow down so far about 348 points.

CTV.ca

Fed in AIG rescue - $85B loan
CNNMoney.com - 56 minutes ago

Government response reaches dramatic new level: US will take 80% stake in nation's largest insurer to prevent global financial chaos.
Video: Government Bails Out AIG With $85 Billion Loan AssociatedPress
Treasury selling debt to help Fed Reuters