US AAA credit rating at risk; Japan to build 14 new power plants; Khmer Rouge war crimes tribunal nears end; Russian opposition leader released from prison; Iraq War claimed 500,000 Iraqi lives, study finds; and more
Top of the Agenda: Mixed Market Fallout on Debt Limit Impasse
Fitch Ratings said it put the U.S. AAA credit rating on watch for a potential downgrade because of the standoff over raising the country's debt limit (LAT). CME Group, an operator of financial exchanges, raised the collateral that investors must deposit to clear trades on routine assets like interest-rate swaps, a move that followed a similar decision by the Hong Kong bourse last week (Bloomberg). Yet Wall Street money managers are reportedly doubtful that the Treasury will run out of money on Thursday and instead see November 1 as the true debt deadline, a perception that could give Washington more time to reopen the government and raise the debt ceiling (Guardian).
Analysis
"The administration also needs to decide what it would do if the ceiling were not to be lifted in time—be it now, next month or at a later date. The least bad answer would be: keep borrowing. The president cannot state he would do so, before the fact. Indeed, he must deny it, since knowing this would lower his opponents' incentive to raise the ceiling. Yet, if it came to the worst, he would have to borrow," writes Martin Wolf in the Financial Times.
"The Beltway budget melodrama rolls on to its predictable and dreary end, with both sides now split over increasingly small differences. None of this is worth a partial government shutdown, much less the risk of a debt default, and both sides are looking like losers. Let's get it over with," the Wall Street Journal writes in an editorial.
"It made sense for other countries to embrace the dollar in an earlier era, when the United States was willing to act as guarantor of global stability. But today, with Republicans in Congress wielding default as a lever in a vain attempt to kill Obamacare, perhaps it is no surprise that the rest of the world is getting more serious about finding an alternative," writes Eduardo Porter in the New York Times.
PACIFIC RIM
Japan to Build 14 New Power Plants
Japan plans to complete twelve natural gas–fired power plants in 2014 and is on track to start up two new coal units this year as the country struggles to replace the capacity lost from the shutdown of nuclear reactors and curb its imports of expensive crude and fuel oil (Reuters).
CAMBODIA: Closing arguments began Wednesday in the UN-backed war crimes tribunal of Khmer Rouge leaders in Cambodia. A verdict is expected next year (AFP).
ELSEWHERE:
Russian opposition leader released from prison
Iraq War claimed 500,000 lives
This is an excerpt of the CFR.org Daily News Brief. The full version is available on CFR.org.