Global markets rally again; broad overhaul of world financial system expected; North Korea to resume dismantling of its main nuclear reactor; Tentative agreement on Israeli coalition; and more

Top of the Agenda: Market Surge Continues

Global markets continued their sharp rally today (BBC)--after posting historic gains yesterday--as investors worldwide rallied on increased confidence that bank rescue plans in the United States and European Union would ease the credit crunch. Indices in Britain, France, and Germany all rose roughly 4 percent in early trading, while Japan's Nikkei index posted the single-largest one-day gains in its history, jumping 14 percent. The gains followed yesterday's banner day on Wall Street, in which the Dow Jones Industrial Average rose over 11 percent.

The new confidence follows the announcement of plans to shore up banks in Europe and the United States. European Union policymakers devised a coordinated plan (FT) valued at nearly $2.5 trillion, modeled on a similar plan unveiled last week by the British government. Meanwhile, the Wall Street Journal reports the U.S. government plans to buy preferred equity stakes in nine of the country's largest banks. The New York Times reports the deal, worth an estimated $250 billion, will likely be announced today.

Background:

• In a new interview with CFR.org, David Rubenstein, the founder and managing director of the private equity firm Carlyle Group, envisions a broad overhaul of the world's financial system before the crisis is over.

• A panel of experts continues debate on what the current turmoil will mean for the future of U.S. power in the new CFR Forum.

 

Pacific Rim: North Korea Inspections

North Korea announced it will resume the process (Telegraph) of dismantling its main nuclear reactor and will allow nuclear inspectors to return following an apparent breakthrough in talks with the United States.

CAMBODIA-THAILAND: The Bangkok Post reports Cambodia's president has ordered troops to the Thai border. It says he issued a threat to the Thai government to pull its forces back from the border or face conflict.

CHINA-RUSSIA: Chinese and Russian officials held a ceremony marking new boundaries (Xinhua) for a portion of the eastern border between the countries. China recently regained control of half of a territory called Heixiazi Island from Russia.

 

Elsewhere:

Syria to push for embassy in Beirut, normal ties with Lebanon.

Israel's Tzipi Livni forges tentative agreement with opposition Labor party.

This is an excerpt of the CFR.org Daily News Brief. The full version is available on CFR.org.