Failure of mortgage giant could be isolated but probably isn't

Federal banking regulators sought to reassure the public Friday after seizing IndyMac Bancorp Inc., in what is being called the third-largest banking failure in U.S. history. The Pasadena, Calif.-based mortgage lender, which held as much as $8 billion in deposits, failed Friday after a crush of withdrawals from panicked depositors, according to the Reuters international news service. IndyMac specialized in mortgages to borrowers with limited resources and was especially vulnerable to the nationwide downturn in property values. The bank is expected to reopen Monday as IndyMac Federal Bank under the control of the Federal Deposit Insurance Corp., Reuters said. The director of the Office of Thrift Supervision, John Reich, blamed IndyMac's failure on recent comments by a powerful Democratic senator, even though the institution already was in distress. "This institution failed today due to a liquidity crisis," Reich said. "Although this institution was already in distress, I am troubled by any interference in the regulatory process." Sen. Charles Schumer questioned IndyMac's stability in June and blamed the OTS for lax regulation of the bank. That, of course, is most likely true considering the bank's unique financing scheme. But it also is highly likely that the collapse of IndyMac is a result of pressure on the economy from the mortgage crisis, which means more instability lies ahead. With the federal government ideologically opposed to taking concrete actions to fix the problems, more bank collapses are probably on the horizon.

Pentagon calls 'do-over' on air tanker contract

The downside of globalization was on display Wednesday when the U.S. Defense Department announced it had reopened the bidding for a disputed $35 billion contract to build air tankers for the Air Force, the Associated Press reported. The contract had been awarded to the team of Northrup Grumman Corp. and European Aeronautic Defence and Space Co., the parent of Airbus, over a competing bid by Boeing Corp., the incumbent. But the award set off a storm of protest from U.S. lawmakers, who wanted the contract awarded to U.S.-based Boeing -- apparently whether it offered the best bid or not. Boeing protested the award to its biggest competitor, and the U.S. Government Accountability Office decided last month that the original contract contained "significant errors" and should be rebid. The GAO said Boeing might have won the contract had it not been for the errors. Defense Secretary Robert Gates said his office, not the Air Force, would oversee the rebidding process. The contract is one of the largest ever awarded by the Air Force, and is the first of three similar deals expected to be worth more than $100 billion to replace some 600 refueling air tankers.

Climate changes at climate talks

The willingness of the world's richest industrialized nations to adopt greenhouse gas reduction targets has to be seen as a big improvement, even if the actual proposed cutbacks are not too large and not too fast. Hopefully, this is only the beginning. The agreement reached Tuesday by G-8 leaders to cut greenhouse gas emissions by half in the next 40 years. China, India and four other fast-growing nations, the source of much of the new pollution, are expected to join the talks Wednesday. While the agreement, which lacks some vital details, was praised by the richest nations, it was panned by environmentalists, who called it inadequate. But U.N. Secretary-General Ban Ki-moon said such an agreement was mandatory because time was running out for stopping global warming. Leaders must draft a new treaty to succeed the first phase of the Kyoto Protocol, which expires in 2012. The United States has refused to ratify Kyoto.

Britain backs Zimbabwe sanctions

Former colonial power Great Britain endorsed the United States' call for tougher sanctions on Zimbabwe following last month's re-election of Robert Mugabe in an election marred by violence and fraud. British Foreign Secretary David Miliband said Sunday that South Africa and other nations should join an international campaign to place restrictions on Zimbabwe in light of the Mugabe government's conduct during the campaign, according to the Associated Press. Miliband apparently singled out South Africa because its leader, Thabo Mbeki, has had the responsibility of mediating Zimbabwe's political crisis on behalf of a regional African agency. Zimbabwe opposition leader Morgan Tsvangirai, who withdrew from the balloting because of violence against his supporters, and complained to other countries after the first round of voting in March, accuses Mbeki of favoring Mugabe. International observers agreed the runoff was not fair. Tsvangirai won the March balloting with 48 percent of the vote, not enough to avoid a runoff, after a vote count that took five weeks. Sanctions proposed by the United States would require countries to freeze the assets of Mugabe and 11 Zimbabwe officials, and restrict their travel out of the country. "There has got to be a clear mix of diplomacy and sanctions," Miliband said, according to the AP. Mbeki made an unannounced visit to Zimbabwe yesterday to meet with Mugabe and Arthur Mutambara, leader in Tsvangirai's party, but not with Tsvangirai.

False alarm on China-Tibet talks

Word from the recent negotiations in Beijing is that China's offers to talk with the Dalai Lama appear to have been disingenuous. One of the envoys told the Reuters international news service Saturday that the Chinese negotiators showed "an absence of serious and sincere commitment" to resolving the long-simmering dispute between China and Tibet. Envoy Lodi Gyari said the Chinese negotiators wanted only to disparage the Dalai Lama, who fled Tibet when China took over in 1959 and has been in exile in India ever since, and did not discuss the welfare of Tibet or its people. "We were compelled to candidly convey to our counterparts that in the absence of serious and sincere commitment on their part, the continuation of the present dialogue process would serve no purpose," Gyari said. China agreed to convene the talks, the second meeting with the Dalai Lama's representatives since Chinese troops cracked down on protests in Tibet earlier this year, in response to international pressure concerning the 2008 Olympics, scheduled to begin next month in Beijing. Some Western leaders had threatened to boycott the opening ceremonies, but most have since said they will attend, including President Bush.

Security Council to vote next week on Zimbabwe sanctions

The United States said today it expects the U.N. Security Council to vote next week on new sanctions against the rulers of Zimbabwe, where longtime president Robert Mugabe was re-elected in a disputed election. U.S. Ambassador Zalmay Khalilzad said he submitted a formal proposal for asset freezes and travel bans on Mugabe and 11 members of his government, and for an embargo on arms sales to Zimbabwe, according to the Reuters international news service. "We expect a vote on the resolution sometime next week," Khalilzad said, according to Reuters. Mugabe was re-elected in a June 27 run-off after a campaign marked by violence against supporters of opposition leader Morgan Tsvangirai, who pulled out of the voting because of the attacks. Western nations have been pressuring Mugabe to negotiate, but the opposition Movement for Democratic Change has rejected calls for a unity government like the one installed in Kenya. Tsvangirai won the first round of voting in March. Security Council members South Africa, Russia and China are against sanctions, Reuters said. Russia and China are among the five nations with veto power on the 15-nation council.

Rebels on the ropes in Colombia

Today's rescue of 15 hostages held by leftist anti-government rebels in the jungles of Colombia could signal the beginning of the end for the 44-year-old insurgency. Former presidential candidate Ingrid Betancourt, who had been held kidnapped during the 2002 campaign and held for six years, and three U.S. military contractors who had been held for more than five years were among the rescued hostages, according to the Associated Press. Colombia's defense minister said the hostages were rescued without a fight when spies tricked the guerrillas from the Revolutionary Armed Forces of Colombia (FARC) into letting them go. Analysts regard the rescue as worst defeat ever in FARC's decades-long insurgency, which had recently seen many of its top commanders killed by government forces. The three Americans -- Marc Gonsalves, Thomas Howes and Keith Stansell -- who worked for a Northrup Grumman Corp. subsidiary under contract to the Pentagon -- were the longest-held American hostages in the world. FARC had long resisted efforts to free the hostages. Recent efforts included entreaties from Venezuela's anti-U.S. president, Hugo Chavez.