Washington Learning to Say No

With just two months and change left in power, perhaps it's only natural that the White House is now resorting to tough love. The Bush administration on Tuesday sent two messages to homeowners and businesses looking for a handout: Many of you will be out of luck. Firstly, many struggling homeowners crippled under the weight of expensive subprime mortgages will likely not qualify to have their loans refinanced on the government's dime under a new plan by the Bush administration, the New York Times writes. The new initiative, introduced by government-run mortgage giants Fannie Mae and Freddie Mac yesterday and applying only to those mortgages the two have guaranteed, will lead to lower monthly payments for several hundred thousand homeowners—but only those who fall into the "not quite desperate" category. It falls well short of a comprehensive plan by FDIC Chairwoman Sheila C. Blair, who wanted to spend an additional $50 billion to refinance a considerably large swath of at-risk mortgages, even the most toxic of home loans, the NYT writes. The Washington Post writes this is very much a tough-love measure. "The new program is ... an acknowledgment that the industry's efforts to keep people in their homes have not kept up with growing foreclosure rates." While it's a Fannie Mae-Freddie Mac plan, other major lenders including, Citigroup, Wells Fargo, and Bank of America are expected to apply the same formula, the newspaper adds.

Struggling multinationals, you, too, are about to find it tougher to plead for aid. The Treasury Department is considering requiring that firms seeking future government assistance first raise private capital before coming to Uncle Sam for a handout, the Wall Street Journal writes, citing people in the know. The more stringent requirements would not be applied to the first $250 billion of the $700 billion financial rescue plan already spoken for. That money is already being pumped into banks. It's the next $450 billion in aid (if that's all it takes) that would contain such strings. But wait, there's more. The Treasury is also not going to venture into the dodgy debt-auction businesses, as was first thought, but will instead just keep pumping money into the financial sector, the newspaper adds. The measure is born out of necessity, the NYT points out. The Treasury has only about $60 billion in uncommitted funds to play with out of the first tranche—and that figure is going fast. "After one of the biggest lobbying free-for-alls in memory, it suddenly looks like a dwindling pool," the NYT writes.

It looks like American Express will be making a beeline for that dwindling pool. According to the WSJ, the credit card issuer, "hit by slowing consumer spending and rising defaults, is seeking roughly $3.5 billion in taxpayer-funded capital from the federal government." AmEx will qualify for a piece of the $700 billion TARP bailout plan after it won approval on Tuesday to become a bank holding company, Reuters reports. If only General Motors were so lucky. The carmaker revealed in company filings that its days are numbered unless it qualifies for federal aid. "Only an emergency federal bailout seemingly stands between G.M. and a bankruptcy filing," the NYT writes, citing industry analysts. How bad is it? Unless GM receives an imminent cash injection, it won't be able to run its global operations by January, the newspaper adds. General Motors is already pulling out of the Los Angeles auto show next month to save what it can, the Detroit Free Press points out. We could know Detroit's fate as soon as next week, when Democratic leaders in Congress will begin pushing for new legislation to use a portion of the $700 billion bailout kitty to keep the automobile sector alive, the WSJ writes.

In case there was any doubt, casino tycoon Sheldon Adelson is telling investors he's a betting man. The owner of the Las Vegas Sands Corp. on Tuesday revealed details of a $2.1 billion stock offering to avoid defaulting on mounting bank covenants, the WSJ reports. As part of the cash-raising deal, Adelson will put $525 million of his own money into play and reduce his stake significantly in order to build "a safety net to help guard his majority control and sell the idea to other investors," the newspaper writes. But already on Wednesday things were looking rough for the Sands overseas properties. The Singapore government said it would not bail out Adelson's project to build a casino, the Marina Bay Sands resort, on the island if the project runs into money problems, Singapore's Straits Times reports. The Sands' overseas casualties are mounting. On Tuesday, it said it would pull out of a construction project in the gambling haven of Macau, the BBC writes.

A little closer to home now, Chicago-based General Growth Properties, the No. 2 mall operator, warned on Tuesday that the "ongoing slump in retail sales, combined with the credit market lockdown, has pushed the company to the brink of bankruptcy," CNNMoney reports. The warning sent shares tumbling 66 percent on Tuesday. The mall operator manages more than 200 malls—including the Paramus Park Mall in New Jersey, Cumberland Mall in Atlanta, Water Tower Place in Chicago, and the Glendale Galleria in California—in 44 states, according to CNNMoney.

And finally, Google has introduced a new application to keep American doctors connected with countrywide data about the severity of the current cold and flu season. It's called Flu Trends. And, according to the WSJ, it can "show if the number of influenza cases is increasing in areas around the U.S., earlier than many existing methods" simply by crunching data on Google searches that contain telltale words like cough or fever. It's not entirely gimmicky. Google claims there is a strong correlation between these search terms and reports of influenza. Plus, Google built it with oversight from the Centers for Disease Control and Prevention.