In yet another radical move, the U.S. Federal Reserve and the Treasury Department announced $800 billion in new financing Tuesday.
The first $600 billion, from the Fed, is going toward purchases of debt guaranteed by Fannie Mae, Freddie Mac, and other government-sponsored mortgage institutions.
With the second $200 billion, the Fed and the Treasury will provide support for securities related to credit-card debt, student loans, car loans, and small-business loans.
The news sent 30-year mortgage rates down to 5.5 percent, spurring a wave of refinancing.
"This is a win-win," Susan Wachter of the University of Pennsylvania's Wharton School told the Wall Street Journal. "It will directly increase demand for housing and help with the downward spiral in home prices."
According to the New York Times, however, "the program would do little to reduce the tidal wave of foreclosures" that is roiling the markets, because those foreclosures are mostly taking place among mortgages that aren't backed by Fannie Mae or Freddie Mac.
U.S. Presidential Transition
President-elect Barack Obama intends to keep Robert Gates as defense secretary, at least for now.
Former Fed Chairman Paul Volcker will likely be tapped to lead a new financial advisory panel.
Helene Cooper points out that the role of incoming Vice President Joe Biden remains largely undefined.
Sri Lanka's army expects to storm the headquarters of the Tamil Tigers soon.
Middle East and Africa
Iran announced the test launch of a new rocket, the "Kavosh 2."
Libya is sending an aid ship to break Israel's blockade of Gaza.
Palestinian security forces are having some effect in Hebron.
Europe's attempts at fiscal stimulus are widely seen as too small to be effective.
The people of Greenland voted overwhelmingly in favor of increased autonomy from Denmark.
Political analysts see Russia's joint naval exercises with Venezuela as a challenge to Obama.
The mayor of Vladikavkaz, North Ossetia, was killed by unknown gunmen.
Amid tensions, the Iraqi parliament is expected to vote on the troop agreement with the United States.
President-elect Obama holds his third press conference of the week. President Bush will be pardoning the Thanksgiving turkey.
Photo: KAREN BLEIER/AFP/Getty Images