Economy (The Third Horseman)

WASHINGTON — Treasury Secretary Henry Paulson said Friday he will work through the weekend with financial officials and members of Congress to find a way to "remove troubled assets from our financial system." At a news conference, Paulson said troubled home loans "are now parked or frozen" on the books of financial institutions, preventing them from making new loans. He said the root cause of the financial crisis is "illiquid mortgage assets" that have lost their value and are clogging the financial system. About 5 million home loans are delinquent, Paulson said, with "irresponsible lending" and "irresponsible borrowing" at the root of the problem. The Treasury said it will tap the $50 billion Exchange Stabilization Fund to provide guarantees for money market mutual funds. The exchange fund was created in 1934, during the Depression, to provide support for the dollar. The Fed said it will expand its emergency lending efforts to allow commercial banks to finance purchases of asset-backed securities from money market funds. The central bank's move should help the funds meet demands for redemptions.

• JJ Commentary: The previous and proposed government bailouts only further our long march from a free-market economy to socialism, a key objective of the New World (Dis)Order folks. They help to manufacture crises and then institute more socialism in response – “controlled chaos” they call it.

USA TODAY — We've entered a period of tight credit — which could mean jobs lost, retirement plans pruned, college deferred and lifestyles diminished. Across the nation, Americans know that something's wrong. Nearly one-quarter of adults — 23% — believe the U.S. economy is in a depression, according to a USA TODAY/Gallup Poll taken Monday and Tuesday. That's nearly double the 12% who said so in February. At coffee shops and gas stations across the USA, people are wondering what the government has gotten them into as taxpayers with all the federal bailouts. "We just keep going deeper and deeper in debt," says Milton Hubbard, 58, a pastor in Chanute, Kan. "At some point, it is going to crash." Nearly 50% of the USA's 27 million small businesses say they've been "impacted by the credit crunch," according to a July survey by the National Small Business Association trade group. Predictably, many are postponing big purchases, not filling vacant jobs and cutting back on business travel and advertising. Spooked by the Wall Street meltdown, they're moving personal and business-related cash to safer, federally insured savings accounts and CDs.

VIENNA — After a brief respite, concerns over deepening turmoil in the U.S. financial system sent oil prices back above $100 a barrel Thursday. In addition, stepped-up attacks by Nigerian militants against the country's oil infrastructure helped to increase oil prices. In a fifth day of violence, Nigeria's main militant group said Wednesday that it had destroyed an oil-pumping station and a pipeline crossing southern Nigeria in a rare daylight attack. Parts of the USA are still running short of gasoline five days after Hurricane Ike knocked out 20% of the nation's refining capacity. The crunch is especially severe in the Southeast and Mid-Atlantic, which get their gas through pipelines from the Gulf region. It's largely hitting stations and convenience stores not affiliated with big brands such as ExxonMobil.

MOSCOW — Russia ordered its main stock exchanges closed for a second day Thursday as President Dmitry Medvedev said 500 billion rubles ($20 billion) will be poured 0into financial markets in an effort to stabilize them. The government is struggling to stem a dizzying plummet in share prices and restore confidence in the economy — trouble that has revived memories of the 1998 financial collapse. The financial regulator first suspended trading on Wednesday after the RTS, a leading index, fell 6.5%.

LONDON (AP) — Lloyds TSB on Thursday announced a $21.9 billion deal to take over struggling HBOS, Britain's biggest mortgage lender. The government said it would facilitate the deal by overriding anti-monopoly regulations. The takeover follows days of heavy selling pressure on HBOS shares, which closed Wednesday down 20% at $2.68, a fifth of their value at the start of the year. The combined companies will account for more than a quarter of the U.K. mortgage market and 400 billion pounds, or $715 billion, in savings deposits.

The Financial Times says central bankers are taking a coordinated approach to the recent upheaval in financial markets. "The package of up to $247 billion comes from the U.S. Federal Reserve, the European Central Bank, the Swiss National Bank, the Bank of England, the Bank of Canada and the Bank of Japan," CNN says. "The injection of cash, which amounts to an expansion of up to $180 billion in available funds, is an effort to fuel economic activity." The New York Times says the actions come at a "potentially dangerous new phase" in the crisis. "Some economists worry that a psychology of fear has gripped investors, not only in the United States but also in Europe and Asia," the paper says.