Cablegate: Tokyo Media Reaction - Global Economy

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STATE FOR I/RF, PA/PR/FPC/W, IIP/G/EA, EAP/PD, R/MR,
EAP/J, EAP/P, PM;
USTR FOR PUBLIC AFFAIRS OFFICE;
TREASURY FOR OASIA/IMI;
SECDEF FOR OASD/PA;
CP BUTLER OKINAWA FOR AREA FIELD OFFICE;
PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR

E.O. 12958: N/A
TAGS: OIIP KMDR KPAO JA
SUBJECT: TOKYO MEDIA REACTION - GLOBAL ECONOMY

1. LEAD STORIES: There were no papers published on
Tuesday morning due to a press holiday. Broadcasters
gave top play to the announcement on Monday by Lehman
Brothers that it has filed for bankruptcy protection.

2. "Avoiding Worst-Case Scenario for Global Economy"
The liberal Asahi editorialized (9/15): "...The
Department of the Treasury took control last week of
Fannie Mae and Freddie Mac, the two troubled housing
mortgage insurance firms. The move was one step short
of nationalization.... However, there is no end in
sight to the crisis in the U.S. financial system and
the deterioration of the global economy. On the
contrary, they are both likely to worsen. If the dollar
were to collapse due to the financial crisis and a
recession in the U.S., the damage to the global economy
would be immeasurable. As they look to prevent a worst-
case scenario while searching for a path toward
recovery, the U.S. and world economies will likely face
rough going in the days ahead."

SCHIEFFER

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