Today's News Update 23 October 2008

Update as of 0800 Eastern Time:

Bottom Line Up Front:
1. US / Iraq SOFA
2. Iran
3. Pakistan

From Fox News (US / Iraq SOFA):

The Bush administration on Wednesday warned of "real consequences" for Iraq if it rejects a newly negotiated security pact.

Without a deal, the United States could be forced to end its military operations.

The White House said Iraqi security forces are incapable of keeping the peace without U.S. troops, raising the specter of reversals in recent security and political gains if the proposed security deal is not approved by the time the current legal basis for U.S. military operations expires Dec. 31.

"There will be no legal basis for us to continue operating there without that," White House press secretary Dana Perino said. "And the Iraqis know that. And so, we're confident that they'll be able to recognize this. And if they don't, there will be real consequences, if Americans aren't able to operate there."

At the Pentagon, press secretary Geoff Morrell said the U.S. fallback position is to extend the U.N. Security Council mandate authorizing U.S.-led coalition operations in Iraq, but he emphasized that the Bush administration's preference is to complete a bilateral U.S.-Iraqi agreement.

From Fox News (Iran):

Iran's oil minister says OPEC should take 2 million barrels a day off the market when it meets Friday.

Gholam Hossein Nozari was speaking a day ahead of the meeting of ministers of the Organization of Petroleum Exporting Countries. The gathering appears set to agree on reducing output in an attempt to stem steep falls in oil prices, but still needs to decide on the size of the cut.

Just as Americans are finally beginning to reap the benefits of plunging gasoline prices — including more money in their pockets — the 13-nation gobal oil cartel is getting ready to squeeze them once again by cutting production and driving up prices to refineries.

Iran is a traditional OPEC hardliner on prices and production and is the second largest producer within the organization. In contrast, Saudi Arabia which leads OPEC production, is expected to act as the brakes on demands of deep cuts.

"The era of cheap oil is finished," Iran's Oil Minister Gholamhossein Nozari boasted earlier this week.

When asked what price Iran would want for its oil, Nozari declared, "The more the better."

From CNN (Pakistan):

Pakistan sought help from the International Monetary Fund on Wednesday to avoid defaulting on billions of dollars in loans and skirt a financial crisis brought on by high fuel prices, dwindling foreign investment and soaring militant violence.

Pakistani officials had previously said turning to the IMF would be a last resort.

Aid from the agency often comes with conditions such as cutting public spending that can affect programs for the poor, making it a politically tough choice for governments.

Dominique Strauss-Kahn, managing director of the fund, said in a statement that an IMF mission will begin discussions with Pakistani authorities in the next few days "on a program aimed at strengthening economic stability and enhancing confidence in the financial system. The amount of (IMF) financing under a stand-by arrangement has yet to be determined."

He said Pakistan has requested discussions with the IMF "to meet the balance of payments difficulties the country is experiencing as a result of high food and fuel prices and the global financial crisis."

Iceland, Hungary, Serbia and Ukraine have also turned to the IMF for financing to ease the current crisis.

Created in 1944 to rebuild the world financial system after World War II, the IMF initially helped developed nations lend to one another. By the 1990s, it had evolved into a rescue fund for troubled emerging economies -- but gave them little say on the terms of their loans.

Pakistani economists say up to $5 billion is needed to avoid defaulting on sovereign debt due for repayment next year, but that $8 billion more may be need overall.

More to follow:

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