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Ireland officially tumbles into recession

In the first half of 2008, Ireland’s economy suffered a 1% contraction, making it the first nation in the eurozone to officially be in recession since the credit crisis began. “As expected, lower levels of new house building had a major restraining influence on growth in the second quarter, as is evident from the very weak investment figures,” a government representative said. “Other factors at work include higher commodity prices, global financial market problems, weak demand in our major trading partners and adverse exchange rate movements.”

Talks on rescue plan stall with GOP dissent

Talks on the $700 billion rescue plan broke down when a bloc of GOP legislators broke ranks with the Bush administration. A plan by House Minority Leader John Boehner, R-Ohio, drew attacks from Democrats, who said he was working on behalf of Republican presidential nominee Sen. John McCain. The impasse came just hours after the White House announced an agreement had been reached on the fundamentals of the deal.

Academic economists oppose $700 billion rescue plan: 

Many economists disagree with the premise of a $700 billion Wall Street rescue plan being pushed by Treasury Secretary Henry Paulson and the Bush administration. About 200 academic economists have signed a petition opposing the plan. The economists say the proposal could create unintended incentives, that it is overly vague and that its long-run effects are not clear.

JPMorgan acquires Washington Mutual’s deposits

JPMorgan Chase (stock ticker: JPM) agreed to acquire Washington Mutual’s network of branches for $1.9 billion. The acquisition comes after WaMu was seized in the largest U.S. bank failure in history. JPMorgan will become the top U.S. bank by deposits as a result of the purchase.

Commodities could rally from worst drop in five decades

Barclays Capital predicted that commodities will rebound from their largest quarterly drop since at least 1956. Commodities prices have fallen since July, reversing a rally, but may see a rebound with demand for food and materials from India and China.

U.S. could learn from Mexico’s bailout mistakes

A Mexican bailout plan undertaken a decade ago may provide a blueprint for U.S. legislators working on a $700 billion rescue plan. The Mexican plan was fraught with problems and ended up costing taxpayers 20% of GDP. The mistakes were rooted in a lack of oversight, said Bernardo Gonzalez-Arechiga, who served as a commissioner for the bailout agency from 2002 to 2003.