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Well, I am happy to be back, after my recent run in with hackers.  I have spent the last many hours compiling a truckload of financial news.  Holy cow.  There is really a lot to report out there in the business world.  

So, without further ado, in continuation of my credit-crisis archive series, aka macro-econ updates, I offer you the following word salad.  The below links are in mostly in the order I found them, rather than a better way that puts them according to how they make sense.  The sense will be made in a looking-back fashion, I reckon, since so little effort was taken to make sense looking forward.

To begin, I'm gonna drop in a link that's completely out of order, just to start with a little bit of forward-looking good news.

Street Cred: Goldman Sachs Buys Into Carbon-Credit Developer

Posted by Jeffrey Ball, October 27, 2008

Jonathan Shieber, of Dow Jones’ Clean Technology Insight, reports:

It looks like the financial wizards at Goldman Sachs are betting that the U.S. government is going to impose a cap-and-trade system for global-warming emissions sooner rather than later, despite the financial crisis shaking up the corridors of power from Wall Street to Washington.

Goldman is announcing today that it will partner with Salt Lake City-based carbon-offset project developer Blue Source LLC. The company, backed by big-time private equity investors First Reserve Corp. and Och Ziff Capital Management Group, sells carbon credits. Neither Goldman Sachs or Blue Source would comment on the size of the investment, other than to say that Goldman would receive a minority stake in the company.

:: :: ::

Political Capital - Who's to Blame edition

Henry Waxman: Alan Greenspan did not do what Congress asked him to do and tha's to regulate the predatory lending of mortgages.  When Mr Bernanke came in, he in fact did what needed to be done in that area...

:: :: ::

Companies start competing for bailout money

MARTIN CRUTSINGER | October 26, 2008

WASHINGTON — The bailout is now the hottest lobbying game in town.

Insurers, automakers and American subsidiaries of foreign banks all want the Treasury Department to cut them a piece of the largest government rescue in U.S. history.

The betting is that many with their hands out will be successful, especially with financial markets in a stomach-churning dive and predictions the economy is about to tumble into a deep recession.

These groups argue that the credit squeeze is so severe and the risks to the economy so dire that their industries need financial support as well.

The Treasury is considering requests from a variety of industries, but has not decided whether to expand the program, officials said Saturday.

Lobbying efforts are intensifying...

:: :: ::

Bankers, Brokers Fleeing Wall Street For Fresh Start

VALERIE BAUMAN | October 26, 2008

ALBANY, N.Y. — Bankers and brokers looking to escape the financial meltdown are scrambling to relocate their families, possessions and rarified talent far from Wall Street to places such as Florida, Chicago, Milwaukee, Virginia and Asia.

...

Corporate headhunters say Wall Street's malaise will lead to a permanent talent loss for New York. It could help small boutique firms become bigger players with employees they would never have been able to lure from the city long-regarded as the world's financial capital.

:: :: ::

Bush urges world markets to have patience

-- Johanna Neuman

So today in his weekly radio address, President Bush tried to calm fears about a global recession by defending the federal government's "bold action to stabilize our economy" with a $700-billion bailout. He cautioned against abandoning capitalism or experimenting with socialism.

   Open market policies have lifted standards of living and helped millions of people around the world escape the grip of poverty. These policies have shown themselves time and time again to be the surest path to creating jobs, increasing commerce and fostering progress. And this moment of global economic uncertainty would be precisely the wrong time to reject such proven methods for creating prosperity and hope.

Mostly, he urged patience. With world leaders meeting in Washington for an economic summit hosted by Bush on Nov. 15, the president said the government's muscular steps to buttress the market "are beginning to show results, but it will take time for their full impact to be felt."

:: :: ::

Roubini Says `Panic' May Force Market Shutdown

By Alexis Xydias and Camilla Hall

Oct. 23 (Bloomberg) -- Hundreds of hedge funds will fail and policy makers may need to shut financial markets for a week or more as the crisis forces investors to dump assets, New York University Professor Nouriel Roubini said.

``We've reached a situation of sheer panic,'' Roubini, who predicted the financial crisis in 2006, told a conference of hedge-fund managers in London today. ``There will be massive dumping of assets'' and ``hundreds of hedge funds are going to go bust,'' he said.

Group of Seven policy makers have stopped short of market suspensions to stem the crisis after the U.S. pledged on Oct. 14 to invest about $125 billion in nine banks and the Federal Reserve led a global coordinated move to cut interest rates on Oct. 8. Emmanuel Roman, co-chief executive officer at GLG Partners Inc., said today that as many as 30 percent of hedge funds will close.

``Systemic risk has become bigger and bigger,'' Roubini said at the Hedge 2008 conference. ``We're seeing the beginning of a run on a big chunk of the hedge funds,'' and ``don't be surprised if policy makers need to close down markets for a week or two in coming days,'' he said.

:: :: ::

Nouriel Roubini gives outlook on US and global economy during speech.

Despite the recent policy actions, unfortunately, I think things are gonna get much worse before they get any better..."

:: :: ::

Spending Stalls and Businesses Slash U.S. Jobs

By LOUIS UCHITELLE
Published: October 25, 2008

As the financial crisis crimps demand for American goods and services, the workers who produce them are losing their jobs by the tens of thousands.

Layoffs have arrived in force, like a wrenching second act in the unfolding crisis. In just the last two weeks, the list of companies announcing their intention to cut workers has read like a Who’s Who of corporate America...

:: :: ::

Bailout expanding to insurers
Treasury to take stakes in firms as distress spreads beyond banks

Staff writers Carol D. Leonnig, Lori Montgomery and Peter Whoriskey contributed to this report.

Yesterday, the Financial Services Roundtable, a trade association for the largest financial firms, sent a letter to the Treasury urging the government to consider investments in a broader range of companies, including broker dealers, automobile companies and foreign banks and insurance firms.

Yet progress on the Treasury program remains halting. The roughly 20 regional banks joining it would be added to nine of the largest American banks, including Bank of America, Citigroup and J.P. Morgan Chase, which were forced to accept $125 billion in funding last week. But the Treasury has yet to give federal money to any of the banks because of legal wrangling over the details of the investment agreements.

Assistant Treasury Secretary Neel Kashkari, the official responsible for the program, said in testimony before Congress this week that the next round of banks probably wouldn't get funding for "a few weeks."

Banks that accept government investments must agree in return to issue to the government shares of preferred stock, which pay annual interest of 5 percent, and warrants for shares of common stock, which allow the government to profit as the company's share price rises. Banks also must accept limits on executive compensation and cannot raise dividends without permission.

:: :: ::

Oil Options at $50 Soar After OPEC Cut Fails to Support Prices

By Alexander Kwiatkowski

Oct. 24 (Bloomberg) -- Oil options contracts to sell crude at $50 by December almost tripled today after an OPEC decision to slash production failed to allay concerns that the global economic slump is hurting demand.

The cost of the $50 December 2008 put option, which gives the holder the right to sell oil futures at $50 a barrel, rose as much as 142 percent to $1.50 on the New York Mercantile Exchange, compared with 62 cents yesterday, according to exchange data.

``It certainly seems to me that we could get down to $50 a barrel,'' Adam Sieminski, Deutsche Bank's chief energy economist, said in a Bloomberg Radio interview today. ``You could look at the OPEC cut as a sign of weakness, not strength.''

:: :: ::

Medvedev Hails U.S. Summit Plan

23 October 2008

Russia welcomed an announcement by U.S. President George W. Bush on Wednesday that he would host a summit to discuss the global financial crisis and reforms to prevent it from happening again.

Bush invited leaders of the G20, which includes the Group of Eight as well as key emerging-market countries like China, India and Brazil.

"Russia welcomes the U.S. decision to host the summit," Natalya Timakova, spokeswoman for President Dmitry Medvedev, said in comments confirmed by a Kremlin press office Wednesday.

:: :: ::

Russian default risk tops Iceland as crisis deepens
Russia's financial crisis is escalating with lightning speed as foreigners pull funds from the country and the debt markets start to price a serious risk of sovereign default.

By Ambrose Evans-Pritchard

:: :: ::

U.S. Imposes Sanctions on Russia, China for Supplies to Iran

By Greg Walters

Oct. 24 (Bloomberg) -- The U.S. government imposed sanctions on Russian, Chinese and Venezuelan companies for supplying what it said were materials used in making weapons of mass destruction to Iran, North Korea and Syria.

Companies including Russian state arms exporter Rosoboronexport and the China Shipbuilding & Offshore International Corp. were barred from entering into contracts with the U.S. government, according to a document posted on the Web site of the U.S. Federal Register and dated yesterday.

Sanctions against Rosoboronexport violate international law and will impact relations between Russia and the U.S., Russian Foreign Minister Sergei Lavrov said in remarks broadcast by state television.

:: :: ::

Sarkozy lays out radical state intervention
French president Nicolas Sarkozy has pledged "massive" state intervention to support his country's industry, defiantly ignoring EU competition rules in the biggest shift to dirigiste ideology in 40 years.

By Ambrose Evans-Pritchard

:: :: ::

German banks overexposed in Iceland
New figures confirm German banks were the most heavily exposed to Icelandic borrowers before the recent collapse of that nation's banking system.

Martin Morris

:: :: ::

Financial crisis: Alistair Darling suspected Icelandic banks were in trouble weeks before collapse
The Chancellor Alistair Darling suspected that Icelandic banks were in trouble weeks before their collapse, new documents show.

By Ben Leach

:: :: ::

 Russia feels chill winds of the global downturn
If America and the rest of the West is feeling a chill right now, then Russia is positively freezing.

By James Quinn

:: :: ::

Markets braced as Ukraine gets IMF bail-out
Markets are braced for another turbulent week as Ukraine added to growing fears about the world’s economic health after securing a $16.5bn (£10.4bn) emergency loan from the International Monetary Fund yesterday.

By Jamie Dunkley

:: :: ::

We now face Keynesian conditions and need truly Keynesian solutions
Are we all Keynesians now? Two weeks ago, I invoked the ghost of Keynes and there has recently been a flood of references to him, most especially from the Chancellor.

By Roger Bootle

:: :: ::

Brown’s Keynesianism is bankrupt – and will bankrupt us
Almost three months ago, this column described Prime Minister Gordon Brown, and his Chancellor Alistair Darling as "Keynesian". The last decade of Brownite policy, after all, has featured high public spending, irresponsible borrowing and an ever-growing tax-burden.

By Liam Halligan

:: :: ::

Europe on the brink of currency crisis meltdown
The crisis in Hungary recalls the heady days of the UK’s expulsion from the ERM.

By Ambrose Evans-Pritchard

:: :: ::

Germany's Steinbrueck says crisis far from over

(Reporting by Madeline Chambers, editing by Mark Trevelyan)

"We are still in a dangerous situation. I am not going to mislead anyone and say: we have got everything under control."

Asked how long the financial crisis would last, he said:

"The rescue package runs to the end of next year. We will certainly need it that long."

...

"There are landesbanks which are in turbulent waters. We have too many landesbanks and many of them do not have a convincing business model. We need consolidation among the eight landesbanks as has happened among the top institutions in the cooperative banking sector."

:: :: ::

IMF bailout of Iceland is delayed until fate of UK savers’ frozen cash is resolved

Gary Duncan, Economics Editor
October 24, 2008

Stalemate in talks between Iceland and Britain over the fate of the money from UK savers that is frozen in an Icelandic bank was being blamed last night for delaying a bailout of the stricken North Atlantic economy.

The International Monetary Fund is believed to be insisting that Reykjavik’s dispute with London over British savings held in Icesave, the UK offshoot of Iceland’s nationalised Landsbanki, is resolved before it will make a decision on the scale of emergency support for the tiny island nation.

The IMF’s governing executive board was meeting last night to debate a potential rescue package for Iceland, which could total $6 billion (£3.7 billion) and is likely to be backed by several Scandinavian central banks and the Bank of Japan. It would make Iceland the first Western country to receive an IMF loan since Britain went to the fund in 1976.

:: :: ::

I.M.F. Loan to Iceland Moves Ahead

By THE ASSOCIATED PRESS
Published: October 24, 2008

Iceland reached a tentative agreement on Friday with the International Monetary Fund for a $2 billion loan over two years after the country’s banking system collapsed in the global credit crisis.

The government said the deal, which is still subject to approval by the fund’s board in Washington, would also give Iceland immediate access to $830 million to head off a financial threat to its entire economy.

The country’s currency, the krona, has lost half its value since January, and banking transactions to and from Iceland have seized up, leaving its population of 320,000 virtually stranded.

:: :: ::

Iceland leaves British depositors out in the cold

Helen Power and Hildur Helga Sigurdardottir in Reykjavik
October 25, 2008

Geir Haarde, Iceland’s Prime Minister, said yesterday: "Our dealings with Britain over Icesave are not included in the talks. Those will be resolved on another level and we are at present not prepared to commit to British demands apart from those to which we are legally bound."

Iceland’s decision to go ahead without first securing a deal with the UK will come as a blow to the British Government, which has had to spend billions guaranteeing UK savings in Icelandic banks.

The Treasury has become embroiled in an increasingly bitter war of words. This week, Iceland released a transcript of a telephone conversation between Alistair Darling and Icelandic officials, showing that, contrary to Mr Darling’s claims on October 8, Iceland did not categorically refuse to compensate British savers.

:: :: ::

Germany Compiles List of Nazi-Era Jews and Their Fates

The study follows a 1986 compilation, revised in 2005, of the names of the 150,000 German Jews killed in the Holocaust. A greater number of German Jews managed to flee. The Nazis killed an estimated 6 million Jews in Europe.

The German Foundation for Remembrance, Responsibility and Future was founded in 2002 to organize compensation payments to forced laborers under the Nazi regime.

By the end of 2007, the foundation had disbursed 4.37 billion euros from German industries and the state to more than 1.5 million people in 98 countries.

This is a perfect segue to give a mention to the use of 'Godwin's law' in a joking way.  The reason so much of this comes back to WW2 tyrants etc, is that the settlements have only begun in the last few years.  Just because the war ended for most of us, doesn't mean it ended for all of us.  (I say this not as a Jew- I'm not.  I say this as a believer in justice.)

:: :: ::

In Beijing, World Leaders Pledge Broad Reform of Financial System

By Ariana Eunjung Cha
Washington Post Foreign Service
Sunday, October 26, 2008; Page A20

SHANGHAI, Oct. 25 -- Leaders from Asia and Europe on Saturday called for new rules for and stronger regulation of the global monetary and financial system at the close of a two-day summit in Beijing as China assumed a leadership role in the crisis.

Chinese Premier Wen Jiabao said the world's economic problems had become so massive that measures beyond the many multibillion-dollar bailout packages announced might be necessary to avert further damage.

"We are very glad to see that many countries have taken measures that have initially proved effective. But this is not enough given the current situation, and more needs to be done," Wen said Saturday, a day after dire corporate earnings reports from all over the world pushed Wall Street to a five-year low.

:: :: ::

So When Will Banks Give Loans?

By JOE NOCERA
Published: October 24, 2008

In point of fact, the dirty little secret of the banking industry is that it has no intention of using the money to make new loans. But this executive was the first insider who’s been indiscreet enough to say it within earshot of a journalist.

(He didn’t mean to, of course, but I obtained the call-in number and listened to a recording.)

"Twenty-five billion dollars is obviously going to help the folks who are struggling more than Chase," he began. "What we do think it will help us do is perhaps be a little bit more active on the acquisition side or opportunistic side for some banks who are still struggling. And I would not assume that we are done on the acquisition side just because of the Washington Mutual and Bear Stearns mergers. I think there are going to be some great opportunities for us to grow in this environment, and I think we have an opportunity to use that $25 billion in that way and obviously depending on whether recession turns into depression or what happens in the future, you know, we have that as a backstop."

:: :: ::

They’re Shocked, Shocked, About the Mess
By GRETCHEN MORGENSON
Published: October 24, 2008

MY hypocrisy meter konked out last week.

Like the boy who cried wolf, corporate and regulatory officials have issued a lot of hogwash over the years. Until recently, investors were willing to believe it. Now they may not be so easily gulled.

Companies, even those in cyclical businesses, routinely told investors that the reason they so regularly beat their earnings forecasts was honest hard work — and not cookie-jar accounting. They were believed.

Politicians proclaiming that the economy was strong and that the crisis would not spread kept our trust.

Brokerage firms insisting that auction-rate securities were as good as cash won over investors — and, as we all know now, that market froze up.

Wall Street dealmakers were fawned over like all-knowing superstars, their comings and goings celebrated. No one doubted them.

Banks engaging in anything-goes lending practices assured shareholders that safety and soundness was their mantra. They, too, got a pass.

Directors who didn’t begin to understand the operational complexities of the companies they were charged with overseeing told stockholders that they were vigilant fiduciaries. Investors suspended their disbelief.

And regulators, asserting that they were policing the markets, convinced investors that there was a level playing field.

Is it any surprise that virulent mistrust seems to own the markets now?

Gretchen Morgenson from a different NYTimes business podcast:

"This week we had an amazing couple of days of congressional testimony that really felt like we were kind of in the twilight zone."  

:: :: ::

Global Financial Troubles Reaching Into Gulf States

By DAVID JOLLY
Published: October 26, 2008

Major oil-producing countries had seemed to be insulated from the crisis shaking the foundations of the international financial system. Oil prices rose during the first half of 2008, giving such countries a thick cushion of cash. But a drastic drop in oil prices has left the gulf economies vulnerable. Many oil-rich governments became dependent on high prices.

After reaching a record of more than $147 a barrel in July, prices have collapsed. On Friday, oil futures settled in New York at $64.15 a barrel, falling $3.69 even after OPEC announced that it would reduce production by 1.5 million barrels a day.

"This shows the gulf countries are not immune to the overall problems in the financial system," Olivier Jakob, an oil analyst at Petromatrix in Zug, Switzerland, said during an interview Sunday. "If we get below $60 a barrel, some of these countries will suffer."

:: :: ::

 U.S. has plundered world wealth with dollar: China paper

(Reporting by Simon Rabinovitch; Editing by Ken Wills)

"The grim reality has led people, amidst the panic, to realize that the United States has used the U.S. dollar's hegemony to plunder the world's wealth," said the commentator, Shi Jianxun, a professor at Shanghai's Tongji University.

Shi, who has before been strident in his criticism of the U.S., said other countries had lost vast amounts of wealth because of the financial crisis, while Washington's sole concern had been protecting its own interests.

"The U.S. dollar is losing people's confidence. The world, acting democratically and lawfully through a global financial organization, urgently needs to change the international monetary system based on U.S. global economic leadership and U.S. dollar dominance," he wrote.

Shi suggested that all trade between Europe and Asia should be settled in euros, pounds, yen and yuan, though he did not explain how the Chinese currency could play such a role since it is not convertible on the capital account.

:: :: ::

World leaders pledge financial reform as gloom deepens

BEIJING (AFP) — World leaders have vowed to overhaul the global financial system in the face of recession fears, but US President George W. Bush urged nations to "recommit" to free markets despite economic turmoil.

China's Premier Wen Jiabao called for more regulation of the world's financial system , saying after the summit "we need to draw lessons from this crisis."

"We need financial innovation to serve the economy better, however we need even more financial regulation to ensure financial safety."

Wen confirmed China's participation in a crucial summit in the United States on November 15 aimed at tackling the financial meltdown, without specifying which Chinese leader would attend the meeting of 20 industrialised and emerging powers.

The economic turmoil has led to growing criticism of US-style free market capitalism, with French President Nicolas Sarkozy earlier this week saying "the ideology of the dictatorship of the market... is dead."

:: :: ::

China's stalling boom has globe worried

By Clifford Coonan

WHAT GOES up, must come down, a truism repeated more than once in the past few weeks in relation to the Chinese economy. Could the world's fastest expanding major economy, with its annual double-digit expansion fuelled by its voracious appetite for cars and consumer goods, come crashing down, triggering an economic tsunami on a devastating global scale?

There are fears that, as such a huge consumer of the world's natural resources and a potential market for goods and services from the developed world, a serious slowdown in China could cause a nightmare chain reaction around the world.

Last week, the government statistics office in Beijing dropped a bombshell - a long anticipated piece of bad news, but explosive all the same. Third quarter gross domestic product growth had fallen to 9 per cent, compared to 10.1 per cent in the second quarter and 10.6 per cent in the first.

:: :: ::

The Bet That Blew Up Wall Street
Steve Kroft On Credit Default Swaps And Their Central Role In The Unfolding Economic Crisis

Oct. 26, 2008

(CBS)  The world's financial system teetered on the edge again last week, and anyone with more than a passing interest in their shrinking 401(k) knows it's because of a global credit crisis. It began with the collapse of the U.S. housing market and has been magnified worldwide by what Warren Buffet once called "financial weapons of mass destruction."

They are called credit derivatives or credit default swaps, and 60 Minutes did a story on the multi-trillion dollar market three weeks ago. But there's a lot more to tell. [video included at link]

:: :: ::

Asia Money Rates Rise as Governments Struggle to Revive Lending

By Garfield Reynolds

Oct. 27 (Bloomberg) -- Asian money-market rates rose amid speculation the global credit crisis is worsening even after governments and central banks pledged to spend trillions of dollars worldwide to revive lending.

:: :: ::

G-7 Warns on Yen's Gain; Japan Ready to Take Action (Update2)

By Keiko Ujikane and Jason Clenfield

Oct. 27 (Bloomberg) -- The Group of Seven industrialized nations expressed concern about ``excessive gains'' by the yen after Japan's currency soared to a 13-year high against the dollar.

The G-7 made an unscheduled statement after a request from Japan, Finance Minister Shoichi Nakagawa said, adding that his government was ready to act if needed. The G-7 fell short of pledging concerted action to halt the yen's advance. Separately, Prime Minister Taro Aso said he'd draft measures to help counter the financial crisis.

:: :: ::

`Out of Control' CEOs Spurned Davos Warnings on Risk (Update1)

By A. Craig Copetas

Oct. 24 (Bloomberg) -- Once upon a time, the World Economic Forum was the ultimate Wall Street jamboree.

Now, in the riptide of the worst financial crisis since the Great Depression, WEF officials and delegates say many of the chief executive officers who gathered in Davos, Switzerland, over the last five years didn't listen to warnings from their peers. Davos organizers also say they failed to play tough with the financial-industry bosses, opting to accept their funding and let them turn Davos into a rave-up for Wall Street excesses.

``The partying crept in,'' says Klaus Schwab, the 70-year- old WEF founder and executive chairman. ``We let it get out of control, and attention was taken away from the speed and complexity of how the world's challenges built up.''

:: :: ::

`Biggest Bubble of Them All' Is Globalization: Chart of the Day

By Michael Patterson

Oct. 24 (Bloomberg) -- The 90 percent tumble in the global benchmark for commodity shipping costs since May exceeded the Dow Jones Industrial Average's plunge during the Great Depression, signaling globalization is ``the biggest bubble of them all,'' Bespoke Investment Group LLC said.

:: :: ::

Surin Says Asia May Finalize Reserves Fund in December

We are going to face this together.

:: :: ::

Auslin Says Asia `Proactive' in Backing EU's Reform Plan

... Obviously Korea is experiencing a major meltdown now and that has worried China and Japan significantly.

:: :: ::

Farm-Credit Squeeze May Cut Crops, Spur Food Crisis (Update1)

By Carlos Caminada, Shruti Singh and Jeff Wilson

Oct. 27 (Bloomberg) -- The credit crunch is compounding a profit squeeze for farmers that may curb global harvests and worsen a food crisis for developing countries.

Global production of wheat, the most-consumed food crop, may drop 4.4 percent next year, said Dan Basse, president of AgResource Co. in Chicago, who has advised farmers, food companies and investors for 29 years. Harvests of corn and soybeans also are likely to fall, Basse said.

:: :: ::

Emerging-Market Stocks, Currencies Drop; Hungary's BUX Slides

By Laura Cochrane

Oct. 27 (Bloomberg) -- Emerging-market stocks tumbled for a fifth day as concern deepened that the global economy will fall into a recession and Ukraine became the latest country to receive help from the International Monetary Fund.

Equity indexes in India, China and the Philippines tumbled more than 6 percent, while Indonesia's rupiah fell 4.4 percent versus the dollar, leading developing nations' currencies lower. Hungary's BUX Index slid 11 percent after the IMF said it will lend Ukraine $16.5 billion and give Hungary ``a substantial financing package'' as the turmoil in global credit markets and recession concerns sweep across eastern Europe.

Investors are selling emerging-market stocks, currencies and bonds as the rout that began with the collapse of U.S. subprime mortgages last year pushes the world toward a recession and lowers the price of commodities that sustain developing economies. The Bank of Korea slashed interest rates by a record today as the nation faces its biggest crisis since requiring an IMF bailout a decade ago.

``The risks associated with emerging markets are quite high,'' said Winson Fong...

:: :: ::

Ukraine Gets $16.5 Billion Loan From IMF; Hungary Next in Line

By Daryna Krasnolutska and John Martens

Oct. 27 (Bloomberg) -- The International Monetary Fund will lend Ukraine $16.5 billion and give Hungary ``a substantial financing package'' as the turmoil in global credit markets and recession concerns sweep across eastern Europe's emerging markets.

The 24-month Ukrainian loan is conditional on parliamentary approval of legislation to support the country's banks, the Washington-based lender said yesterday in a statement. The Hungarian deal was reached in cooperation with European Union.

:: :: ::

Chavez Ambitions in Venezuela, Abroad May Shrink With Oil Price

By Matthew Walter and Steven Bodzin

Oct. 27 (Bloomberg) -- The same tumbling oil prices that led OPEC to slash output last week threaten to send Venezuela's economy into a tailspin, and put an end to President Hugo Chavez's ambitions to expand his socialist revolution at home and abroad.

To cope with plummeting oil revenue, the source of half the government's spending, Chavez may have to cut domestic handouts and foreign aid. The first items likely to go will be arms purchases from Russia, oil subsidies for Cuba, and job- creating local projects such as bridges and subways, economists say.

``You have a country with an oil boom, that doesn't know how to save, doesn't know how to set up productive industries that generate jobs, and goes into debt,'' said Elsa Cardozo, a professor of political science and international relations at the Universidad Central de Venezuela. ``Then oil prices fall and the party ends.''

:: :: ::

Evil Wall Street Exports Boomed With `Fools' Born to Buy Debt

By Mark Pittman

Oct. 27 (Bloomberg) -- Tom Bosh lowered the telephone receiver into its cradle, making a decision on the way down. ``We're not buying any more,'' he told his traders at Bank of New York Co. ``Nothing.''

It was May 2007, and Bosh, who managed $25 billion from the bank's 13th-floor trading room above Times Square, had just hung up on Ralph Cioffi at Bear Stearns Cos. a dozen blocks away. Bosh had invested $50 million in notes from an issuer Cioffi controlled, and he was ready to pull the plug.

``I had a bad feeling,'' Bosh, 45, recalled. ``Cioffi was just bulldogging everyone. He was saying, `These assets are good, the collateral is paying down, and I know more than you.' That type of attitude.''

Bosh's premonition, a month before two of Cioffi's funds blew up, struck a death knell for structured finance, the system Wall Street banks devised to fuel more than two decades of unprecedented borrowing. The system allowed financial companies to lend beyond their capacity and outside the reach of regulators -- until it crashed this year.

:: :: ::

Ocampo says 'speed limit' on securitization was violated.

Interesting format - seems like a hybrid home movie of the architects of securitization.

:: :: ::

FBI Probe of JPMorgan Fees Focuses on Swaps Roiling Muni Debt

By William Selway and Martin Z. Braun

Oct. 27 (Bloomberg) -- Joseph Ambrosini says the deal looked so easy. JPMorgan Chase & Co. bankers told him there was really no risk. All he had to do was sign a public financing contract, and the bank would give $280,000 to his school district in New Castle, Pennsylvania.

``They basically said, unless the world goes under the sea, we'd be in good shape,'' says Ambrosini, the district's business manager.

In September, Ambrosini says, his 3,400-student district went underwater. On Sept. 25, the week after Lehman Brothers Holdings Inc. collapsed, the New Castle Area School District's interest rate on $9.7 million of financing arranged by JPMorgan hit 10.6 percent, more than doubling since the month began, as investors demanded skyrocketing returns for municipal debt.

:: :: ::

European markets slump after sell-off in Asia
AP: Nikkei index hits a 26-year low as financial crisis raises recession fear

LONDON - European stock markets fell heavily Monday after the Nikkei index in Japan closed at its lowest in 26 years as the financial crisis raised recession fears and drove up the yen, piling the pressure on the country’s exporters.

...

"Worries about the impact of the surging yen on Japanese export earnings have hit the Nikkei hard," said Julian Jessop, chief international economist at Capital Economics.

:: :: ::

‘Panic’ in U.S. Futures Rattles Investors Worldwide (Update2)

By Eric Martin and Lynn Thomasson

Oct. 27 (Bloomberg) -- U.S. stock-index futures are becoming less reliable as predictors of market moves.

With equity investors around the world contending with the worst drop since the Great Depression, futures on the Standard & Poor’s 500 Index misstated gains or losses by an average 1.4 percentage point in October, twice the gap in the third quarter, data compiled by Bloomberg show. One of the biggest misses was Oct. 24, when futures fell as much as 60 points, while the index itself dropped 37 points in the first half hour of trading, before closing down 31.

The pre-market readings may be adding to volatility during a month poised to be the worst in the 38-year history of MSCI Inc.’s index for developed countries, investors said. While fundamental concerns about the health of the global economy and solvency of banks are weighing on investors, the false cues are adding to uncertainty, said Arthur Cashin, director of floor operations for UBS Financial Services at the New York Stock Exchange.

"It’s a state of permanent anxiety, because you don’t know where things are going to go," said Cashin, a member of the NYSE for 44 years. "People are scrambling to try to stay up with it, so far unsuccessfully."

:: :: ::

Medvedev Will Visit G20 Summit

Moscow Times

27 October 2008  President Dmitry Medvedev will take part in a Nov. 15 summit in the United States on the global financial crisis, spokeswoman Natalya Timakova said Friday.

Medvedev received an invitation from U.S. President George W. Bush to attend the meeting of leaders from the so-called Group of 20 industrialized and developing nations, Timakova said in comments on the web site of Vesti-24.

"We must actively participate in working out new rules of the game in the world economy," Medvedev said Thursday in a video message posted on the Kremlin web site. "Russia intends to advance its ideas actively," he said.

:: :: ::

Russia draws up plans to revamp world finances
Sun Oct 26, 2008
(Writing by Dmitry Solovyov; editing by Andrew Roche)

MOSCOW, Oct 26 (Reuters) - Russia has drawn up its own proposals to restructure the world financial system, which President Dmitry Medvedev will present at a global summit on the financial crisis next month, a senior official said on Sunday.

U.S. President George W. Bush will host the summit on Nov. 15 in Washington to discuss the causes of the crisis and the principles by which financial regulators and institutions should be reformed.

Shuvalov did not reveal details, but reiterated Russia's general stance: "The currently existing world financial system is inadequate to the conditions in which we live. In the Russian Federation, our leadership has been constantly talking about this in recent years."

Shuvalov said Russia had no plans to isolate itself from the rest of the world during the crisis, stressing that it was part of the global economy. If the world economy declined, Russia's growth would be short-lived, he added.

:: :: ::
Russia teams with China and India to tackle crisis

27.10.2008 - RBC

Russia will consult India and China on measures to combat the global financial crisis, Russian Foreign Minister Sergei Lavrov told reporters today.

"Russia will certainly coordinate its steps with the world’s leading emerging economies," he stressed, pointing out Moscow’s strong ties with India, China and Brazil.

The finance minister of the G20 group of rich and developing nations will gather next month in Sao Paulo, Brazil. Russian and Chinese finance ministers are also scheduled to meet there, according to Lavrov.

"Despite the emergence of new centers of economic growth and financial power, as well as their rising political influence, it is only through joint efforts that we can solve the current crisis and prevent such things from happening in the future," he asserted.

:: :: ::

Iceland says IMF cash not enough

HELSINKI, Oct 27 (Reuters) - Iceland said on Monday that International Monetary Fund (IMF) cash would not be enough to stabilise its ailing economy as it prepared for talks on the financial crisis with its Nordic neighbours.

:: :: ::

Updates will continue in comments.

Originally posted to FundaMental Transformation on Mon Oct 27, 2008 at 10:47 AM PDT.

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Comment Preferences

  •  Brain cell replenishment jar. (7+ / 0-)

    Ok, wishful thinking... tips for a very uncreative diary.

  •  Wow! I'm exhausted just reading the snippets (2+ / 0-)
  •  Your opinion(s)/input would be appreciated (1+ / 0-)
    Recommended by:
    FundaMental Transformation

    If you have some spare time, would you kindly review my diary article called

    Sufficiency Capitalism

    I arrived at this theory/philosophy while starting/operating several small businesses simultaneously from 1980-1991.  The diary is an overview.  I would like to develop more depth, as I truly believe this can heal our planet in so many ways.  However, Sufficiency Capitalism requires input from many people like yourself.

    Thank you one way or the others.  

    Sincerely
    War On Error

    Here's the link:

    http://www.dailykos.com/...

    •  I like it. It's exactly what we need. (0+ / 0-)

      I must admit, I sped read, so I might not have absorbed every detail.  But from what I read, it seems right on.

      The only thing, I would say is - the title will never catch on with your normal business person-type.  'Sufficiency' is a nightmare for those who consider themselves exceptional, and therefore worthy of more than their fair share.

      So, what I use is 'humanitarian capitalism'.  But, my brain is only backfiring now, so I can't add mush more at this point.  (lolz 4 freudian type-o) - I will keep my eyes open for your future diaries. Thanks for sharing.

  •  Greenpeace: China's coal use cost it $248 billion (0+ / 0-)

    The Associated Press  October 27, 2008, 12:00PM ET  

    By HENRY SANDERSON FROM BUSINESSWEEK

    BEIJING

    China's reliance on cheap coal to fuel its economy cost a hidden $248 billion last year through damage to the environment, strain on the health care system and manipulation of the commodity's price, according to a report released Monday by Greenpeace.

  •  G7 sounds yen alarm; (0+ / 0-)

    More U.S. banks turn to Treasury
    Mon Oct 27, 2008 2:52pm EDT

    By Emily Kaiser

    WASHINGTON (Reuters) - More U.S. banks lined up for government cash and the Group of Seven expressed concern the soaring Japanese yen posed a threat to financial and economic stability as recession worries spread worldwide.

    Volatility has surged across financial markets as investors are forced to sell assets -- often bought with borrowed money -- to repay creditors or cover margin calls as asset prices fall and credit limits are breached.

    The upheaval has most recently hit currency markets.

    A brief G7 statement focused on the yen, fanning speculation the Bank of Japan would intervene in currency markets for the first time in four years.

    "We are concerned about the recent excessive volatility in the exchange rate of the yen and its possible adverse implications for economic and financial stability," said the group, comprising the United States, Japan, Germ

  •  Securities Industry Still Has $20B Bonus Budget (0+ / 0-)

    Broken Securities Industry Still Has $20 Billion to Pay Bonuses

    By Christine Harper and Serena Saitto

    Oct. 27 (Bloomberg) ...

    The worst financial crisis since the Great Depression ... won't deter Wall Street from offering year-end rewards to employees on top of their salaries, compensation experts say.

    ``Critical producers and critical managers will be retained with the same bonus they had last year,'' said Robert Sloan, head of U.S. financial-services recruiting at Egon Zehnder International...

  •  Deutsche Bank Derivatives Loss > $400M (0+ / 0-)

    Deutsche Bank Derivatives Loss May Top $400 Million (Update2)

    By Jacqueline Simmons and Jonathan Keehner

    Oct. 27 (Bloomberg) -- Deutsche Bank AG, Germany's biggest bank, lost more than $400 million on equity derivatives trades as stock markets headed for their biggest rout since the 1930s, two people with direct knowledge of the matter said.

    The loss, equal to almost half of the Frankfurt-based company's second-quarter revenue from equity sales and trading, is a black eye for Richard Carson, global head of equity derivatives, and may signal more job losses at the bank.

    ``Everybody assumed most of the job cuts would be in fixed income, but when you incur a loss of more than $400 million in equity derivatives that might warrant cuts across asset classes as well as fixed income,'' said Bahadour Moussa, who specializes in derivatives recruitment at London-based Pelham International.

  •  Ackerman says 'beyond our grimmest fear' (0+ / 0-)

    Deutsche Bank AG (DB) Chief Executive Josef Ackermann:

    Ackerman says grim expectation has been exceeded. [video]

  •  Roubini predicts stag-deflation in the next 6 mos (0+ / 0-)

    Roubini Sees `Significant Downside Risk' for Equities

    Roubini predicts stag-deflation in the next 6 months:  Global inflation is going to go below zero, gonna become negative.

    Unfortunately we are at the beginning of a long, protracted [global] recession.  This is just the beginning...  Now there is massive contagion to emerging economies; and conditions in the financial markets, rather than improving, actually are really worsening.

    There was a moment after the G7 meeting, during the IMF meetings, there was hope that they actually - the G7 and the Europeans too, could calm markets.  But that lasted just one day...

    Since then it's been an onslight of lousy news... and markets have been falling day after day after day.  We are in a situation right now of near panic. It is literally a situation in which there is deleveraging, there is liquidation, there is capitulation.  It is getting really messy.  It is becoming a situation in which markets are becoming disfunctional and unhinged.  It's really scary what is happening right now.

    I don't expect it's gonna be a 'global depression', like we had in the Great Depression...  I'm still of the view we are gonna have a protacted, only two year, recession...  

  •  Congress Weighs Forming Special Panel... (0+ / 0-)

    ... for Overhaul of Financial Regulations
    By BRODY MULLINS and ELIZABETH WILLIAMSON * OCTOBER 27, 2008

    WASHINGTON -- Congressional leaders are considering whether to create a special bipartisan panel to draft legislation to overhaul financial-services regulations next year.

    The hope is that a single committee, possibly comprising senior lawmakers from the House and Senate, could help cut through the turf wars that often come with industry overhauls. Having a separate group of staffers also could help relieve the pressure on existing financial-committee staffers, some of whom have had to put on the back burner less-pressing responsibilities in order to deal with the financial crisis.

  •  What's Ayn Rand got to do with it? (0+ / 0-)

    In his startling admission, the former head of the Federal Reserve reveals that his long-held and controversial notion that enlightened self-interest alone would prevent bankers, mortgage brokers, investment bankers and others from gaming the system for their own personal financial benefit has, as the English say, come a cropper.

    Bankers ruled by anything other than greed?

    Where did Greenspan ever get that idea?

    Ayn Rand.

    Greenspan Shrugged? Did Ayn Rand Cause Our Financial Crisis?
    By Deborah Jones Barrow, Editor-in-Chief, wowOwow

  •  The Old Order Falls (0+ / 0-)

    Max Fraad Wolff
    Posted October 27, 2008 | 12:29 PM (EST)

    Unquestioned faith in the old order produces shock and panic as one pillar after another crumbles and falls. So it is with cursedly interesting times. The borrowing by investors, financial firms, and households must be reduced. Losses and forces sales beget losses and forced sales. Oil, food commodities, stocks, homes are being driven down in price. Vast oceans of money are injected by global policy makers, central banks and lenders. Banks and creditors are lending much, much less. Thus, the oceans of money added are not enough to replace the purchasing power lost by shrinking credit. This is the deleveraging of households, banks and financial firms.

  •  60 Minutes follows the CDS story- (0+ / 0-)

    Financial weapons of mass destruction:

  •  Putin to rescue Deripaska over $2.5bn loan (0+ / 0-)

    Oligarch at heart of Tory funding row gains Kremlin support in repaying banks that backed Norilsk stake

    By Mark Leftly
    Sunday, 26 October 2008

    Independent.co.uk Web

    Russian Prime Minister Vladimir Putin will bail out Oleg Deripaska, the oligarch at the centre of the "yachtgate" affair, with a $2.5bn (£1.6bn) loan refinancing this week.

    Mr Deripaska has until the end of the month to find the money to repay the syndicate of 13 banks, including Royal Bank of Scotland and Merrill Lynch, that provided a loan so that he could take a 25 per cent stake in mining giant Norilsk Nickel.

    •  Russia Tosses Life Preserver to One of Its ... (0+ / 0-)

      Russia Tosses Life Preserver to One of Its Richest Men
      By DANA CIMILLUCA, ALAN CULLISON and GREGORY L. WHITE
      (subscription required)

      The Kremlin is stepping in to bail out one of the country's richest men, in what could be the first move in a shakeout among the powerful businessmen known as oligarchs, whose holdings are spread throughout the Russian and world economies.

      People close to the situation said that on Tuesday Russia allowed Alfa Group, a conglomerate controlled by businessman Mikhail Fridman, to tap its $50 billion rescue fund to pay back a $2 billion loan to a group of banks led by Deutsche Bank AG. The funding allowed Mr. Fridman to avoid having to give up his 44% stake in ...

      •  $50 Billion Bailout in Russia Favors the Rich (0+ / 0-)

        A $50 Billion Bailout in Russia Favors the Rich and Connected

        By ANDREW E. KRAMER
        Published: October 30, 2008

        MOSCOW — Companies belonging to two of Russia’s richest men are among the first recipients of a $50 billion bailout program. The project, like so much else here, is opaque in its details but has resulted in some of the nation’s oil windfall being funneled to well-connected Kremlin insiders.

        Under the plan being put in motion this week, money is channeled through the state development bank Vneshekonombank, known as VEB, whose chairman is Russia’s prime minister, Vladimir V. Putin. The stated goal is to help Russian industrialists refinance loans to Western banks, with aid flowing quickest to those companies at risk of having assets seized as collateral by foreign owners.

        Critics charge that the bailout is another example of the cronyism here and a lack of transparency.

  •  Gulf Bank Customers Withdraw Deposits After Losse (0+ / 0-)

    (Updtate1)

    By Fiona MacDonald and Arif Sharif

    Oct. 27 (Bloomberg) -- Gulf Bank KSC, Kuwait's second-biggest lender by assets, is trying to stem a surge in customer withdrawals after currency losses forced the central bank to guarantee deposits.

    In the first signs of a bank run in the Persian Gulf, some Gulf Bank depositors panicked and demanded their money, Fawzy al- Thunayan, general manager for board affairs, said in an interview today from Kuwait. ``We can't blame them,'' he said. Trading in the Kuwait City-based bank was suspended for a second day.

    While the Persian Gulf had been mostly insulated from the global credit crunch until now, Kuwait is the third state there to prop up its banking system as the end of the oil boom weighs on the region's currency, stock and real estate markets. The United Arab Emirates said Oct. 12 it would guarantee deposits of all local banks and large foreign banks, and Saudi Arabia put $2.67 billion into the government-run Saudi Credit Bank, based in Riyadh, to provide no-fee loans to low-income citizens.

    ``The fear factor is now seeing its way into the Middle,'' said Haissam Arabi, who oversees $1.8 billion as managing director of asset management at Shuaa Capital PSC in Dubai. ``The ripple effect of the credit crunch has spread to the Middle East because we're no longer an island economy.''

  •  Roubini Says U.S. Needs $400 B Stimulus Pack (0+ / 0-)

    Roubini Says U.S. Needs $400 Billion Stimulus Package

    Includes Arthur Levitt, Al hunt and Nouriel Roubini

    [Seems really loooong, I haven't heard it all yet]

  •  Lagarde Says Intervention Would Be `Purely Japane (0+ / 0-)

    Lagarde Says Intervention Would Be `Purely Japanese,' Not G-7

    By Sandrine Rastello and Simon Kennedy

    Oct. 28 (Bloomberg) -- French Finance Minister Christine Lagarde said Japanese authorities may sell the yen for the first time since 2004 after the currency surged to its strongest in almost 13 years.

    Speaking hours after the Group of Seven nations warned against the yen's ``excessive volatility,'' Lagarde foreshadowed a ``purely Japanese'' intervention to weaken it, saying in an interview that the G-7 had no plans to help.

    That leaves investors testing Japan's resolve as the yen's advance threatens to erode the earnings of exporters such as Canon Inc. and pushes stocks to a 26-year low.

    ``Lagarde has weakened the force of the G-7's statement,'' said Chris Turner, head of foreign-exchange strategy at ING Groep NV in London. ``It still suggests the Japanese wanted permission to intervene so it provides some approval for going ahead with unilateral action.''

  •  North Korea intimidates with public executions (0+ / 0-)

    By EDITH M. LEDERER – 3 days ago

    UNITED NATIONS (AP) — North Korea is using public executions to intimidate its citizens and has imposed restrictions on long distance calls to block the spread of news about rising food shortages, the U.N. investigator on human rights in the reclusive nation said Thursday.

    [Vitit] Muntarbhorn cited the "great disparity" in the access to food by the country's elite and the rest of the population...

    His remarks coincided with a warning from the head of the U.N. food agency in North Korea that millions face a food crisis. Jean-Pierre de Margerie, the World Food Program's country director, said some areas in the northeast are facing "a humanitarian emergency" and about 2.7 million people on the west coast will also run out of food in October.

    Muntarbhorn said there is a "very, very serious problem this year with food," and WFP is assisting some 6.5 million people.

    •   N Korean facade can't hide signs of hunger (0+ / 0-)

      North Korean facade of self-sufficiency can't hide signs of hunger
      [I apologize for the h8 advertisement on that link.  It's LATimes, I'm surprised they would be so h8ful.]

      By Barbara Demick
      November 2, 2008

      In the countryside, listless adults and children wander about. Many in the isolated nation try to work the fields, but lack fertilizer and equipment.

      Reporting from Nampo, North Korea -- Along the sides of the road, people comb through the grass looking for edible weeds. In the center of town, a boy about 9 years old wears a tattered army jacket hanging below his knees. He has no shoes.

      Sprawled on the lawn outside a bathhouse, poorly dressed people lie on the grass, either with no better place to go or no energy to do so at 10 a.m. on a weekday.

      Despite efforts to keep North Korea's extreme poverty out of view, a glance around the countryside shows a population in distress. At the root of the problem is a chronic food shortage, the result of inflation, strained relations with neighboring countries and flooding in previous years.

  •  Groundhog Day II: The Nightmare Continues (0+ / 0-)

    By VITO J. RACANELLI  

    Recession jitters bring total rout to U.K. and continental bourses.

    THE MARKET'S CRASH HAS CAST investors in a hell-ish sequel to Groundhog Day, the 1993 film in which Bill Murray's arrogant weatherman protagonist finds himself stuck in a time loop, reliving banal and boring Groundhog Day festivities. Day after day, stock prices get bashed, and like Phil Connors -- Murray's character -- investors have no idea how to get out of this awful cycle of pain.

    Last week, the Dow Jones Stoxx index of 600 European companies closed at 197.82, down a whopping 7.2% from the previous Friday's level. No sector was spared, as food and beverage stocks slipped 2%, and auto shares plunged 28%. Stocks are 51% below their all-time highs.
    [euro]

    "We saw forced selling, which can have some staying power as liquidations lead to lower prices that then trigger further liquidations," says Matthias Joerss, a strategist at broker Sal. Oppenheim in Frankfurt. More bad news is likely to come from corporate earnings, as well as from the macroeconomic side, he adds.

    Friday, the proximate cause was a bevy of such bad news, including seriously recessionary country data, as well as continued third-quarter earnings disappointments. Data on purchasing manager indexes from the United Kingdom, France and Germany published Friday showed that Europe's economy is slowing more quickly than investors had expected, and the fastest since Sept. 11, 2001.

    What will it take to break out of this bear chain?

  •  Ukraine Gets an IMF Bailout (0+ / 0-)

    The IMF has agreed to lend Ukraine $16.5 billion, helping the country to avert a run on its banks and its currency, the hryvnia

    By Jason Bush
    Europe

      * Ukraine Gets an IMF Bailout
       *

    The victims of the global financial crisis just seem to be getting bigger and bigger. First it was financial institutions, then came entire countries. After Iceland, the latest domino to wobble is Ukraine, which on Oct. 26 reached an agreement with the International Monetary Fund for a $16.5 billion bailout.

    Ukraine desperately needs the money to stave off a run on its banks and currency. With ordinary depositors rushing to withdraw their cash, one major Ukrainian bank has already been nationalized, while a second has been bailed out by the government. Meanwhile, the Ukrainian currency, the hryvnia, has fallen sharply. "People are still worrying about the currency, and continuing to convert their savings into U.S. dollars," Olena Bilan, an economist at Dragon Capital brokerage in Kiev.

  •  Intervention Warning Stokes Volatility (0+ / 0-)

    Intervention Warning Stokes Volatility, Fundamentals Usher In Recession
    (Forex Video)
    Monday October 27, 5:59 pm ET
    By John Kicklighter, Currency Strategist strategist@dailyfx.com

    House prices down 9.1%

  •  Hungary's currency firms, stock market drops 10% (0+ / 0-)

    Hungary's currency firms as IMF bailout seen near
    Monday October 27, 10:03 am ET
    By Pablo Gorondi, Associated Press Writer
    Hungary's currency firms, stock market drops 10 percent as IMF says bailout package is near

    BUDAPEST, Hungary (AP) -- Hungary's currency strengthened Monday after the International Monetary Fund said the country is close to receiving a financial bailout package for its troubled economy.

    Hungarian markets had been closed since Thursday for a national holiday, a day after the National Bank of Hungary raised its key interest rate by 3 percentage points, to an annual 11.5 percent from 8.5 percent in an effort to support the forint.

    The forint lost 30 to 40 percent of its value against the euro and the U.S. dollar in the past weeks as the global financial crisis reached Hungary, making investors look to safer waters.

  •  First batch of bailout money moving soon (0+ / 0-)

    First batch of bailout money for banks moving soon

    MARTIN CRUTSINGER | October 27, 2008 10:17 PM EST | AP

    WASHINGTON — The government prepared Monday to move the first batch of bailout money to banks as fretful world markets plunged again. Wall Street ended with a big drop at the closing bell, sending the Dow Jones industrials to their lowest close since the financial meltdown began.

    The Treasury Department said it would start moving $125 billion to nine major banks this week by buying ownership stakes, the first big transfer since the $700 billion bailout package was passed early this month.

  •   Cost of crash: $2,800,000,000,000 (0+ / 0-)

    Cost of crash: $2,800,000,000,000
    • Bank of England calls for reform
    • Markets jittery after Asian losses
    • Brown defends borrowing

       * Larry Elliott, Phillip Inman and Nicholas Watt
       * The Guardian,
       * Tuesday October 28 2008

    Autumn's market mayhem has left the world's financial institutions nursing losses of $2.8tn [$2.8T], the Bank of England said today, as it called for fundamental reform of the global banking system to prevent a repeat of turmoil "arguably" unprecedented since the outbreak of the first world war.

    In its half-yearly health check of the City, the Bank said tougher regulation and constraints on lending would be needed as policymakers sought to learn lessons from the mistakes that have led to a systemic crisis unfolding over the past 15 months.

    The Bank's Financial Stability Report, which will be sent to every bank director in Britain, more than doubled the previous estimate of the potential losses faced by all financial institutions since the spring, but said that given time the actual losses could be pared by between a third and a half.

  •  Fears grow of a domino effect of struggling natio (0+ / 0-)

    From the Baltic to Turkey, fears grow of a domino effect of struggling nations
    • Eastern Europe feels the chill
    • Hungary and Ukraine seek billions in IMF loans
    • Falling oil prices raise fears for Russian economy

       * David Gow in Brussels
       * The Guardian,
       * Tuesday October 28 2008
       * Article history

    The spectre of a cascade of failing economies from the Baltic to Turkey was raised yesterday as a $16.5bn IMF bailout for Ukraine was mired in political infighting and Hungary sought its own $10bn rescue package.

    A showdown in Kiev between Ukraine's president and prime minister threatened to torpedo the emergency loan deal secured by the beleaguered ex-communist country. With Hungary putting the finishing touches to its rescue package analysts predicted that the growing crisis could force even oil-rich Russia to seek help from the IMF and EU.

    Turkey, in political crisis and financial meltdown, began talks with IMF officials on a second loan package within the past decade. Belarus and Serbia also turned to the fund for help.

    Iceland, already bailed out with a $2bn loan but facing a 10% decline in national output, indicated it would need a further $4bn as it turned to its Nordic neighbours, Norway and Sweden, for aid. With global financial turmoil sweeping central and eastern Europe, experts pointed to a likely wave of falling dominos as countries living way beyond their means succumbed to frozen global credit.

  •   Market turmoil: What the analysts say: (0+ / 0-)

       * guardian.co.uk,
       * Monday October 27 2008 14.30 GMT
       * Article history

    Analysts believe that today's heavy falls on stockmarkets around the world show there is little confidence that the corporate sector will deliver the profits that investors had been expecting.

  •  Socialism? Spreading the wealth? (0+ / 0-)

    Can't have that, now can we?

  •  IMF firepower could soon run short (0+ / 0-)

    IMF firepower could soon run short

    By Alan Beattie in Washington

    Published: October 27 2008 18:57 | Last updated: October 27 2008 18:57

    With its $2bn (£1.3bn, €1.6bn) rescue loan to Iceland and $16.5bn to Ukraine, the International Monetary Fund has started to dip into an arsenal that is full to the brim. Yet the IMF could soon run short of firepower.

    In spite of the period of relative peace in recent years among emerging markets, the private armies of global finance have grown much faster than the fund’s store of ammunition.

  •  GM, Chrysler request $10B in aid (0+ / 0-)

    GM, Chrysler request $10 billion in aid: sources
    Mon Oct 27, 2008 10:56pm EDT

    By Jui Chakravorty Das and Kevin Krolicki

    NEW YORK/DETROIT (Reuters) - General Motors Corp and Cerberus Capital Management have asked the U.S. government for roughly $10 billion in an unprecedented rescue package to support a merger between GM and Chrysler LLC, two sources with direct knowledge of the talks said on Monday.

    The government funding would include roughly $3 billion in exchange for preferred stock in the merged automaker, according to one of the sources, who was not authorized to discuss the matter publicly.

    The U.S. Treasury Department is considering a request for direct aid to facilitate the merger and a decision could come this week, sources familiar with the still-developing government response said earlier on Monday.

    •  Treasury working on aid for GM, Chrysler merger (0+ / 0-)

      Treasury working on aid for GM, Chrysler merger
      Mon Oct 27, 2008 10:22pm EDT

      By Karey Wutkowski

      The Treasury Department is weighing aid of at least $5 billion, which could include capital injections and government purchases of bad auto loans, according to the source, a financial policy executive who spoke anonymously because the discussions are private.

      Emergency financing, at least initially, most likely would be focused on GM and Chrysler and not Ford Motor Co, which is struggling but still better off financially than its U.S. rivals, the source said.

      A Treasury decision could come this week, the source said.

      Separately, the Wall Street Journal reported the Energy Department is working to release $5 billion in loans to GM to help it finance the merger. The money, according to the report citing a person familiar with the matter, would come from $25 billion in financing approved by Congress last month to help domestic manufacturers make more fuel efficient cars.

      •  U.S. rejects GM's call for help in a merger (0+ / 0-)

        U.S. rejects GM's call for help in a merger
        By Bill Vlasic and Micheline Maynard
        Published: November 3, 2008

        DETROIT: The Treasury Department has turned down a request by General Motors for up to $10 billion to help finance the automaker's possible merger with Chrysler, according to people close to the discussions.

        Instead of providing new assistance, the Treasury Department told GM on Friday, the Bush administration will now shift its focus to speeding up the $25 billion loan program for fuel-efficient vehicles approved by Congress in September and administered by the Energy Department.

        Treasury officials were said to be reluctant to broaden the $700 billion financial rescue program to include industrial companies or to play a part in a GM-Chrysler merger that could cost tens of thousands of jobs.

  •  Merkel, Brown to Discuss World Economy in London (0+ / 0-)

    Merkel, Brown to Discuss World Economy in London(Update1)

    By Gonzalo Vina and Mark Deen

    Oct. 27 (Bloomberg) -- German Chancellor Angela Merkel and U.K. Prime Minister Gordon Brown will discuss ways of shoring up the global economy when they meet in London this week, Brown's office said.

    The meeting, scheduled for Oct. 30, will include discussions to prepare for talks on global banking regulation in Washington next month.

  •  Ukraine's IMF Loan Endangered by Feud (0+ / 0-)

    Ukraine's IMF Loan Endangered by Feud

    By Philip P. Pan
    Washington Post Foreign Service
    Tuesday, October 28, 2008; Page A12

    MOSCOW, Oct. 27 -- Ukraine's feuding president and prime minister welcomed a proposed emergency bailout by the International Monetary Fund on Monday, but a fresh round of finger-pointing by their aides left it unclear whether the two could agree on legislation needed to win the $16.5 billion loan.

    As Ukraine's currency fell to a historic low and its critical steel industry urged global action to stop a devastating slide in prices, Prime Minister Yulia Tymoshenko scheduled a vote on the legislation for Tuesday and called on the nation's fractured political leadership to unite in the face of "global financial Armageddon."

    But the outcome of the vote was uncertain Monday night, as each camp accused the other of trying to use the economic crisis to get its way in an extended political standoff over whether the country should hold early parliamentary elections.

    •  Ukraine assembly puts off IMF vote again (0+ / 0-)

      UDPATE 1-Ukraine assembly puts off IMF vote again
      Thu Oct 30, 2008 12:33pm EDT

      (Adds parliament putting off debate on IMF measures)

      KIEV, Oct 30 (Reuters) - Ukraine's parliament on Thursday put off final approval of financial legislation needed to secure a $16.5 billion IMF loan, pending further consultations.

      ...

      He later acknowledged that disagreements had persisted and debate on the package to stabilise Ukraine's financial position and banking system was postponed until Friday.

      There was no fresh attempt to blockade proceedings as had occurred for more than a week in a row over an early election.

      The chamber gave initial backing to the package on its first reading on Wednesday, urged on by leaders saying the credits depended on quick approval of measures required by the IMF.

  •  Fed Begins Buying Short-Term Debt (0+ / 0-)

    Program Aims to Revive Market for Commercial Paper

    By Thomas Heath
    Washington Post Staff Writer
    Tuesday, October 28, 2008; Page D05

    The Federal Reserve yesterday began buying short-term debt from banks and companies as a way to make it easier for corporate America to borrow cash to cover day-to-day operations.

    The demand for commercial paper had dried up following last month's bankruptcy of Lehman Brothers, putting additional pressure on corporations that were already wheezing from an economic slowdown.

    The government's intervention in the credit markets showed some signs of helping to thaw the market for commercial paper. Some analysts said traditional short-term lenders including money-market funds, pensions and wealthy investors appeared to be getting more comfortable lending to the most creditworthy corporations.
    ad_icon

    "For at least investment-grade industrials, the bottom line is that things have gotten cheap enough that there are beginning to be buyers," said T.J. Marta, fixed-income strategist at RBC Capital Markets. "Our corporate traders said the market has been loosening up over the past week."

    •  Fed Spurs Record Surge in Longer-Term Commercial (0+ / 0-)

      Fed Spurs Record Surge in Longer-Term Commercial Paper Issuance

      By Bryan Keogh

      Oct. 28 (Bloomberg) -- Sales of longer-term commercial paper soared 10-fold after the Federal Reserve began buying the corporate IOUs, a sign that the central bank's efforts to unlock the market may be working.

      Companies yesterday sold more than 1,500 issues totaling a record $67.1 billion of the debt due in more than 80 days, compared with a daily average of 340 issues valued at $6.7 billion last week, according to data published by the Fed. Most of the difference was probably absorbed by the Fed, said Adolfo Laurenti, a senior economist at Mesirow Financial Inc.

      ``That's the very first really good news in quite some time,'' said Laurenti, who is based in Chicago. ``It's probably something the government can do and the normal investor would not otherwise do.''

  •  Corporate bond rates keep rising, portend default (0+ / 0-)

    Corporate bond rates keep rising, portend defaults

    By MADLEN READ
    The Associated Press
    Tuesday, October 28, 2008; 1:36 PM

    NEW YORK -- The recent decline in bank-to-bank lending rates is having no effect on corporate bonds, which continue to plunge in value _ a sign that the market believes more loan defaults and a wave of bankruptcies are ahead for U.S. companies.

    ...

    About half of rated U.S. companies are noninvestment grade, according to Standard & Poor's.

    Junk bonds simply aren't being issued right now, but their rates in the market for existing bonds determine how much companies would have to pay if they needed to issue them to raise cash. If these rates keep rising, the cost of financing through the corporate bond market will become cost-prohibitive for many companies _ compounding the problems that the economy is dealing them.

  •  Consumer confidence plunges to lowest on record (0+ / 0-)

    Consumer confidence plunges to lowest on record
    By CHRISTOPHER S. RUGABER
    The Associated Press
    Tuesday, October 28, 2008; 11:58 AM

    WASHINGTON -- Layoffs, plunging home prices and tumbling investments have pushed consumer pessimism to record levels in October, a private research group said Tuesday. Wall Street shook it off, though, focusing instead on higher global markets amid optimism the Federal Reserve will ease interest rates further.

    The Conference Board said the consumer confidence index fell to 38, down from a revised 61.4 in September and significantly below analysts' expectations of 52.

    That's the lowest level for the index since the Conference Board began tracking consumer sentiment in 1967, and the third-steepest drop. A year ago, the index stood at 95.2.

  •   Central Banks Slashing Rates As Investors Flee (0+ / 0-)

    By Anthony Faiola and Neil Irwin
    Washington Post Staff Writers
    Tuesday, October 28, 2008; Page A01

    Central Banks Slashing Rates As Investors Flee
    Global Pullback Could Affect Currency Markets

    Central banks around the world are moving to further slash interest rates as they seek to contain the damage from the bursting of the biggest credit bubble in history.
    This Story

    The Federal Reserve is poised to cut its benchmark rate for the second time in two weeks at a pivotal meeting in Washington on Wednesday, and the European Central Bank yesterday suggested that it would do the same next week. South Korea announced a dramatic rate cut yesterday, by three-fourths of a percentage point.

    Governments worldwide have already approved massive bailouts and stimulus packages to halt financial meltdowns. But the trouble spots in the United States and abroad continue to multiply.

  •  Downturn Clobbers Public Pension Funds (0+ / 0-)

    By Peter Whoriskey
    Washington Post Staff Writer
    Tuesday, October 28, 2008; Page D01

    The market downturn is ravaging public pension funds across the United States, with many state and local governments seeing more than 20 percent of their retirement pools swept away in the turmoil.

    Even before the financial crisis, many large pension funds already were considered to be inadequately funded, according to the Government Accountability Office. The losses could force some states and local governments to ask taxpayers to pay more into the funds or to demand more contributions from the police, teachers and other government employees whom the benefits cover.

    Public pension funds dropped 14.8 percent in value for the year ended Sept. 30, according to Northern Trust, an investment company. The funds, which typically have most of their money in stocks, have probably dropped far more than that because the markets have dropped 20 percent more since then.

  •   Treasury's Ryan Says Financing Needs Are `Unprec (0+ / 0-)

    Treasury's Ryan Says Financing Needs Are `Unprecedented' (at sifma conference)

    Discusses the current market conditions and the EESA - Emergency economic stabilization act.

  •  GMAC Unit Ends Auto Loans in Seven Countries (0+ / 0-)

    GMAC Unit Ends Auto Loans in Seven European Countries (Update1)
    By Ari Levy

    Oct. 28 (Bloomberg) -- GMAC LLC, the money losing home-loan and auto finance lender, will halt new vehicle loans through its financial services unit in seven European countries as global credit markets deteriorate.

    The company will stop originating loans in the Czech Republic, Finland, Greece, Norway, Portugal, Slovak Republic and Spain, Detroit-based GMAC said today in statement.

    In those countries and in Hungary and Denmark, GMAC will ``assess the implications of this challenging environment with the aim of diversifying funding sources for dealers over time,'' the company said.

  •  Mishkin Sees `Significant' Odds... (0+ / 0-)

    Rick Mishkin Sees `Significant' Odds Inflation May Go Too Low

    Kathleen Hays

    This shock has been massive.  this shock, in many ways is actually worse than the shock that hit us during the great depression.  It's much more pervasive, it's more complicated, and more difficult to clean up.  The good news is that in contrast to what happened during the Great Depression, when the central bank, particularly due to some political infighting, didn't do the right thing, this Federal reserve has been extremely aggressive in terms of providing liquidity to the system to deal with the shocks.

    The shock during the G.D. was really two shocks.  One that people normally talk about, but economists realize is not the major shock.  The first shock of course was the stock market crash in 1929.  Actually the major markets held up pretty well.  But after that there was a period of bad luck, the collapse of farming as a result of the 'dust bowl' led to the failures of banks out in farm areas, which spread to the money centers in towards the end of 1930.  

    That was a classic banking crisis shock.  Actually the NY Fed took steps that were appropriate to deal with it but was then overruled at the time.   And that led to disasterous policies that put us into a permanently bad situation.

    So the shock there was somewhat more straightforward.   But on the other hand, people just didn't know what the right thing to do was.  Here, we have a very different environment with a lot more understanding of what kinds of things cause initial financial disruptions to lead to depressions.  And very active steps have been taken against that.

    This was actually something that the Fed Reserve started doing very early on.  The crisis started to hit in August of '07, the Fed Res. was taking very active steps to provide liquidity to the system in order to prevent from happening something along the lines that caused the Great Depression.    

    continues...

  •  Lehman Toxic Debt Advice Led to Ruin (0+ / 0-)

    Lehman Toxic Debt Advice Led Leipzig Bank to Ruin Via Dublin

    By Aaron Kirchfeld and Jacqueline Simmons

    Oct. 28 (Bloomberg) -- Teachers at the Clara Zetkin Middle School in Freiberg, Germany, were counting on a budget surplus to ease staff shortages across the state of Saxony.

    Those hopes have faded as a result of bets made by state- owned Landesbank Sachsen Girozentrale on structured investments backed by mortgages in the U.S. The German lender loaded up on asset-backed securities and derivatives manufactured and sold by Wall Street amounting to more than 27 times the bank's equity. Now Saxony, which pledged taxpayer money as a guarantee against losses, is on the hook for 2.8 billion euros ($3.5 billion).

    ``They gambled away money needed for Saxony's teachers,'' said Wolfgang Renner, 55, who teaches math and physics at the 106-year-old yellow-brick school in Freiberg, named for a former Communist Party leader.

    It doesn't take a degree in mathematics to calculate the potential damage in nearby Leipzig, where Sachsen is based and where Gottfried Wilhelm von Leibniz, the 17th-century polymath who invented calculus, was born. Plans to replace thousands of retiring teachers and build new roads are now in jeopardy.

    ``As Saxony politicians, we pray every day that the guarantee won't be used,'' said Mario Pecher, a lawmaker in Dresden, the state capital flattened by Allied bombing in World War II. ``There's a Damocles sword hanging over our heads.''

  •  Futures Lose Clarity, Place Fed in Dark (0+ / 0-)

    Futures Lose Clarity, Place Fed in Dark on Reaction (Update2)

    By Scott Lanman

    Oct. 28 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke and his colleagues usually sit down for their interest- rate meetings with a clear idea of what investors think they'll do. Not this time.

    One key indicator, futures contracts, no longer provides an accurate signal of where the Fed will set its benchmark interest- rate target. The problem: Traders look at the rates banks charge each other for overnight loans when figuring out their bets on what the Fed will do, and for the last six weeks the Fed has failed to get those overnight rates to line up with its target.

    The disconnect means Fed policy makers will find it harder to gauge whether markets will stabilize after the interest-rate decision they make at a two-day meeting that started today. Futures trading suggests a better than one-in-three chance that Fed policy makers will cut the target by three-quarters of a percentage point, to 0.75 percent. By contrast, only one of 69 economists in a Bloomberg survey foresees that outcome.

    Bernanke and his colleagues are ``going to be less confident about the response to their policy action because they don't know what is already priced into markets, and investors are skittish,'' said Vincent Reinhart...

  •  Denmark Is Rethinking Its Spurning of the Euro (0+ / 0-)

    Denmark Is Rethinking Its Spurning of the Euro
    By CARTER DOUGHERTY
    Published: October 27, 2008

    Denmark has discovered that ice-cold credit markets cannot warm up without easing elsewhere in the global financial system. And the same may prove true not just of smaller nations, but even some of the largest ones, including the United States, Japan and Britain.

    "This is a global phenomenon," said Tonny Andersen, the chief financial officer of Danske Bank, which is based in Copenhagen. "The unfreezing will be challenging."

    The Danish Parliament approved a blanket guarantee for all bank deposits and other liabilities on Oct. 10, well before the United States and other European countries acted in bold, but somewhat more limited, ways. The intent in Copenhagen was to deliver an immediate lift to credit markets by demonstrating an ironclad consensus to support Danish banks.

    Initially, it did not work.

  •  British Leader Calls for Larger I.M.F. Bailout (0+ / 0-)

    British Leader Calls for Larger I.M.F. Bailout Fund

    By KATRIN BENNHOLD
    Published: October 28, 2008

    PARIS — Prime Minister Gordon Brown of Britain called Tuesday for China and the Persian Gulf states to put up more money to help the International Monetary Fund deal with the fallout of the credit crisis.

    Mr. Brown’s appeal grabbed the spotlight ahead of a meeting on Tuesday with President Nicolas Sarkozy of France, who called the proposal interesting and vowed to work "hand in hand" with the British leader — just as they had on a coordinated rescue plan for European banks. Mr. Sarkozy said he also believed that the fund needed "additional means" to help ailing economies.

    "Our first priority at the moment is to stop the contagion to other countries, including in Eastern Europe where there are problems emerging," Mr. Brown said before the meeting with Mr. Sarkozy in Versailles, southwest of Paris.

  •  Pitt Says U.S. Regulatory System `Badly Broken' (0+ / 0-)

    Harvey Pitt Says U.S. Regulatory System `Badly Broken'

    The regulatory system was inadequate to deal with the problems we've seen.  There is an enormous need for an overhaul of our regulatory system.  It's badly broken.

    Regarding the fault of the SEC: I think it's a real question of authority... I think the SEC was denied authority  in 1999 when Gram-Leach-Bliley passed...  

  •  Own words on Yen (0+ / 0-)

    The reason for the movement in the yen  is the relative sound fundamentals of the Japanes market and the unwinding of the so-called 'carry trade'.  

    Given those two reasons, I think it's really difficult to change the course of the yen by intervening in the forex markets.

    If we really want to change the coures of the yen, the financial markets should deteriorate.  But that should NOT happen.

  •  Libya's Ghanem Says OPEC Ready for Extra Meeting (0+ / 0-)

    Ghanem Says OPEC Ready for Extra Meeting If Oil Falls (video, transcription below)

    Ghanem:  We are in a situation here where it is not the physical oil that is running the price. You know, people are getting rid of their 'paper-oil'. It is a big problem that we have been speaking about since a long time, that OPEC abdicated the pricing system since a long time and left it to the market and it has been taken, overtaken by the futures market.  And the futures market by nature, is speculative.

    So it was a big bubble, and once it bursted - right now it has burst. So we don't know what to do.  We have to wait, we try a cut, and see what is the result.

    [Regarding what price point would cause further OPEC action:] It is not where it goes, it is the trend itself.  If it is [changing quickly], then we have to do something, otherwise we are meeting on November 17.  And I think, I think it's going to stabilize now.  

    We don't know though, the market is crazy as it is.  President Bush says that the market is drunk.  So when you are dealing with a drunk, you don't know what to do. [chuckle and smile]

    The picture is completely complicated and interrelated.  The dollar is going up - this is some kind of compensation.  And the commodities are going down, this is also a compensation.  But then you add the cost of production - the cost of producing oil it's still very high.  So this is another problem.  The picture is so complicated that we have to see and analyze.  We cannot pinpoint a certain price because it is very much related to all the facts.

    It's not even if it goes to $50, even now I have been contacted by so many companies that say they are scrapping the programs that they were planning. In my country and the industry in general.  This is a very serious situation.  It could lead to another future crunch.  Which would mean we could have oil for even more than $147.

    (paraphrase: In Libya we have so many projects planned.  We planned to increase our oil ouput starting next year.  Now we are reviewing all that.)  But still, it's too early to decide.  But of course, we are watching the market.  

    [Regarding the viability of the projects to be reviewed:]  Some are not viable, some the banks cannot finance.  The banks used to come to you and say: hey, take money.  Now, small letters of credits cannot be opened by some people.  There is a crunch in the banking system, so it is very complicated, interrelated.

  •  US seeks Gulf money (0+ / 0-)

    US seeks Gulf money to get over financial crisis

    By Shakir Husain, Staff Reporter
    Published: October 28, 2008, 14:51

    Dubai: A senior US official on Tuesday made a strong pitch for Gulf Arab investment and promised them better treatment than meted out to Dubai port operator DP World two years ago as the United States tries to overcome turmoil in its financial system.

    Robert Kimmitt, deputy secretary of the Treasury, said that the crisis is not limited to the US and Europe but "has ramifications for all countries, including the Gulf."

    Kimmitt called for collective efforts to rebuild confidence in the markets and stressed investment funds controlled by governments in the region had a role to play in this.

    •  Brown Asks Gulf Wealth Funds to Invest in U.K. (0+ / 0-)

      Gordon Brown Asks Gulf Wealth Funds to Invest in U.K. (Update1)

      By Gonzalo Vina

      Nov. 2 (Bloomberg) -- U.K. Prime Minister Gordon Brown urged sovereign wealth funds from the Persian Gulf to invest in British companies needing more financing because of the credit crunch.

      Brown arrived in Riyadh late yesterday with Business Secretary Peter Mandelson, Energy Secretary Ed Miliband and a delegation of business leaders to encourage funding from cash- rich oil producers.

      ``The Gulf states will have a vital role to play in agreeing the plans to get the world economy moving again,'' Brown told reporters before arriving in Riyadh. They ``are an increasingly important source of inward investment to the U.K. As long as they play by our rules and operate in a commercial manner, we welcome investment from sovereign wealth funds.''

      •  Barclays seeks $11.8B from Middle East investors (0+ / 0-)

        Barclays seeks $11.8 billion injection
        By Julia Werdigier
        Published: October 31, 2008

        LONDON: Barclays plans to raise £7.3 billion, or $11.8 billion, by selling shares to Abu Dhabi and Qatar to meet Britain's new capital requirements for banks without the government's help.

        Barclays is to sell £5.8 billion of convertible notes , which could leave the Middle Eastern investors with as much as 32 percent of the British bank, Barclays said on Friday. The London-based bank also plans to raise an additional £1.5 billion by selling securities to new and existing shareholders.

        "One has to give Barclays credit for being able to raise that capital," said Adrian Darley, a fund manager at Resolution Asset Management in London. "But it is also dilutive for shareholders and even though this is enough to keep them operating, the question for Barclays remains whether it's enough to give them flexibility to go after opportunities in the current market."

      •   Gordon Brown extracts IMF pledge from Saudis (0+ / 0-)

        Gordon Brown extracts IMF pledge from Saudis

        Sam Coates, Riyadh | November 04, 2008

        BRITISH Prime Minister Gordon Brown has claimed success in his attempt to persuade Saudi Arabia to help stricken economies by pumping more into the International Monetary Fund.

        "The Saudis will, I think, contribute so we can have a bigger fund worldwide," Mr Brown said following a weekend visit to the oil-rich capital.

        But he has been warned not to treat Saudi Arabia as a "cash cow", because it has its own plans to spend the billions generated by the oil price surge.

        Mr Brown did not disclose the scale of the Saudi pledge, saying the figures would be revealed at the summit in Washington in the middle of this month.

  •  China's land reform aims to revolutionize 750 mil (0+ / 0-)

    China's land reform aims to revolutionize 750 million lives
    Beijing hopes the policy will improve farming and free peasants to seek a better livelihood.

    from the October 27, 2008 edition

    Reporter Peter Ford discusses how far China's land policy has moved away from Mao Zedong's dream of collectivized agriculture.

    Mijian, China - Zhang Xiaosui is the very model of a modern Chinese peasant.

    Farming a field 10 times larger than any of his neighbors' in this scruffy village in central China, he is on the front lines of a new government drive to transform Chinese agriculture, and with it the lives of 750 million country dwellers.

    If the land reform announced last week works as officials hope it will, many peasants will emulate Mr. Zhang's effort to turn family plots into a modern farm, and help bang one of the last nails into the coffin of Mao Zedong's collectivist dream.

    "I wanted to farm more land before, but I didn't have the opportunity," Zhang says, sitting in his comfortably appointed front room. "Now I can, because the government is starting to support my idea."

    In what the official news agency Xinhua called a "landmark policy document," the ruling Communist Party's Central Committee agreed last weekend to allow small farmers to sell their right to till the land. The plan is designed to consolidate landholdings, encourage uneconomic farmers to seek other employment, and boost rural incomes.

  •  PM Putin suggests Russia, China ditch dollar (0+ / 0-)

    PM Putin suggests Russia, China ditch dollar in trade deals
    28/ 10/ 2008

    MOSCOW, October 28 (RIA Novosti) - Russian Prime Minister Vladimir Putin proposed on Tuesday that Russia and China gradually switch over to national currency payments in bilateral trade, expected to total $50 billion in 2008.

    "We should consider improving the payment system for bilateral trade, including by gradually adopting a broader use of national currencies," Putin told a bilateral economic forum.

    He admitted the task would be tough, but said it was necessary amid the current problems with the dollar-based global economy.

    •  Moscow, Beijing sign oil pipeline deal (0+ / 0-)

      Moscow, Beijing sign deal to build oil pipeline leg to China
      28/ 10/ 2008

      Print version

      MOSCOW, October 28 (RIA Novosti) - Russia and China signed on Tuesday an agreement for the construction of a pipeline branch to China as part of the East Siberia-Pacific Ocean (ESPO) oil pipeline.

      It was earlier reported that construction could start later this year. The branch, which runs from Skovorodino to the Chinese border, will have a capacity of 15 million tons of oil a year.

      The ESPO pipeline is designed to pump up to 1.6 million barrels of crude per day from Siberia to Russia's Far East and then onto energy-hungry China and the Asia-Pacific region. A 1,100 km stretch of the pipeline was opened in early October in Russia's Far Eastern republic of Yakutia.

    •  China, Russia renounce the dollar? (0+ / 0-)

      China, Russia renounce the dollar?
      20:32 | 30/ 10/ 2008
      en.rian.ru
      Print version

      MOSCOW. (Anatoly Gorev for RIA Novosti) - The recent meeting between Russian Prime Minister Vladimir Putin and his Chinese counterpart, Wen Jiabao, created a financial sensation. Wen said that the two nations could withstand the global financial crisis if they joined forces; Putin urged him to go farther and stop using U.S. dollars in Russian-Chinese settlements.

      This idea is nothing new. Russia and China reached a "framework" agreement in November 2007, which was followed by China's similar agreement with Belarus.

      Earlier this year, Iranian President Mahmoud Ahmadinejad and Venezuelan leader Hugo Chavez turned against the dollar as well when they asked their OPEC partners to stop using the dollar for oil settlements. They argued that the "green" currency was no longer reliable and it was high time they look for a more stable and predictable alternative.

  •  Sarkozy, Brown hold financial talks (0+ / 0-)

    Sarkozy, Brown hold financial talks in sign of warming ties

    13 hours ago

    PARIS (AFP) — Prime Minister Gordon Brown was to meet French President Nicolas Sarkozy for the third time this month on Tuesday, in a sign of increased cooperation between London and Paris on the economic crisis.

    France's traditionally close bond with Germany has been tested by sniping between the offices of Sarkozy and Chancellor Angela Merkel, while Brown has become a regular visitor to Paris since the credit crunch hit.

    Sarkozy, the current holder of the European Union presidency, hopes to build a common European front at a Brussels summit next week, ahead of a meeting of the G20 group of current and emerging powers in Washington on November 15.

    The French leader has said he would like to see the world agree to "refound the global financial system", and needs all the support he can get.

  •  French FM: EU and Russia to resume talks (0+ / 0-)

    By Irina Titova
    ASSOCIATED PRESS

    6:12 a.m. October 28, 2008

    ST.PETERSBURG, Russia – The European Union plans to resume talks on a major political and economic cooperation agreement with Russia at a summit next month, the French foreign minister said Tuesday.

    Bernard Kouchner says that the talks are to resume at a Russia-EU summit in Nice, France, set for Nov. 13-14. The EU put the talks on hold after Russia's war with Georgia in August. Some EU members have balked at restarting them because of Russia's failure to fully comply with a EU-brokered peace deal.

    The existing 10-year Russia-EU partnership agreement signed in 1997 was automatically renewed pending delays on reaching a new one, but the old deal has lost much of its relevance due to Russia's energy wealth and its increasingly assertive foreign policy.

  •  Prince Charles says climate crisis trumps economy (0+ / 0-)

    Prince Charles says climate crisis trumps economy
    By JAY ALABASTER – 12 hours ago

    TOKYO (AP) — Britain's Prince Charles said Tuesday the current financial crisis should not distract from the larger issue of global warming.

    "The credit crunch is rightly a preoccupation of vast significance and importance. But we take our eye off the climate crunch at our peril," he said in a speech at a science museum in Tokyo.

    •  China passes U.S. as No. 1 greenhouse polluter (0+ / 0-)

      China passes U.S. as No. 1 in greenhouse gas emissions Reuters
      Published: Thursday, October 30, 2008

      BEIJING -- China's greenhouse gas emissions have caught up with those of the United States and will not fall soon, a top official said Wednesday, while warning of a huge economic blow from global warming.

      The comments from Xie Zhenhua, a deputy chief of the National Development and Reform Commission, which steers climate change policy, marked China's first official acknowledgement that it could already be the world's biggest greenhouse gas polluter.

      Many experts believe China's output of carbon dioxide, the main greenhouse gas from burning fossil fuels, has already outstripped that of the U.S., for more than a century the world's biggest emitter.

      •  Premier Wen visits Russia, kazakstan, SCO mtng (0+ / 0-)

        Many, many links on this page.  Too many to list here.

        Including:

        Chinese premier meets with Iranian vice president
        www.chinaview.cn 2008-10-30 23:45:19   Print

           ASTANA, Oct. 30 (Xinhua) -- Chinese Premier Wen Jiabao said here Thursday that China will maintain contact with Iran and conduct mutually beneficial cooperation with the country.

           The Chinese premier made the remark at a meeting with Parviz Davoodi, first vice president of Iran, on the sidelines of the 7thprime ministers' meeting of the Shanghai Cooperation Organization (SCO) in Astana, the capital of Kazakhstan.

           Iran is an observer of the SCO.

           Wen spoke highly of the traditional friendship between the peoples of China and Iran.

        •  Here are a list of link titles: (0+ / 0-)

          Go to this page to view live links.

          :::::: Chinese premier urges unity within SCO to mitigate impact of financial crisis  2008-10-30 22:40
          :::::: Chinese premier meets with Iranian vice president 2008-10-30 23:45
          :::::: Premier Wen makes four-point proposal for strengthening SCO co-op 2008-10-30 21:33
          :::::: SCO prime ministers discuss co-op in Astana 2008-10-30 12:27
          :::::: Chinese premier says to strengthen cooperation with Mongolia 2008-10-30 18:03
          :::::: Chinese premier praises Sino-Russia co-op, vows to deepen relations 2008-10-30 07:10
          :::::: Chinese premier arrives in Astana on official visit 2008-10-29 20:50
          :::::: Chinese premier says multipolar world conducive to peace, development 2008-10-30 02:33
          :::::: Chinese premier praises Sino-Russia cooperation, vows to deepen relations 2008-10-30 02:31
          :::::: Chinese premier concludes visit to Russia 2008-10-29 18:17
          :::::: China, Russia issue joint communique 2008-10-29 05:55
          :::::: Chinese premier delivers speech at China-Russia economic, trade forum 2008-10-29 03:54
          :::::: Wen makes five-point proposal on furthering China-Russia economic co-op 2008-10-29 01:16
          :::::: Wen, Putin hold talks in Moscow 2008-10-28 18:23
          :::::: Third Sino-Russian economic forum opens in Moscow 2008-10-28 17:16
          :::::: Premier Wen Jiabao arrives in Moscow 2008-10-28 04:10
          :::::: China, Russia to further cooperation 2008-10-27 21:20
          :::::: Chinese premier leaves for Russia, Kazakhstan 2008-10-27 15:09
          :::::: Chinese Premier to visit Russia, Kazakhstan 2008-10-21 10:47
          :::::: Chinese, Russian officials pledge to push forward energy co-op 2008-10-26 16:39
          :::::: Interview: Kazakh PM commends Chinese premier's visit, SCO's importance 2008-10-26 18:37
          :::::: Premier Wen's visit to boost strategic partnership of co-op with Russia 2008-10-26 11:58
          :::::: Kazakh PM: Chinese premier's upcoming visit to be milestone in bilateral co-op 2008-10-26 17:40
          :::::: Chinese Premier's Russia visit expected to be fruitful 2008-10-22 02:48
          :::::: China, Russia to boost trade, investment 2008-10-14 21:00
          :::::: FM: China boundary agreement with Russia sets example 2008-10-14 19:03
          :::::: China, Russia unveil boundary markers 2008-10-14 11:43

  •  Iceland central bank hikes interest rates 6 pct (0+ / 0-)

    Wednesday, October 29, 2008 00:26

    Iceland central bank hikes interest rates 6 pct

    Iceland’s central bank has raised its key interest rate by a stunning 6 percentage points to 18 percent on Tuesday.

    (UPDATED)  Analysts said Iceland had increased rates, just two weeks after cutting them by 3.5 points, to try to refloat the Icelandic crown, effectively frozen since Oct. 22. An increase in interest rates would make its currency more attractive to foreign investors, thereby helping its value.  

    "This has come a bit out of the blue following the latest interest rate cut and it reflects a desperate attempt to restore a degree of confidence in the local market," Elisabeth Gruie, emerging markets strategist at BNP Paribas in London told Reuters.

    •  Iceland PM links banks' UK debt burden to Versail (0+ / 0-)

      Iceland PM links banks' UK debt burden to Versailles

             * October 30, 2008 - 2:17PM
         *AFP

      Icelandic Prime Minister Geir Haarde says his country cannot afford to fully compensate British savers who lost money in its stricken banks, as it would cripple the economy.

      "I don't want to make comparisons with Versailles, but the debt burden from this type of arrangement would be terrible,'' he told The Times newspaper, referring to the 1919 treaty ending World War I that left Germany struggling with debt.

      "It's an enormous number. Everyone has to figure out for themselves whether that would be sustainable.''

      Iceland's once booming financial sector has collapsed under the weight of the worldwide credit crunch, forcing the government to take control of the major banks as its currency has nosedived.

      Scrambling to protect Britons' savings in branches of the nationalised Icelandic banks, London used anti-terrorist laws to freeze the banks' assets, sparking protests by Icelanders as both sides threatened legal action.

  •  Germany Seeks to Block French Plans (0+ / 0-)

    Finance | 28.10.2008
    Germany Seeks to Block French Plans on Tackling Financial Crisis

    Großansicht des Bildes mit der Bildunterschrift:  Merkel is seen as the only leader in Europe able to stand up to Sarkozy

    French President Sarkozy's advocacy of state intervention to tackle the global financial meltdown has raised hackles in Germany. Chancellor Merkel is leading efforts to stymie greater government control of money markets.

    As EU governments scramble to shore up their teetering banks and reassure jittery investors and citizens amid a worsening credit crisis and looming recession, fears are growing of a widening rift between Europe's largest economies, France and Germany, over how to handle the financial crisis.

    French President Nicolas Sarkozy, who holds the rotating EU presidency, has called for an "economic government" for the 15-nation euro zone and urged EU countries to take stakes in strategic industries as the financial crisis bites. The French president has also announced the creation of a sovereign wealth fund for France to protect key firms from hostile foreign takeovers.

  •  Chinese Premier Wen Jiabao arrives in Moscow (0+ / 0-)

    Chinese Premier Wen Jiabao arrives in Moscow
    www.chinaview.cn 2008-10-27 22:32:21  

    Special Report: Premier Wen visits Russia, Kazakhstan, attends SCO meeting

       

    MOSCOW, Oct. 27 (Xinhua) -- Chinese Premier Wen Jiabao arrived here on Monday for an official visit aimed at strengthening China's strategic partnership with Russia.

       During his three-day stay here, Wen is scheduled to hold talks with Russian President Dmitry Medvedev, Prime Minister Vladimir Putin and Chairman of the State Duma, the lower house of Russia's parliament, Boris Gryzlov.

    The continuous development of bilateral strategic and cooperative partnership conforms to the fundamental interests of the two peoples, and is conducive to peace and stability in the region and the world at large, said the Chinese premier.

       He said he will exchange candid views with Putin on major issues concerning substantial bilateral cooperation.

  •  Russia Gas alliance is not against the west (0+ / 0-)

    Russia: US, not Iran blackmailing world
    Tue, 28 Oct 2008 10:19:45 GMT
    Russian Duma vice speaker says Gas OPEC is not against West's interests

    Moscow has ruled out claims that the OPEC-style gas alliance between Iran, Russia and Qatar could be used to make pressure on the West.

    A recent agreement between the three main world gas owners to create a technical committee for joint gas projects has sparked concern among some Western consumers especially the US, claiming the group and particularly Iran wants to control prices as a tool to exert pressure on the West.

    Russian Duma vice speaker refused the view that Iran's participation in the triple alliance is a chance for blackmail, Svetlana Korkina, Press TV correspondent in Moscow reported.

  •  White House Tells Banks To Stop Hoarding Money (0+ / 0-)

    White House Tells Banks To Stop Hoarding Money

    JENNIFER LOVEN | October 28, 2008 07:18 PM EST | AP

    WASHINGTON — An impatient White House prodded banks and other financial companies Tuesday to quit hoarding billions of dollars flowing into their vaults from Washington and start making more loans. Wall Street soared nearly 900 points on bargain-hunting and hopes of a hefty interest rate cut by the Federal Reserve.

    The stock market's amazing climb, with its second-largest point gain ever, was a welcome burst of good news for a nation suffering big job losses and seemingly tumbling into a painful recession.

    "What we're trying to do is get banks to do what they are supposed to do, which is support the system that we have in America. And banks exist to lend money," White House press secretary Dana Perino said. While there are limits to Washington's power to affect banks' behavior, the White House decided it was time to use its bully pulpit.

    "They (regulators) will be watching very closely, and they're working with the banks," Perino said.

  •  Hungary's Deal With the IMF Lifts Markets (0+ / 0-)

    (subscription required)
    By MARCUS WALKER and CHARLES FORELLE

       *

    Hungary's $25.1 billion bailout by a group of international organizations lifted many Eastern European currencies and financial markets on Wednesday, as investors grew more confident that emerging markets around Europe's periphery can get help to avoid a financial meltdown.

    Concerns remain about the bleak economic outlook in Hungary and elsewhere in Europe's East. Hungary's bailout also raises questions about the financial health of other countries in the region, such as Romania, Bulgaria and the Baltic nations, which are even more exposed to a drying up of credit from abroad.

  •  Loan Giants' Takeover Hasn't Paid Off (0+ / 0-)

    By Zachary A. Goldfarb
    Washington Post Staff Writer
    Wednesday, October 29, 2008; Page D01

    Almost two months ago, the government sought to revive the nation's ailing mortgage sector by seizing Fannie Mae and Freddie Mac and pumping money into the home-loan market. But so far, the measures have yet to achieve their intended effect.

    Backed by taxpayers, the mortgage finance giants have spent billions in an attempt to push down loan rates and make it easier for people to borrow money to buy homes. But mortgage rates have gone up.

    The day before the companies were taken over, interest rates on 30-year, fixed-rate mortgages averaged 6.34 percent. Yesterday, they averaged 6.56 percent, according to HSH.com, which surveys lenders. The figures have swung wildly over the past two months.

    "It makes it very hard for consumers to have any sense of what's happening to interest rates," said Keith Gumbinger, HSH vice president. "There's not enough time between the move in interest rates and the consumer's ability to react to that." Doubts are growing among financial analysts and investors about whether the companies will be able to meet the government goal despite their best efforts.

  •  Cuomo Investigates Bonuses at Banking Companies O (0+ / 0-)

    Cuomo Investigates Bonuses at Banking Companies
    October 29, 2008, 3:12 pm

    The New York attorney general has expanded his investigation of bonus payments to Wall Street executives whose banking companies are receiving $125 billion in support from the federal government.

    In a letter sent on Wednesday to the nine financial institutions receiving government aid, the attorney general, Andrew M. Cuomo, asked for "a detailed accounting regarding your expected payments to top management in the upcoming bonus season."

    The letter also raised the prospect of a lawsuit relying on a New York law that, Mr. Cuomo has said, permits the recovery of payments worth more than the services provided by executives.

    Mr. Cuomo sent his letter to Citigroup, Bank of America, Bank of New York Mellon, Goldman Sachs, JPMorgan Chase, Merrill Lynch, Morgan Stanley, State Street and Wells Fargo.

    •  Wall Street Won't Surrender on Bonuses (0+ / 0-)

      Wall Street Won't Surrender on Bonuses, Veterans Say (Update1)
      By Christine Harper

      Oct. 30 (Bloomberg) -- Wall Street's chief executives will hunker down and pay bonuses this year in the face of the worst financial crisis since the Great Depression, a taxpayer bailout and mounting political outcry, industry veterans say.

      Odds that Wall Street will forgo the payouts are ``slim to none,'' said John Gutfreund, 79, president of New York-based Gutfreund & Co. and the former chief executive officer of Salomon Brothers Inc. ``They're going to have to be a little bit sensitive because politicians, whether they like it or not, are part of their lives now.''

  •  Governors Call for Federal Rescue Package for Sta (0+ / 0-)

    Governors Call for Federal Rescue Package for States
    By JEREMY W. PETERS
    Published: October 29, 2008

    Appearing before separate congressional committees on Wednesday, Mr. Paterson and Mr. Corzine said their states, like many others, have already moved to address their budget deficits. Their actions alone would not be enough, they said.

    "We are cutting all we can," Mr. Paterson told the House Ways and Means Committee. "Therefore, we feel that targeted, sensible actions by the federal government will provide relief for us now."

    Speaking to the House Transportation and Infrastructure Committee, Mr. Corzine implored, "We need federal help to get through these tough times."

  •  Reserve Fund’s Investors Still Await Their (0+ / 0-)

    By DIANA B. HENRIQUES
    Published: October 28, 2008

    The national "bank holiday" that ushered in the New Deal in 1933 locked up the public’s cash for four days. The crisis that hit last month at the Reserve Fund, the nation’s oldest money market fund, has frozen hundreds of thousands of customer accounts for more than six weeks — with no sure end in sight.

    At least 400,000 people, and perhaps as many as a million, can’t get access to their savings, a problem that has quietly persisted in spite of widely publicized federal efforts to restore confidence in money-fund investments.

    Many Reserve investors say their issue has become the forgotten crisis. "The government is focused on the banks and the big problems," said Sherry Bryan, a retired industrial photographer in Atlanta. "But this is happening right now to real people."

    The largest fund, the Primary Fund, is not eligible for the ad hoc insurance program the Treasury set up for money funds last month. The big US Government Fund seems to meet the criteria and has applied for coverage, but no announcement of its acceptance has been made.

    The biggest mystery is why redemptions from that government fund have not been handled more promptly, said James Cracchiolo, chief executive of Ameriprise Financial Services in Minneapolis.

  •  Fed Creates Swaps With South Korea, Brazil, Mexic (0+ / 0-)

    Fed Creates Swaps With South Korea, Brazil, Mexico(Update1)

    By Steve Matthews and William Sim

    Oct. 29 (Bloomberg) -- The Federal Reserve agreed to provide $30 billion each to the central banks of Brazil, Mexico, South Korea and Singapore in its biggest effort yet to curtail the spread of financial market turmoil beyond developed economies.

    The Fed set up ``liquidity swap facilities with the central banks of these four large systemically important economies'' effective until April 30, the central bank said today in a statement. The arrangements aim ``to mitigate the spread of difficulties in obtaining U.S. dollar funding in fundamentally sound and well managed economies.''

    The global credit crisis that started last year with the collapse of the U.S. mortgage-backed securities market has roiled developing nations, sending the premiums on their government bonds up and their currencies down. Today's Fed announcement coincided with a decision by the International Monetary Fund to almost double borrowing limits for emerging market countries.

    ``The Fed is there to support large emerging markets that have done their homework over the past several years like South Korea, Brazil, Singapore and Mexico,'' said Alonso Cervera, a Latin America economist with Credit Suisse Group in New York. ``These are large, relevant emerging countries that have followed responsible fiscal and monetary policies for the past several years and now are going through tough times.''

  •  Fed Cuts Rate to 1% to Avert Prolonged Recession (0+ / 0-)

    Fed Cuts Rate to 1% to Avert Prolonged Recession(Update3)

    By Craig Torres
    Enlarge Image/Details

    Oct. 29 (Bloomberg) -- The Federal Reserve cut its benchmark interest rate by half a percentage point to 1 percent, matching a half-century low, in an effort to avert the worst U.S. economic downturn in the postwar era.

    ``Downside risks to growth remain,'' the Federal Open Market Committee said today in a statement in Washington. ``Recent policy actions, including today's rate reduction, coordinated interest-rate cuts by central banks, extraordinary liquidity measures, and official steps to strengthen financial systems, should help over time to improve credit conditions and promote a return to moderate economic growth.''

    •  Fed Cut Won't Help Lending Much (0+ / 0-)

      Liz Moyer, 10.29.08, 5:59 PM ET

      Another rate cut by the Federal Reserve might encourage banks to start lending again, but it sure doesn't offer much consolation to consumers.

      The Fed slashed its overnight lending rate 50 points, to 1%, as expected on Wednesday, its lowest level since June 2003. Back then, the dramatically low federal funds rate was enough to spur a wave of borrowing by companies and individuals, so much so that a series of 17 rate increases followed from June 2004 to June 2006 as the Fed tried to temper inflation in a boom period.

      Times are different, however. In 2003, the U.S. economy was coming out of a slump. In 2008, it is deteriorating.

  •  U.S. Treasury Program Shuns Banks That Need Cash (0+ / 0-)

    U.S. Treasury Program Shuns Banks That Need Cash Most (Update2)

    By David Mildenberg and Linda Shen

    Oct. 29 (Bloomberg) -- The U.S. government's $160 billion handout to banks from Niagara Falls to Beverly Hills is going mostly to lenders that need it least, putting weaker rivals at risk of being shut down or taken over, analysts say.

    ``This has the unintended effect of making the strong stronger and the weak weaker,'' said Gray Medlin, founder of Carson Medlin Co., a Raleigh, North Carolina, investment bank focused on banking deals. ``Banks that are getting bad exams and are under intense pressure from regulators won't be successful in applying.''

  •  Lockheed, Ryder Drain Cash as Crisis Hammers Pens (0+ / 0-)

    Lockheed, Ryder Drain Cash as Crisis Hammers Pensions (Update1)

    By Pat Wechsler and Edmond Lococo

    Oct. 29 (Bloomberg) -- A trade group whose members include Lockheed Martin Corp., Dow Chemical Co. and General Motors Corp. is pressing Congress to help close a record $200 billion deficit in U.S. pensions created by this month's global stock-market collapse.

    The Committee on Investment of Employee Benefit Assets is kicking off a lobbying effort today to delay provisions of the Pension Protection Act that it says will force companies to drain cash flow to comply with funding rules set to take effect next year.

    ``This will be real money that companies will have to come up with,'' said Judy Schub, managing director of the Bethesda, Maryland-based group, which represents 110 of the nation's largest retirement plans holding almost half of U.S. assets. ``The law will be forcing people to be taking money out of operations at the worst possible time.''

  •  Loopholes to disclosure widespread across Europe (0+ / 0-)

    By Richard Milne and Jennifer Hughes in London, Scheherazade Daneshkhu in Paris and Chris Bryant in Berlin

    Published: October 29 2008 19:58 | Last updated: October 29 2008 19:58

    For all the outcry over Porsche’s stealth takeover of Volkswagen, it seems it could have happened almost anywhere in Europe.

    Regulators around the world have long been grappling with how to deal with so-called cash-settled options, which pay out in cash rather than delivery of the underlying shares. Such options allow investors to build stakes without having to disclose them.

    Germany has seen two of the most spectacular uses in recent years of such derivatives: Porsche’s creeping takeover of VW with its disclosure this week that it holds 31.5 per cent in cash-settled options; and the acquisition by Schaeffler of car parts supplier Continental after it suddenly disclosed it controlled 36 per cent of the shares, mostly through options.

  •  Credit `Tsunami' Swamps Trade (0+ / 0-)

    Credit `Tsunami' Swamps Trade as Banks Curtail Loans (Update2)

    By Michael Janofsky, Mark Drajem and Alaric Nightingale
    Enlarge Image/Details

    Oct. 29 (Bloomberg)...

    ``It was like a spigot got cut off,''
    Burnett said, recounting the transaction that fell apart in July. The inability of buyers in China and Vietnam to get letters of credit has cost his company as much as $4 million this year, a third of projected revenue, forcing him to lay off 15 of 35 employees, he said.

    Suppliers of oil, coal, grains and consumer products from Chicago to Mumbai are losing sales as the credit crisis spreads beyond financial institutions, and banks refuse financing or increase the fees for buyers. Coupled with declining demand, the credit squeeze is threatening international trade, one of the lone bright spots in the global economy.

    ``It's like standing on a beach watching a tsunami, knowing that it's coming,'' said Scott Stevenson, manager of the International Finance Corp.'s Global Trade Finance Program. IFC is the World Bank's private lending arm.

  •  World According to TARP (0+ / 0-)

    World According to TARP No Laughing Matter for U.S. (Update2)

    By Abigail Moses and Shannon D. Harrington

    Oct. 29 (Bloomberg) -- The financial crisis exacerbated by credit derivatives is costing so much to fix that speculators are now using those same instruments to bet on governments as the price tag for bailing out banks approaches $3 trillion.

    The cost to hedge against losses on $10 million of Treasuries is about $40,000 annually for 10 years, up from $1,000 in the first half of 2007, based on CMA Datavision prices. The equivalent for German bunds has risen to more than $36,000 from $2,000, while it has jumped to $64,000 from $3,000 for U.K. gilts.

    Unlike John Irving's novel ``The World According to Garp,'' which provokes laughter from readers, the devastation amplified by derivatives is proving unfunny as taxpayers finance the financial system's rescue through measures such as the $700 billion Troubled Asset Relief Program, or TARP. Pressure is rising on policy makers to regulate a market that's moved beyond its origins protecting banks from loan losses to $55 trillion, prompting Warren Buffett to call the contracts a ``time bomb.''

  •  Argentine Pension Seizure Spurs Brazil Stock Sale (0+ / 0-)

    Argentine Pension Seizure Spurs Brazil Stock Sale (Update4)

    By James Attwood

    Oct. 29 (Bloomberg) -- Argentina's planned nationalization of its retirement system will trigger a fire sale of Brazilian stocks this week as private pension funds are forced to shed foreign holdings.

    The pensions must unload Brazilian assets within three days of ``notification,'' according to a resolution distributed by e- mail today. Amado Boudou, the head of Argentina's social security agency, told lawmakers yesterday that the funds shouldn't own foreign investments.

    ``That's not news we like, but I don't think it will cause problems,'' Carlos Kawall, chief financial officer of Brazil's securities exchange BM&FBovespa SA, said in an interview in New York yesterday.

  •  China wants more say in global financial bodies (0+ / 0-)

    By HENRY SANDERSON– 11 hours ago

    BEIJING (AP) — China will want a bigger say in any new global financial order emerging from the current economic crisis, but will likely move cautiously in contributing to a proposed bailout fund for economic reeling countries, economists said Wednesday.

    British Prime Minister Gordon Brown has called on China and oil-rich Persian Gulf states to fund a major increase to a bailout fund at the International Monetary Fund, the latest call for Beijing to use some of its $1.9 trillion of reserves.

    Beijing's leaders have said they are willing to cooperate internationallly, but have said China's responsibility lies in keeping its economy going by boosting domestic demand.

  •  IMF, WB have caused misery to poor nations (0+ / 0-)

    Wednesday, 29th October, 2008
    E-mail article E-mail article   Print article Print article

    By Peter Mulira

    When the World Bank (WB) and the International Monetary Fund (IMF) required the government of Mali to privatise its cotton sector, President Amadou Toumani Toure travelled to Washington in 2005 to plead for the reversal of the policy to no avail.

    Cotton was the country’s main foreign exchange earner but the condition had to be fulfilled if mali expected to get loans and credits. Later the President was to lament about his experience that "people who have never seen cotton come to give us lessons on cotton. No one can respect the conditionalities of donors.

    They are so complicated that they themselves have difficulty getting us to understand them. This is not partnership. This is a master relating to a student."

    The liberalisation of the country’s cotton industry wreaked havoc as cotton revenues fell by 20 percent in just one year following the industry’s exposure to the vagaries of the world cotton markets where prices are depressed by subsidies given to farmers in the United States and the European Union and this led farmers to abandon the sector.

    Mali’s example can be replicated in all African countries which have succumbed to the conditionalities of the WB and the IMF over the last 25 years.

  •  Government Discussing Plan to Aid Homeowners (0+ / 0-)

    Government Said to Be Discussing Plan to Aid Homeowners

    By VIKAS BAJAJ and ERIC DASH
    Published: October 29, 2008

    Senior Bush administration officials are completing a plan that could help up to three million homeowners struggling to pay their mortgages to stay in their homes, three people briefed on the proposal said Wednesday.

    The initiative could be the most sweeping government effort directed at mortgage borrowers since the financial crisis began last year. Under the plan, the government would agree to shoulder half of the losses on home loans if mortgage companies agreed to lower borrowers’ monthly payments for at least five years, according to the people briefed on the plan who asked not to be named because details were still being negotiated.

    Officials from the Treasury Department and the Federal Deposit Insurance Corporation are working on the proposal and an announcement may come soon. Sheila C. Bair, the chairwoman of the F.D.I.C., has been the leading proponent of the plan and first discussed the idea publicly a week ago.

  •  Market motion sickness to continue (0+ / 0-)

    The Dow soared nearly 900 points Tuesday. Experts say investors need to prepare for more big moves - both up and down - in the coming months.

    By Paul R. La Monica, CNNMoney.com editor at large
    Last Updated: October 29, 2008: 3:58 PM ET

    The Dow has suffered big drops and enjoyed large gains in what's been a rocky October.

    NEW YORK (CNNMoney.com) -- Don't get too excited: The Dow may have surged nearly 11% on Tuesday, but we've been here before...just two weeks ago.

    On Oct. 13, the Dow jumped 936 points, and then went on to shed more than 1,200 points, or 13%, in the days before yesterday's big move.

    The plain fact is, massive selling will lead to occasional massive pops.

  •   Earth on course for eco 'crunch' (0+ / 0-)

    Earth on course for eco 'crunch'
    Paper mill (Autocat/EyeWire)

    Reckless consumption comes at a high cost, the report warns

    The planet is headed for an ecological "credit crunch", according to a report issued by conservation groups.

    The document contends that our demands on natural resources overreach what the Earth can sustain by almost a third.

    The Living Planet Report is the work of WWF, the Zoological Society of London and the Global Footprint Network.

    It says that more than three quarters of the world's population lives in countries where consumption levels are outstripping environmental renewal.

    This makes them "ecological debtors", meaning that they are drawing - and often overdrawing - on the agricultural land, forests, seas and resources of other countries to sustain them.

    WWF's David Norman says the world will need two planets by 2030

    The report concludes that the reckless consumption of "natural capital" is endangering the world's future prosperity, with clear economic impacts including high costs for food, water and energy.

  •   New IMF fund for emerging markets (0+ / 0-)

    New IMF fund for emerging markets
    BBC.co.uk

    The International Monetary Fund (IMF) is creating an emergency fund for emerging market economies to help them weather the global credit crisis.

    The Group of 24 developing countries, which includes nations from Latin America, Asia and Africa, had requested such a development earlier this month.

    IMF officials said a maximum of around $100bn (£61bn) would be available.

    "The IMF will respond to this crisis with all the necessary financing," said IMF boss Dominique Strauss-Kahn.

    The news comes a day after Hungary was granted a multi-billion dollar rescue package by the IMF, the EU and the World Bank.

    ...

    It follows similar measures taken by the IMF to prop up the economies of Ukraine and Iceland.

    The fund is also in talks with Pakistan and Belarus about loans to help them through the crisis.

    •  China keeps door open to helping global financial (0+ / 0-)

      China keeps door open to helping global financial rescue

         * Reuters
         * , Thursday October 30 2008

      BEIJING, Oct 30 (Reuters) - China kept the door open to a bigger role in international efforts to rescue financially beleaguered governments, giving a vague yet positive offer on Thursday to consider pitching in.
      Chinese Foreign Ministry spokeswoman Jiang Yu made the comments in response to a question about proposals from British Prime Minister Gordon Brown and others that countries with "substantial reserves", such as China, contribute more to the International Monetary Fund.
      Jiang kept her response vague, but stressed her government wants to be part of greater international cooperation to fight the global financial turmoil and downturn in growth.
      "The international community should strive together in cooperation and strengthen coordination to together respond to this financial crisis," she told a regular news conference.
      "As a member country of the International Monetary Fund, China has consistently provided funding support," she said.
      "In the future we are also willing, within the ambit of our abilities, to continue positively considering participating in a range of rescue plans."
      China's Foreign Ministry plays no direct role in setting economic policy and its officials often deflect questions on international finance to the "relevant departments".

  •  Financial crisis: World round-up (0+ / 0-)

    Wednesday, 29 October 2008

    Financial crisis: World round-up

    A look at the regions of the world most affected by the financial crisis, and what governments are doing to try to alleviate the financial turmoil.

  •  The layman's finance crisis glossary (0+ / 0-)

    Wednesday, 29 October 2008
    The layman's finance crisis glossary

    The current financial crisis has thrown terminology from the business pages onto the front page of newspapers, with jargon now abounding everywhere from the watercooler to the back of a taxi.

    Here is a guide to many of the business terms currently cropping up regularly, as well as some of the more exotic words coined to describe some of the social effects of the credit crunch.

    Readers can send any terms they need explaining using the form at the bottom.

  •  Finance crisis: In graphics (0+ / 0-)

    Finance crisis: In graphics

    This is one of the most tumultuous times on record in the global financial markets.

    This link gives visual demonstrations of the size of the problem.

  •  Expert: Financial crisis prosecutions likely (0+ / 0-)

    AP
    Expert: Financial crisis prosecutions likely in US
    Wednesday October 29, 1:54 pm ET

    By Derek Gatopoulos, Associated Press Writer
    Corruption expert: Prosecutions expected in US over financial crisis; elsewhere less likely

    ATHENS, Greece (AP) -- Prosecutions of individuals and institutions involved in the global financial crisis are likely in the United States but far less so in other countries, a prominent expert said Wednesday ahead of an international corruption conference in Greece.

    "I'd like to see those responsible for the defaults go to jail," said Barry O'Keefe, a former Australian Supreme Court judge, referring to financial institutions which took on excessive risk in markets and collapsed during the credit crunch.

    "It's very difficult to lay blame, but undoubtedly blame (can) be laid with a number of financial institutions. When you tell a lie about money, it's called fraud," he said.

    O'Keefe will chair a four-day conference in Athens which opens Thursday and is being organized by Transparency International, a Berlin-based corruption watchdog.

  •  Layoffs Sweep From Wall St. Across Region (0+ / 0-)

    By PATRICK MCGEEHAN
    Published: October 29, 2008

    A broad array of businesses across the New York region have begun eliminating jobs by the thousands as the pain of the financial crisis spreads well beyond Wall Street.

    Companies as varied as Yahoo, American Express, Time Inc. and Swissport Cargo Services at Kennedy International Airport say they are preparing to lay off employees, including online ad sales representatives, magazine editors and baggage handlers, in the coming weeks.

    Economists and labor-market analysts predict that the cuts will be part of a large wave of pink slips that is expected to drive up the city’s unemployment rate and strain the state’s unemployment insurance fund. In the week that ended Oct. 11 — the latest week for which data is available — New York led all states with an increase of 5,224 first-time unemployment claims.

  •  A Question for A.I.G.: Where Did the Cash Go? (0+ / 0-)

    By MARY WILLIAMS WALSH
    Published: October 29, 2008

    "You don’t just suddenly lose $120 billion overnight," said Donn Vickrey of Gradient Analytics, an independent securities research firm in Scottsdale, Ariz.

    Mr. Vickrey says he believes A.I.G. must have already accumulated tens of billions of dollars worth of losses by mid-September, when it came close to collapse and received an $85 billion emergency line of credit by the Fed. That loan was later supplemented by a $38 billion lending facility.

    Mr. Vickery and other analysts are examining the company’s disclosures for clues that the cushion was threadbare and that company officials knew they had major losses months before the bailout.

    ...

    These accounting questions are of interest not only because taxpayers are footing the bill at A.I.G. but also because the post-mortems may point to a fundamental flaw in the Fed bailout: the money is buoying an insurer — and its trading partners — whose cash needs could easily exceed the existing government backstop if the housing sector continues to deteriorate.

  •  Public Works Projects Promoted at Hearing (0+ / 0-)

    By ROBERT PEAR
    Published: October 29, 2008

    WASHINGTON — Business executives and Republicans joined Democrats and labor unions in clamoring Wednesday for a multibillion dollar initiative to stimulate the economy with more federal spending on roads and bridges, waterways, airports, railways, schools and energy-saving technology.

    Now is not the time to worry about the federal budget deficit, the witnesses and members of Congress said at a hearing of the House Committee on Transportation and Infrastructure.

    Gov. Jon S. Corzine of New Jersey, a Democrat, told the committee that Congress should take action "post-election, not post-inauguration" — in November or December, instead of waiting until after the new administration takes over in late January — to provide $250 billion to $300 billion for new projects.

    •  Critics Say Roads Projects Won't Jump-Start Econo (0+ / 0-)

      Critics Say Roads Projects Won't Jump-Start Economy

      By Lori Montgomery
      Washington Post Staff Writer
      Thursday, October 30, 2008; Page D01

      As congressional Democrats push for billions of dollars in new spending on roads, bridges and schools to create jobs and revive the economy, many economists are skeptical of the proposal, saying that public works spending is likely to trickle out too slowly to ease the effects of a recession.

  •  I.R.S. May Tighten Rules That Send Profits Abroad (0+ / 0-)

    By LYNNLEY BROWNING
    Published: October 29, 2008

    The Internal Revenue Service is considering a plan to curb a tactic commonly used by multinational corporations with American operations to lower their tax bills, a move that would help bring back some of the billions of dollars in taxable profits held overseas.

    The plan was described on Wednesday by two government officials briefed on the matter, who spoke on the condition of anonymity because they said the plan was still in its early stages.

    A spokesman for the I.R.S. declined to comment Wednesday on a report in a prominent industry publication, Tax Analysts, that quoted a senior I.R.S. official as telling a tax conference on Tuesday that current regulations could be tightened as early as next month.

  •  Banks to Continue Paying Dividends (0+ / 0-)

    Banks to Continue Paying Dividends
    Bailout Money Is for Lending, Critics Say

    By Binyamin Appelbaum
    Washington Post Staff Writer
    Thursday, October 30, 2008; Page A01

    U.S. banks getting more than $163 billion from the Treasury Department for new lending are on pace to pay more than half of that sum to their shareholders, with government permission, over the next three years.

    The government said it was giving banks more money so they could make more loans. Dollars paid to shareholders don't serve that purpose, but Treasury officials say that suspending quarterly dividend payments would have deterred banks from participating in the voluntary program.

  •  Ukraine Lawmakers Unite To Pass IMF Loan Measure (0+ / 0-)

    By Philip P. Pan
    Washington Post Foreign Service
    Thursday, October 30, 2008; Page A18

    MOSCOW, Oct. 29 -- Ukraine's fractured parliament broke a political deadlock Wednesday and gave initial backing to a legislative package negotiated with the International Monetary Fund as a condition for a $16.5 billion loan to bolster the nation's reeling economy.

    The vote came as the IMF announced a $25.1 billion bailout for Hungary with the support of the European Union and the World Bank in an attempt to contain a mounting currency crisis across Central and Eastern Europe that analysts fear could spark a wave of defaults on debts held by Western Europe.

    •  Ukraine Faces Devaluation as Politicians Haggle (0+ / 0-)

      Ukraine Faces Devaluation as Politicians Haggle(Update1)

      By Sebastian Alison and Daryna Krasnolutska

      Nov. 3 (Bloomberg) -- Ukrainian politicians have been unable to agree on much of anything since the country rejected its Soviet past in the 2004 Orange Revolution. Their squabbling now may lead to a currency devaluation and more capital flight.

      Parliament took more than a week to pass legislation on Oct. 31 accepting the initial terms of a $16.5 billion International Monetary Fund loan as a tumbling currency and $100 billion in debt to be repaid next year threaten the economy and the financial system. Still to be debated are the final belt-tightening measures required by the IMF.

  •  Oil's Dropped, but Price Contracts Haven't (0+ / 0-)

    Gary Kelly is chief of Southwest Airlines, which made bad oil bets.

    By Steven Mufson
    Washington Post Staff Writer
    Thursday, October 30, 2008; Page D01

    As oil prices were spiking in July, Southwest Airlines chief executive Gary C. Kelly told a conference that his company was "very well prepared to weather the storm" and "prepared for $4 jet fuel." But it turned out that what Southwest wasn't ready for was $2 jet fuel.

    Famous for its ability to play the oil markets to lock in low fuel costs, Southwest made some bad bets in late spring and summer. Now, it's paying a heavy price just when it should be celebrating lower costs. A $189 million loss on fuel contracts put the company in the red for the first time in 17 years.

    Southwest isn't alone. Though plunging oil prices have been a silver lining for the ailing economy, many companies are still covering high costs they locked in months or weeks ago.

  •  U.S. Economy: GDP Shrinks (0+ / 0-)

    U.S. Economy: GDP Shrinks at Fastest Pace Since 2001 (Update2)

    By Rich Miller and Shobhana Chandra

    Oct. 30 (Bloomberg) -- The economy suffered its biggest decline since 2001 in the third quarter, ushering in what may be the worst recession in a quarter-century and boosting the chances of Barack Obama and fellow Democrats in next week's elections.

    Gross domestic product contracted at a 0.3 percent pace from July to September, according to a Commerce Department report today in Washington. The decline was smaller than forecast and stocks rose. Even so, the economy may be in for a larger drop this quarter after the record two-decade expansion in consumer spending came to an end.

    ``The crisis really kicked up in late September,'' Ethan Harris, co-head of U.S. economic research at Barclays Capital Inc. in New York, said in a Bloomberg Television interview. ``We're going to be looking at a very unfriendly GDP number in the fourth quarter, with a drop of 2 to 4 percent.''

  •  U.S. Commercial Paper Soars (0+ / 0-)

    U.S. Commercial Paper Soars Most on Record as Fed Becomes Buyer

    By Bryan Keogh

    Oct. 30 (Bloomberg) -- Corporate borrowing in the U.S. commercial paper market soared the most on record after the Federal Reserve began buying the debt directly from issuers as part of its effort to lure back money-market investors.

    U.S. commercial paper outstanding rose by $100.5 billion, or 6.9 percent, to a seasonally adjusted $1.55 trillion for the week ended Oct. 29, the Fed said today in Washington. It was the first gain in seven weeks, reversing a 20 percent decline during the previous six weeks.

    ``Confidence is coming back,'' said Peter Crane, president of Crane Data LLC, a money-market research firm based in Westborough, Massachusetts. ``Knowing the Fed will buy the longer term means companies will be able to refinance and take back their short-term paper if need be.''

    •  AIG Rescue May Expand With Commercial Paper Plan (0+ / 0-)

      AIG Rescue May Expand With $20.9 Billion Commercial Paper Plan
      By Hugh Son

      Oct. 30 (Bloomberg) -- American International Group Inc., the insurer that has a $122.8 billion credit line from the U.S., asked for $20.9 billion under the Federal Reserve's commercial paper program designed to unlock short-term debt markets.

      Four affiliates of the New York-based insurer have applied for the program, which swaps commercial paper for cash, AIG said today in a regulatory filing. The proceeds will help refinance AIG's outstanding commercial paper and pay down AIG's original $85 billion loan from the Fed, the company said.

      •  Fed Adds $21 Billion to Loans for A.I.G. (0+ / 0-)

        By MARY WILLIAMS WALSH
        Published: October 30, 2008

        The American International Group said Thursday that it had been given access to the Federal Reserve’s new commercial paper program, allowing it to reduce its reliance on a costlier emergency loan from the Fed.

        The company said it would be able to borrow up to $20.9 billion under the new program, raising its maximum available credit from the Fed to $144 billion under three different programs. The credit includes an earlier emergency loan of $85 billion from the Fed that carries a much higher interest rate.

        A.I.G.’s big borrowings underscore the company’s bewilderingly rapid decline. When it suddenly faced a cash crisis in mid-September, the original estimate of the amount it needed was just $20 billion. A few days later, the Fed stepped forward with its $85 billion credit line. And now, the stunning size of that original bailout has grown by almost 70 percent.

  •  Maid-Turned-Realtor Ran Vegas Mortgage Scam (0+ / 0-)

    Maid-Turned-Realtor Ran Vegas Mortgage Scam, Prosecutors Say
    By Anthony Effinger

    Oct. 30 (Bloomberg) -- Eve Mazzarella was a Las Vegas success story.

    The dream ended at about 5 a.m. on March 13, when federal agents smashed through the door of a stucco home on a quiet, grassy cul-de-sac looking for Mazzarella, 31, and her husband, Steven Grimm, 45, an erstwhile mortgage broker.

    The day before, the U.S. Attorney for Nevada had indicted the couple on 6 counts of bank fraud, later revised to 13. Prosecutors say the pair recruited fake -- or ``straw'' -- buyers to apply for loans to purchase 227 properties worth $107 million. They told the straw buyers they would pay the mortgages. Then they skimmed thousands of dollars from each of more than 432 transactions, the indictment says, stashing the cash in 80 bank accounts.
    ...

    They allegedly arranged fake sales on some houses five times. Then, according to the indictment, they walked away from the mortgages, leaving lenders in the lurch.

    If prosecutors are right, Mazzarella and Grimm were the Bonnie and Clyde of mortgage fraud -- among the greediest of a band of swindlers who took advantage of lax lending standards at profit-hungry banks, which stopped verifying income and assets for even questionable borrowers.

  •  Greenspan Slept as Off-Books Debt Escaped Scrutin (0+ / 0-)

    Greenspan Slept as Off-Books Debt Escaped Scrutiny (Update1)

    By Alan Katz and Ian Katz

    Oct. 30 (Bloomberg)

    The bankers were warned that a Financial Accounting Standards Board plan would force trillions of dollars back onto balance sheets, requiring cash reserves to soar. Their business of pooling and reselling assets had dropped 47 percent in the first six months of the year, and the industry couldn't afford another setback.

    The next day, Miller, 39, the forum's executive director, took that message from North Carolina to a Senate hearing in Washington examining the buildup of off-balance-sheet assets. ``There are great risks to the financial markets and to the economy of moving forward quickly with bad rules,'' he said of FASB's proposal.

    Miller was trying to preserve an accounting rule for off- the-books assets that helped U.S. banks export toxic debt around the world. It is a loophole that Jack Reed, the Rhode Island Democrat who chairs the Senate securities subcommittee, said had contributed ``to the severity of the current crisis.''

    The damage to date: more than $680 billion dollars in losses and writedowns, about one-third of that by European banks.

  •   Laszlo Birinyi Sees No Precedent to Gauge Market (0+ / 0-)

    Bloomberg interview

    I have no idea [how long and how bad recession will be].  We have a very unique circumstance here.  For one thing this is probably the first bear market I can recall where all the markets are down.  So not just stocks, but also bonds, municipals, commodities, and all the like.

    So we have a financial marketS crisis.  Therefore you have no precedent on which to base some future guess or estimate upon.

    ... We've looked at a lot of things, but there's really nothing that we really can hang our hat on, nothing that we can point to with some confidence and say, Look:  this is like this and this is like that.  And so, in a case like that I think you just have to wait it out until you do start to get something tangible that you can feel comfortable about and that you can predict upon.  

    But right now, I think you're guessing.  

  •  Roubini, Johnson Call for Second U.S. Stimulus (0+ / 0-)

    Roubini, Johnson Call for Second U.S. Stimulus Package

    Well worth watching congressional meeting.

  •  Schumer Asks Paulson to Explain Tax Rule (0+ / 0-)

    Schumer Asks Paulson to Explain Tax Rule Sparking Bank Mergers

    By Ryan J. Donmoyer

    Oct. 30 (Bloomberg) -- New York Senator Charles Schumer asked Treasury Secretary Henry Paulson to justify a tax ruling that helped spur Wells Fargo & Co. to buy Wachovia Corp., saying Congress wasn't consulted on the change.

    Schumer, a New York Democrat, said the Sept. 30 ruling may lead to unnecessary tax-motivated consolidation that wouldn't help stabilize the financial-services industry. The ruling may cost taxpayers as much as $140 billion, according to an estimate by the law firm Jones Day.

    ``I am concerned that the notice, which was never debated by Congress, could end up costing taxpayers tens of billions of more dollars on top of the hundreds of billions of dollars already approved by Congress in the financial rescue plan,'' Schumer said in a letter to Paulson.

    ``I also fear that the notice could have the unintended consequence of motivating more financial firms wanting future tax deductions to shelter their earnings to buy competitors, leading to more consolidation in the financial industry than would be necessary to restore stability in the financial sector.''

  •  Russian economy 'won't be nationalized' (0+ / 0-)

    Russian economy 'won't be nationalized'
    Thu, 30 Oct 2008 01:53:32 GMT

    SM/RE

    Russian Prime Minister Vladimir Putin has ruled out any possibility that the Russian economy would be nationalized.

    "I would like to stress that imposing state controls on Russia's economy is not, cannot be, and will not be our task. Increasing the state's presence in the economy is a forced measure and is temporary," Putin told an economic conference on Wednesday, RIA Novosti reported.

    "Half measures will not bring the desired result," he added.

    Russia has suffered as a result of the global credit crisis and its' stock markets have lost around two thirds of their value since their May highpoints.

    This resulted in the government and the Central Bank taking urgent measures to inject billions of US dollars into the domestic stock market to support the liquidity of leading market players.

    •  Russia reserves drop past $500 bn as rescue takes (0+ / 0-)

      Russia reserves drop past $500 bn as rescue takes off
      30 Oct, 2008, 1518 hrs IST, REUTERS

      MOSCOW: Russia's gold and foreign exchange reserves fell below the $500 billion mark for the first time in eight months, data showed on Thursday, suggesting the Kremlin's cash is starting to flow into the economy.

      The central bank data showed reserves fell to $484.7 billion on Oct. 24 from $515.7 billion the previous week. Traders told Reuters the central bank spent $13 billion propping up the rouble during the last week.

      The euro, which accounts for about 40 percent of Russia's reserves, weakened by 6 percent against the dollar, which accounts for about 49 percent. That also contributed to the fall of reserves, whose total value is calculated in dollars.

      •  Financial crisis shakes the Kremlin (0+ / 0-)

        By Judy Dempsey
        Published: October 29, 2008

        BERLIN: President Dmitri Medvedev of Russia was supposed to have given his first State of the Union address a week ago.

        It was long overdue and eagerly awaited, especially since Medvedev had been making the rounds of several European cities since taking office last May to tout Russia's new foreign policy.

        In Berlin and in the French city of Évian, Medvedev had set out his proposals for a new European security system. Part of the context was NATO's plans to expand further eastward, eventually admitting Georgia and Ukraine, and the Pentagon's decision to deploy part of its anti-missile shield in Eastern Europe. Medvedev made it clear that the Kremlin opposed both developments.

        The more interesting aspect of his proposals was the need to modernize the security structures established during the Cold War. These include NATO and the Organization for Security and Cooperation in Europe with the United States playing a big role in both.

    •  Russia military offers Cuba air defence aid (0+ / 0-)

      Russia military offers Cuba air defence aid

      Monday, October 27 10:49 am
      Reuters

      Russia will offer to share its air defence expertise with Cuba when a military delegation visits the Caribbean island this week, Interfax news agency reported on Monday.

      "The Russian and Cuban military will exchange experience in organising tactical air defence and in training officers," Interfax quoted Russian Land Forces spokesman Igor Konashenkov as saying.

      The two sides will "discuss the prospect of training Cuban servicemen at the tactical air defence academies and training centres in Russia, using upgraded Russian-made military hardware," Interfax quoted him as saying.

      The delegation, led by the chief of Russia's tactical air defence headquarters, Lieutenant General Alexander Maslov, will also look at "ways to strengthen relations between the Russian armed forces and the Revolutionary Armed Forces of Cuba," Konashenkov was quoted as saying.

      •  Russia, Cuba to boost military ties (0+ / 0-)

        Russia, Cuba to boost military ties
        A Russian military delegation is to visit Cuba this week to discuss cooperation in the field of air defense with the Caribbean nation.
        28 Ekim 2008 Salı 22:02

        Russia has been increasing its military ties with some Latin American countries following the Caucasus conflict where Moscow's military attempt to curb a Georgian offensive against South Ossetia drew wide criticism from the West, and prompted Washington to deploy its warships in the region.

        Moscow has also been cooperating with Venezuela, another outspoken Washington critic, planning a joint naval game with the country between Nov. 10 and 14.

        •  Cuba to present condemnation of blockade to the U (0+ / 0-)

          Havana.  October 28, 2008

          Cuba to present condemnation of blockade to the UN

          FOREIGN Minister Felipe Pérez Roque is in New York to present to the United Nations, on Wednesday October 29, Cuba’s resolution titled "The Necessity of Ending the Economic, Commercial and Financial Blockade Imposed by the United States of America against Cuba."

          For the 17th time, the international community will have an opportunity to once again express its condemnation of the genocidal blockade policy maintained by the U.S. government against our country for almost 50 years.

          The blockade is the principal obstacle to our country’s economic and social development and a flagrant violation of the human rights of all of Cuba’s people. Cuba will continue to demand that it be lifted and will not cease its efforts until the blockade is eliminated.

  •  Financial crisis 'most severe in living memory' (0+ / 0-)

    Financial crisis 'most severe in living memory', Bank of England warns

       * Kathryn Hopkins
       * guardian.co.uk,
       * Tuesday October 28 2008 11.58 GMT
       

    The current financial crisis is the "most severe in living memory", the Bank of England said today.

    Sir John Gieve, deputy governor, said that despite moves to bail out banks both here and the US, there could be more turmoil to come. The financial health of insurance companies and hedge funds are among the areas of concern.

    "The package of measures introduced in the UK and elsewhere has improved the prospects significantly, especially for banks but it is too soon to declare the crisis over," he said in a speech to the British Bankers' Association.

    "Authorities worldwide need to remain vigilant and to be ready to step in again if necessary."

  •  Mubarak sounds warning on Egyptian economy (0+ / 0-)

    Mubarak sounds warning on Egyptian economy

    1 day ago

    PARIS (AFP) — Egyptian President Hosni Mubarak warned on Wednesday that his country faces a drop in revenues from tourism and Suez Canal transit fees as a result of the world financial crisis.

    Speaking in Paris after a working lunch with his French counterpart Nicolas Sarkozy, Mubarak said Egypt was better placed than some countries to weather the economic storm but he was nevertheless concerned.

    "We risk problems with our imports, and also with revenue from tourism and revenue from the Suez Canal," he said. Egypt charges vessels using the Suez route between the Indian Ocean and the Mediterranean a transit fee.

    While Mubarak played down the danger, tourism and the canal are the main pillars of the economy of Egypt, the Middle East's most populous country.

  •  Iran: Ahmadinejad accuses US of circulating 'fals (0+ / 0-)

    Iran: Ahmadinejad accuses US of circulating 'false' dollars

    Tehran, 29 Oct. (AKI) - Iranian hardline President Mahmoud Ahmadinejad has accused the United States of putting 'false' or worthless dollars into circulation. The US "flooded the world with false dollars. Dollars that no longer have a value, due to the US government's deficit of 10,570 billion dollars," said Ahmadinejad who is on a trip to the western Iranian region of Lorestan.

    ...

    Ahmadinejad also said that Americans had exploited other populations so much that it had left their countries and economies exposed to the global downturn.

    When you think about what the SIV's, CDS's, hollowed out securities, etc are, it's not far off to call them false dollars, unfortunately.

    •  Cleric says Iran cannot gloat in financial crisis (0+ / 0-)

      Cleric says Iran cannot gloat in financial crisis

      Reuters
      Published: 10.24.08, 19:30 / Israel News

      'First negative consequence of West's economic crisis is fall in oil prices,' Former Iranian President Rafsanjani says, 'we have to be alert and cooperate with each other to contain negative results'

      An influential cleric said on Friday Iran should not gloat over the West in its financial crisis because one of the major consequences - tumbling oil prices - was also hurting the No. 2 OPEC producer.

      Former President Akbar Hashemi Rafsanjani's comments at Friday prayers in Tehran reflect mounting concern about prices that have more than halved since July. A central bank official said even before the latest slide that the drop rang an "alarm bell."

      ...

      "We should not think the financial crisis that hit the world is in our interest and so on and express joy," Rafsanjani, who heads a powerful clerical body, said in comments on state radio.

      "It should not be that some say the crisis is very good for us and it is a miracle coming from God to punish them (the West)," said the cleric, who also said in September Washington was paying for its past policy mistakes.

      :: :: ::

      Separate news:
      Iranian Elections
      Report: Ahmadinejad may not run for president again  / Dudi Cohen
      Following reports that Iranian leader's health is failing, local website quotes Ahmadinejad associates as saying he may not take part in 2009 presidential elections due to exhaustion

      •  Court annuls EU assets freeze on Iranian group (0+ / 0-)

        Court annuls EU assets freeze on Iran opposition group

        Oct 23, 2008

        BRUSSELS (AFP) — A European court on Thursday annulled an EU decision to freeze the assets of the main Iranian opposition in exile, though the group remains on the terror list for the time being.

        The Court of First Instance ruled that the EU had "failed to give sufficient reasons" to keep the People's Mujahedeen of Iran (PMOI) on the list, following a British court decision to remove them from its national list.

        ...

        For the time being however, the group remains on the current version of the EU terror blacklist. The EU terror list is only updated every six months and Thursday's court ruling refers to an EU decision in December 2007, not the current list.

        The European Council of member states in July placed the Iranian opposition group on its latest terror list, citing "new information" on the group, which has not been made public.

  •  Italy Is Ready to Commit Funds to Banking Sector (0+ / 0-)

    Italy Is Ready to Commit Funds to Banking Sector
    By LUCA DI LEO and CHRISTOPHER EMSDEN

    ROME -- Italian Premier Silvio Berlusconi said Wednesday the government was prepared to buy bank bonds and savings shares to help lenders cope with the global financial crisis.

    Of the four big European economies, Italy is the only country yet to give state money to help its banks. The government maintains its banks are more solid than their European peers, and that it will only step in if needed, a ...

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  •   Merkel Wants New Financial Rules Within A Year (0+ / 0-)

    Merkel Wants New Financial Rules Within A Year

    javno.com

    Merkel also said she expected Europe to push its views forcefully in the talks, which will include leaders from the so-called G20 nations.

    World powers meeting in Washington next month should agree to establish new rules for the global financial system within a year, German Chancellor Angela Merkel said on Wednesday.

    Speaking at a conference in Berlin hosted by the German exporters association (BGA), Merkel also said she expected Europe to push its views forcefully in the talks, which will include leaders from the so-called G20 nations.

    "We must agree a clear mandate for negotiations that should not last longer than a year," Merkel said.

    The White House has said the Nov. 15 summit will be the first in a series at which major nations will discuss reforms to the financial system. The meeting comes in the midst of the worst financial crisis in nearly 80 years.

    Speaking at the same conference, German Finance Minister Peer Steinbrueck spoke of a window of opportunity for creating new rules for the financial system and cautioned that a change in government in the United States should not delay their implementation.

  •  World Economic Forum meets in Turkey (0+ / 0-)

    World Economic Forum meets in Turkey
    Associated Press 10.30.08, 5:55 AM ET

    ISTANBUL, Turkey -

    The World Economic Forum opened a regional meeting in Turkey on Thursday that organizers hope will shape solutions to the global economic crisis.

    The three-day meeting, which ends Saturday, will also focus on business opportunities that might arise from the crisis, energy and resources security, Central Asia's role in the world and Turkey's position as a bridge among Europe, Asia and the Middle East.

    "We are really looking at options of how to get the global economy's engine started" once the crisis eases, said Borge Brende, managing director of the forum and Norway's former minister of trade and industry.

  •  In pictures: Not so good w/ Money (0+ / 0-)

    For those who like a little schadenfruede, these pictures might do the trick.:

    Financial blunders are an everyday occurrence, but a few stand out because they either lead an individual to ruin or because they bring down innocents with them. In 19th century San Francisco a man named Joshua Norton became the legendary Emperor Norton after losing his mind when he lost his shirt on a rice investment gone bad. He became a local celebrity who lived the rest of his life penniless but was treated (mostly) like royalty by the tolerant people of the Bay Area.

    Folks haven't been so friendly to Alan Greenspan. Once known as "The Maestro," he was badly treated by the House Committee of Government Oversight and Reform. The once-confident ruler of the economy found himself browbeaten into admitting that he'd make some important mistakes. Just a few years ago Greenspan's reputation as a financial genius seemed assured. Now he's lumped in with other Federal Reserve failures like Marriner Eccles and William Miller. Paul Volcker is the hero now.

  •  How Capitalism Will Save Us (0+ / 0-)

    Steve Forbes 10.22.08, 6:00 PM ET
    Forbes Magazine dated November 10, 2008

    We are experiencing the devastating consequences of a chain of major economic policy errors, which, to use a current clich??, created the perfect storm. These government blunders temporarily paralyzed the global credit system and are now sending the U.S. and Europe into recession, while sharply cutting back Asia's growth rates.

    Left to its own devices, the credit crisis, which began in August 2007, would have crushed economies as severely as did the Great Depression.

  •  Spies Spill: We Spent $47 Billion Last Year (0+ / 0-)

    By Noah Shachtman October 28, 2008 | 11:26:00 AMCategories: Cash Rules Everything Around Me, Cloak and Dagger, Money Money Money  

    For a long time, the country's intelligence budget was considered so sensitive, the spies refused to give taxpayers even a rough, top-line estimate of how much of their money was being spent. But last year, Congress forced the spooks to be just a little forthcoming. Which is why the Office of the Director of National Intelligence (ODNI) today revealed that the spy agencies spent $47.5 billion during the past year -- a jump of nearly 10% over 2007.

    The admission may not seem like a big deal. But even this limited information has some value. "The disclosure shows that even after a decade of sharp increases, intelligence spending continues to grow significantly," says Steven Aftergood, a long-time intelligence observer with the Federation of American Scientists.

  •  It Was 79 Years Ago Today (0+ / 0-)

    Robert Lenzner 10.29.08, 2:30 PM ET

    It was 79 years ago today--Oct. 29,1929--that will live in infamy, as Dec. 7, 1941, and Sept. 11, 2001, will be remembered throughout American history as dates of events that brought the most profound changes to our nation.

    We have already experienced violent sell-offs in stock markets that have lost roughly 40% of their value in the U.S.; in emerging markets like China and Russia, some 70% of market value has been wiped out since the peak.

    The boom years--from October 2002, the bottom of the last bear market, to the peak in October 2007--have been largely busted. What's profoundly different from 1929 is the global cast of our current meltdown. Every morning, we rise to hear of a bailout in Korea, the Ukraine or Kuwait; runs on pension funds in Argentina, the inability of Mitsubishi UFJ (nyse: MTU - news - people ) to come up with $9 billion for Morgan Stanley (nyse: MS - news - people ); the disquieting short squeeze on Volkswagen (other-otc: VLKAF.PK - news - people ).

    Still to come are the losses on credit card paper and auto loans, the bankruptcies of some private equity deals, the obliteration of high-flying hedge funds and the sad financial demise of newspaper publishers holding junk-rated debt. Don't forget to factor in the difficult straits of state pension funds and the rolling rise in unemployment.

  •  Bolivians worry spat with US could kill jobs (0+ / 0-)

    Secretary of State Condoleezza Rice suspended a trade deal with Bolivia last week for failure to rein in coca growing. Some 50,000 jobs could be lost.

    By Eliza Barclay | Correspondent of The Christian Science Monitor

    from the October 28, 2008 edition

    La Paz, Bolivia - To Marga Targui, an indigenous woman who irons T-shirts for American firms like Ralph Lauren and Abercrombie & Fitch, the increasingly bitter diplomatic spat between the United States and Bolivia is a menace that cloaks her boisterous factory with tension.

    Here among the concrete slums perched over Bolivia's capital, La Paz, any job is precious, especially one with benefits and paid vacation like Ms. Targui's.

    "We want to work and we want job protection," says Targui between rhythmic hisses of the iron. "There may be something going on at the embassy, but we want Bolivia and the US to be united. As enemies you don't gain anything."

    •  Colombia finds 10 tons of cocaine (0+ / 0-)

      Colombia finds 10 tons of cocaine in one of the biggest seizures in history
      Colombian authorities have found more than 10 tons of cocaine worth $200 million (£125 million) in the Caribbean city of Barranquilla, ready to be shipped to Mexico.

      By Jeremy McDermott in Medellín
      Last Updated: 6:10PM GMT 26 Oct 2008

      The Colombian police chief, General Oscar Naranjo said that the drug consignment was put together by one of the country's top drugs traffickers, Daniel Barerra, whose alias is The Madman.

      "We can categorically state that this seizure of 10 and a half tons of cocaine is a mighty blow to the criminal gang led by the Madman Barerra," said General Naranjo, standing in the middle of thousands of kilo bricks of cocaine.

      The drugs, seized after a six-month intelligence operation which tracked a drug route up to Barranquilla, were hidden among boxes of children's toys. They were being moved in two containers travelling on trucks that were about to be put on a ship and dispatched to the Mexican city of Veracruz.

      •  Ecuadorian police seize more than 1,480 kg of coc (0+ / 0-)

        Ecuadorian police seize more than 1,480 kg of cocaine
        www.chinaview.cn 2008-10-28 10:19:56   Print

           

        QUITO, Oct. 27 (Xinhua) -- Ecuadorian Anti-narcotics Police seized more than 1,480 kg of cocaine and detained four Ecuadorians near the Galapagos Islands, about 1,000 km off the coast of Ecuador's mainland, Anti-narcotics chief Freddy Martinez said on Monday.

           The operation called "Maremoto (seaquake)" took place in the waters about 230 nautical miles (about 426 km) off the San Cristobal Island, when two small boats named "Dorado" and "Albacora" respectively were transporting 1,482.762 kg of cocaine.

  •  IMF Creates $100 Billion Fund to Aid Crisis Fight (0+ / 0-)

    IMF Creates $100 Billion Fund to Aid Crisis Fight
    By BOB DAVIS, MARCUS WALKER and JOHN LYONS

    The International Monetary Fund will offer as much as $100 billion in a new kind of loan to countries that are battered by the financial crisis, making available new cash to help ease the world credit crisis.

    The International Monetary Fund has approved short-term financing to help emerging market economies weather the global financial storm. Video courtesy of Reuters. (Oct. 30)

    The new three-month loans, aimed at economies the IMF judges to be troubled but basically sound, wouldn't require countries to make the often severe changes in their policies that the IMF has demanded for decades.

  •  UN: Israel violated Geneva Conventions (0+ / 0-)

    UN: Israel violated Geneva Conventions
    By ALLISON HOFFMAN, JPOST CORRESPONDENT IN NEW YORK

    The UN's special rapporteur on human rights in the territories has accused Israel of failing to halt settlement expansion in keeping with the Annapolis protocols and of violating the Geneva Conventions in Gaza.

  •  Financial crisis puts UN achievements at risk (0+ / 0-)

    Last Updated: Saturday, October 25, 2008, 09:15
    Financial crisis puts UN achievements at risk - Ban

    UN Secretary General Ban Ki-moon has said the global financial crisis jeopardised everything the United Nations has done to help the world's poor and hungry.

    "It threatens to undermine all our achievements and all our progress," Mr Ban told a meeting of UN agency chiefs devoted to the crisis. "Our progress in eradicating poverty and disease. Our efforts to fight climate change and promote development. To ensure that people have enough to eat."

    At a meeting also attended by the heads of the World Bank and International Monetary Fund, Mr Ban said the credit crunch that has stunned markets worldwide compounded the food crisis, the energy crisis and Africa's development crisis.

    "It could be the final blow that many of the poorest of the world's poor simply cannot survive," he added, in one of his bleakest assessments of the impact of the financial turmoil.

  •  Rudd and Swan flounder in mess of own making (0+ / 0-)

    DAVID BARNETT
    30/10/2008 9:29:00 AM

    What do you call it when unemployment starts rising and formerly sound financial institutions shut their doors to depositors and refuse to return their money. Some 75 or 80 years ago, we called it a depression.

    Is it really a depression? Well no, it is not, because this is not the result of the world credit crisis, but the consequence of our very own Jim Hacker's failure to grasp a few simple facts.

    Would that Kevin Rudd and Wayne Swan were less brave, more cautious and listened to our Sir Humphreys. Perhaps then we would have guaranteed all deposits with all financial institutions, with a cap on the guarantee. We would not then have had a large front-page photograph of self-funded retirees Don and Gail Reid, who have seen the value of their share portfolio bank shares drop by one-third and their deposits totalling $200,000 in fund managers AXA frozen.

    That has nothing to do with subprime housing loans in the United States, and everything to do with the ineptitude of Rudd and Swan, who include a 29-year-old political adviser in their crisis discussions, but omit the governor of the Reserve Bank, Glenn Stevens, who seems to be out of the loop.

  •  Australian bank criticised over corporate excess (0+ / 0-)

    Australian bank criticised over Philippines cyanide mine

    Updated October 25, 2008 11:30:07

    An aid organisation has criticised the ANZ Bank for failing to take action after a mine that it financed in the Philippines devastated the local environment.

    Oxfam says spillages of cyanide-laden waste from the mine have contaminated local seas, killing fish and destroying the economy of Rapu Rapu island.

    Oxfam spokeswoman Shanta Martin says the bank continued to support the Australian-owned mine even after the community had voiced its concerns.

    "There needs to be greater regulation of these sort of situations," she said.

    "What we're all seeing with the current financial crisis is that there's been a real failure in terms of making sure that there is regulation over corporate excess."

  •  Former Indonesian central bank governor jailed (0+ / 0-)

    Updated October 29, 2008 22:00:32
    Former Indonesian central bank governor Burhanuddin Abdullah jailed for five years. [Reuters]

    A relative of Indonesian President Susilo Bambang Yudhoyono has been named a suspect in a graft case that has engulfed the central bank.

    Aulia Pohan, the father-in-law of President Yudhoyono's son Agus Harimurti, was declared a suspect along with three other deputy governors of central Bank Indonesia.

    They are accused of using US$10.3 million in bank funds to bribe lawmakers and hire lawyers to defend colleagues from corruption allegations.

  •  Germany says Pakistan needs IMF loan within week (0+ / 0-)

    Germany says Pakistan needs IMF loan within week

    By STEPHEN GRAHAM – 2 days ago

    ISLAMABAD, Pakistan (AP) — Pakistan must secure a loan from the International Monetary Fund within a week, the German foreign minister said Tuesday, as the country scrambles for aid to avert a run on its currency and a default on its international debt.

    Without help, the fight against terrorism in the nuclear-armed nation could be complicated by out-of-control price increases, fewer jobs and rising public anger in the country of 160 million people.

    German Foreign Minister Frank-Walter Steinmeier said Tuesday that Pakistan's problems were so urgent it had no choice but to seek an IMF loan.

    "I can only hope that the decision is taken quickly, because a loan in six months or six weeks will not help, but only if it is approved within the next six days," Steinmeier told reporters after talks here with Pakistani officials. "Then one can perhaps avoid the most difficult situation in Pakistan."

    •  Pakistan accepts IMF conditions for financial aid (0+ / 0-)

      Report: Pakistan accepts IMF conditions for financial aid
      www.chinaview.cn 2008-11-02 18:28:44   Print

      Special Report: Global Financial Crisis

         

      ISLAMABAD, Nov. 2 (Xinhua) -- Pakistan has accepted 11 tough conditions from the International Monetary Fund (IMF) to overcome its pending balance of payment crisis, local newspaper reported on Sunday.

         The IMF had proposed 16 conditions for financial assistance to Pakistan during the talks in Dubai last month, and "11 of the 16 conditions have been accepted with slight changes," The News newspaper quoted a finance official as saying.

         Pakistan is lobbying for possible financial help from friendly countries and financial institutions as it faces severe economic difficulties with plunging foreign exchange reserves and high inflation.

      •  Pakistan warns US over missiles (0+ / 0-)

        Monday, 3 November 2008
        Pakistan warns US over missiles

        Pakistan's president has warned the new head of US Central Command that missile strikes on Pakistani territory are "counter-productive".

        President Asif Ali Zardari told General David Petraeus that such strikes were detrimental to the "war on terror".

        ...

        "Continuing drone attacks on our territory, which result in loss of precious lives and property, are counter-productive and difficult to explain by a democratically-elected government," President Zardari said.

        "It is creating a credibility gap," the state-run Associated Press of Pakistan quoted him as saying.

  •  Funding denied for FBI probe of mortgage crimes (0+ / 0-)

    Bush administration denies funding for FBI probe of mortgage mess
    Many more agents needed, official says

    By PAUL SHUKOVSKY AND DANIEL LATHROP
    P-I REPORTERS

    SEATTLEPI.COM

    # Green Light for Greed: # Terrorism Tradeoff:

    The Bush administration is rejecting FBI pleas for more agents to investigate crimes that helped trigger the global financial meltdown, bureau sources said this week.
    "They are bogged down big-time or there would be some indictments by now," said a recently retired bureau official who played a pivotal role in setting FBI policy after 9/ 11.

    The FBI's response to the meltdown stands in sharp contrast to past financial crises, he said. "There are three comparable things ... the S&L crisis, corporate fraud like Enron and health care fraud. There was a clear, well-delineated effort there. I don't see it here."

  •  Putin slams “economic egoism” (0+ / 0-)

    Putin slams "economic egoism"

    Vladimir Radyuhin

    MOSCOW: Russia’s Prime Minister Vladimir Putin on Thursday called for redesigning the global financial architecture to ensure stability and prosperity for the world economy.

    "The world has entered a momentous transition towards a multi-polar financial and economic system," said Mr. Putin at a meeting of the Shanghai Cooperation Organisation (SCO) at the level of Prime Ministers in Kazakhstan’s capital Astana on Thursday.

    Hitting out at "monopolism in global finances" and "economic egoism," Mr. Putin declared that Russia would work to "reform the global financial architecture to ensure effective stability, prosperity and progress in the world."

  •  Instability factors growing in the world--Wen (0+ / 0-)

    Instability factors growing in the world--Wen Jiabao
    itar-tass.com
    30.10.2008, 09.28

    MOSCOW, October 30 (Itar-Tass) - The present-day international situation in the world is characterised by instability, Wen Jiabao, Premier of the People's Republic of China (PRC) Council of State, maintains. He told Itar-Tass, "Really, factors of instability in the world are growing".

    In the opinion of the Chinese Head of Government, "All countries without exception must abide by the United Nations Charter and other norms of international law. All world affairs must be resolved jointly by various countries and peoples".

    The Premier is convinced that "Our planet, just as the entire human civilisation, just like nature, must be diverse. We cannot live on just one model (of relations)."

    "The PRC firmly and consistently comes out in favour of world diversity, the existence of various civilisations and cultures and in this matter China and Russia have broad common interests," Wen Jiabao said.

  •  Obama predicts ‘significant recession&rsqu (0+ / 0-)

    Obama predicts ‘significant recession’
    Next president’s job ‘a lot tougher,’ Democratic nominee tells NBC News

     Obama: Driving down a dead end
    Oct. 30: Barack Obama tells a Florida rally that John McCain has been in the passenger seat as George W. Bush drove the economy down.

    MSNBC

    SARASOTA, Fla. - Democratic presidential nominee Barack Obama said Thursday that the economy would get worse before it got better no matter who was elected president, telling NBC News that the next administration was likely to inherit a "significant recession."

    In an interview on "NBC Nightly News," Obama said, "I don’t think there’s any doubt" that the next president will have a tougher job than ever, because it is not possible to forecast how long the economic downturn could last.

  •  The 2008 landgrab for food and financial security (0+ / 0-)

    Seized: The 2008 landgrab for food and financial security

    GRAIN.org /
    Pdf

    Today’s food and financial crises have, in tandem, triggered a new global land grab. On the one hand, "food insecure" governments that rely on imports to feed their people are snatching up vast areas of farmland abroad for their own offshore food production. On the other hand, food corporations and private investors, hungry for profits in the midst of the deepening financial crisis, see investment in foreign farmland as an important new source of revenue. As a result, fertile agricultural land is becoming increasingly privatised and concentrated. If left unchecked, this global land grab could spell the end of small-scale farming, and rural livelihoods, in numerous places around the world.

  •  G8 Should Give Emerging States More Say (0+ / 0-)

    G8 Should Give Emerging States More Say, Says EU Proposal
    Reuters Oct 31, 2008

    BRUSSELS—Reforms of the Group of Eight (G8) club of major industrialised nations must be studied to give emerging countries more say, European Union president France has proposed to the bloc's finance ministers.

    "Further reform of the G8 should be considered to make this group more inclusive of emerging countries," the document, obtained by Reuters before it is due to be discussed at a regular meeting in Brussels next Tuesday, said.

  •  China’s Approaching Economic Crisis, Part I (0+ / 0-)

    ASEM Summit—China's Role
    China’s Approaching Economic Crisis, Part I
    By Maria Zheng and Florian Godovits

    Epoch Times German Staff Oct 29, 2008

    Asian Europe Meeting in China
    The latest ASEM Summit took place in Beijing. Some say China is headed for a financial crisis?

    GERMANY—Ludwigshafen Professor Joerg Rudolph, China and economics expert, does not believe China will be able to play a role in alleviating the worldwide financial crisis.

    He posits that the Middle Kingdom is dealing with its own veritable economic crisis, a statement many find difficult to accept. "China has hoarded its U.S. $1.9 trillion in reserves. The nation needs to replenish its bank reserves, because many of China’s banks are facing bankruptcy. That is why I think China's dollar reserves will not play any significant role in the international financial market." Dr. Rudolph is a lecturer at Ludwigshafen's Institute of Economics in the East Asia Section.

  •  Japan Defence Min. Sacks General Over WW2 Views (0+ / 0-)

    Japan Defence Minister Sacks General Over WW2 Views
    Reuters Oct 31, 2008

    Japanese Prime Minister Taro Aso has called General Tamogami's essay inappropriate.

    TOKYO—Japan's defence minister said on Friday he will sack the air force chief of staff for saying that Japan was ensnared into World War Two by the United States and was not an aggressor in the conflict in Asia.

    General Toshio Tamogami's essay, posted on the website of a Japanese hotel and apartment developer, was expected to rouse anger in China and South Korea, where memories of Japan's wartime acts and colonisation run deep.

    :: ::

    As a note of personal experience/witnessing:  The settlements from WW2 regarding Japan and various other Asian nations is still highly contentious.  There happens to billions of dollars of actual WW2 treasure that is still guarded in secret locations that is still disputed by Asian nations as to whom it belongs.  The views regarding culpability influence the final outcome of that treasure. (Honest to God.)

    •  Germany to Fight Court Ruling on Damages (0+ / 0-)

      History | 01.11.2008
      Germany to Fight Court Ruling on Damages for Nazi Crimes

      Großansicht des Bildes mit der Bildunterschrift:  The Casaglia cemetery in Italy where some victims of a Nazi massacre were buried in 1944

      Germany plans to contest an Italian court ruling to head off new claims for damages arising from Nazi atrocities during World War II, officials in Berlin said Saturday.

      "The government intends to obtain a clarification on the issue from the International Court of Justice," a foreign ministry spokeswoman said in Berlin.

      German news magazine Der Spiegel said Berlin planned to argue before The Hague court that sovereign actions by countries, including those of their armed forces, are protected under international law by sovereign immunity.

      Diplomats fear that the floodgates would otherwise be opened for "legal claims against historical injustice," in other countries as well. That would lead to "legal uncertainty around the globe," Der Spiegel quoted diplomats as saying.

      •  Nazi victim's family sues Germany over loot (0+ / 0-)

        Nazi victim's family sues Germany over looted art
        The case is unusual because it involves an entire collection, not individual works, and has been filed in a U.S. court.

        By CATHERINE HICKLEY, Bloomberg News Service

        Last update: November 1, 2008 - 5:58 PM

        The family of a Jewish art dealer killed at Auschwitz is suing Germany in the United States for damages incurred by the Nazis' confiscation of his collection, including paintings by El Greco, Pissarro and Rubens.

        Walter Westfeld was arrested in 1938 on currency violation charges, sent to prison and then to Auschwitz, where he was killed, probably in 1943.

        The lawsuit estimates that the value of Westfeld's collection would now be "tens of millions" of dollars.

  •   30 Contaminated Feed Samples Found in the U.S. (0+ / 0-)

    30 Contaminated Feed Samples Found in the U.S.
    The Epoch times Oct 31, 2008
    Tainted Products from China

    Tests have found melamine in 30 batches of animal feed from China.
    An international diagnostic testing lab, Romer Labs, reports that in the past 4-6 weeks they have found 30 samples of animal feed contaminated with melamine.

    According to the company’s CEO, Michael Prinster, the feed was all imported to the U.S. from China and came from the same company.

    Due to a confidentiality agreement, Prinster could not reveal the name of the company.

    •  International Emergency Meeting to Examine Melami (0+ / 0-)

      International Emergency Meeting to Examine Melamine
      Oct 31, 2008

      Tainted Products from China

      Worldwide recalls of products tainted with melamine have spurred the World Health Organization (WHO) to call a meeting of experts in Geneva. Over 50,000 illnesses have been blamed on contaminated milk in China, and contaminated products have been found throughout the world.

      Melamine is toxic to mammals, including humans, and can cause kidney stones, renal failure and death if doses are high enough. The industrial chemical appeared in pet food made in China, killing 1,000 pets in the U.S. in 2007. It has now been found in milk, added to give a false reading on the protein levels in milk and milk products.

      By artificially raising the protein levels in milk and milk products, milk producers are able to sell a diluted product, gaining greater profits.

      •  China overhauls feed makers post tainted milk/egg (0+ / 0-)

        China overhauls feed makers after tainted milk, egg scandals
        www.chinaview.cn 2008-11-02 13:05:03  

           BEIJING, Nov. 2 (Xinhua) -- China has carried out inspections on feed manufacturers nationwide to root out those found using excessive amounts of the chemical melamine after exposure of tainted milk and eggs scandals.

           The Agriculture Ministry has sent more than 369,000 inspectors to 250,000 feed producers. Inspectors clamped down 238 illegal feed makers and investigated 278 illegally-operating companies and farms, said Wang Zhicai, director of the ministry's husbandry and livestock division.

           A total of 3,682 tons of substandard feed were confiscated and destroyed, he said.

           A ministry rule issued on June 1, 2007 banned the use of melamine in feed production, he said.

           The melamine-tainted eggs produced by Dalian Hanwei Enterprise Group and found in Hong Kong is a separate case and using melamine in feed production is not an underlying industry rule, he added.

        •  Chinese Regulators Destroy Tons of Tainted Feed (0+ / 0-)

          Chinese Regulators Destroy Tons of Tainted Animal Feed

          By DAVID BARBOZA
          Published: November 2, 2008

          SHANGHAI — Chinese regulators said over the weekend that they had confiscated and destroyed more than 3,600 tons of animal feed tainted with melamine, an industrial chemical that has contaminated food supplies in China and led to global recalls of Chinese dairy products.

          In what appeared to be China’s biggest food safety crackdown in years, the government also said Saturday that it had closed 238 feed makers in a series of nationwide sweeps that involved more than 369,000 government inspectors.

          The aggressive moves come amid growing worries that the animal feed industry could be contaminated by melamine, endangering the national food supply and posing a health threat to consumers.

          ::

          The really sad and disgusting thing in this is that it takes water and grains to create all that feed.  Those are resources that could have been put to very good use during this time of rising food insecurity.

          Instead, to cut corners, all of it has been made unusable.  It's a real shame, and very sad.

  •  New worries grip Russian economy (0+ / 0-)

    By Andrew E. Kramer
    Published: October 31, 2008

    MOSCOW: At the start of the global financial crisis, the Russian authorities insisted they had ample cash reserves to weather any storm. But as sorrow has succeeded sorrow — plummeting oil prices, a 70 percent descent in stock markets here, a global credit crisis and a slow-motion bank run on this country's private banks — Russia has had to spend its reserves faster than anybody imagined.

    On Aug. 8, the reserves, which include foreign currency, gold and other assets, peaked at just under $600 billion, the third-largest in the world. By this week, they had fallen to $484 billion, as money flew out of government vaults to support the ruble, prop up the banking system and bail out the businesses of the rich Russians known as oligarchs.

    The fall this week — $31 billion — was the steepest so far. With no end to the global troubles in sight and a worldwide recession likely, which could further reduce oil prices, the question is: How long can Moscow keep this up before its reserves grow thin?

    Dark pictures are easy to paint. If oil prices continue to fall, the rising expectations that Russians have had for the last several years — the most prosperous in generations — will be foiled.

  •  Oil's stunning retreat: How long can it last? (0+ / 0-)

    Oil's stunning retreat: How long can it last?
    By Jad Mouawad
    Published: October 28, 2008

    While consumers can cheer the drop, producers have been alarmed at the sudden downturn in their fortunes. Fears of a global slowdown have kicked off a down cycle in the oil sector: It is unclear how long it will last and how low prices will go.

    As oil gets caught in the wild gyrations of the financial meltdown, three major questions loom over the oil markets for next year.

    What will happen to oil consumption in the United States and in China? How will producers respond to lower prices? Can the oil cartel OPEC stop the slide in prices?

  •   Capitalism in crisis (0+ / 0-)

    By Lee Hudson Teslik

    As this year's financial woes spread beyond Wall Street to engulf much of the world's economy, the contours of debate over the crisis have also broadened. First narrowly defined around loans and bailouts, the debate has morphed into a wholesale reconsideration of the capitalist model and free-market economic orthodoxy. ""Laissez-faire is finished,"" said French President Nicolas Sarkozy in a recent speech. ""The all-powerful market that always knows best is finished.""

    Sarkozy's notion is grounded in the events of recent weeks. Developed economies that had espoused a hands-off economic approach have undertaken economic interventions of historic proportion. This interactive graphic from the Financial Times shows the global extent of this shift. The United States, most countries in western Europe, Japan, and South Korea have all funded private banks through recapitalizations. A handful of countries, including the United States, took the more radical step of buying assets directly from private firms. A much broader swath of countries have engaged in other forms of intervention that range from guaranteeing bank deposits to cracking down on short-selling to attempting to boost private lending markets.

  •   Global financial crisis hitting African economie (0+ / 0-)

    Global financial crisis hitting African economies
    www.chinaview.cn 2008-10-31 05:24:11   Print

       

    KAMPALA, Oct. 30 (Xinhua) -- Economic experts meeting here on Thursday warned that African economies have started feeling the impact of the global financial crisis with some pulling down their estimated growth.

       The experts who were meeting in a one-day international conference aimed at discussing impediments to Africa's economic growth said its is not yet known how grave the impact will be since the crisis is still on going.

       "The crisis is itself still unfolding, it may be too early to make full assessment of this crisis on African countries," said Louis Kasekende, chief economist of the African Development Bank.

      Kasekende said that African countries should maintain regulating their financial sectors unlike the developed countries which are now facing the brunt of the crisis.

       "My plea to all countries is that we should not give up implementing very strong reforms leading to very strong macro economic frameworks that will promote more flexibility to mitigate the effects of the crisis on countries," said Kasekende.

  •  Turkey, IMF discuss precautionary stand-by deal (0+ / 0-)

    UPDATE 3-Turkey, IMF discuss precautionary stand-by deal
    Thu Oct 30, 2008 10:19am EDT

    By Tolgahan Ozkan and Alexandra Hudson

    ISTANBUL/ANKARA, Oct 30 (Reuters) - Turkey is continuing talks with the International Monetary Fund on a precautionary stand-by agreement, Economy Minister Mehmet Simsek said on Thursday after an IMF delegation left the country.

    Turkey's previous $10 billion IMF stand-by deal -- which stipulated conditions related to loans -- expired in May and an IMF team had been in Ankara for post-programme monitoring and talks on a possible new deal since mid-October.

  •  Lula Demands New World Economic Order (0+ / 0-)

    Lula Demands New World Economic Order

    Friday 31 October 2008, San José, Costa Rica

    SAN SALVADOR -  Brazil's president Luiz Inácio Lula da Silva, blamed the First World for the financial crisis and demanded the voice of poor countries be heard when a new world economic order is designed.

    Poor nations "are victims and not guilty" for the crisis, he stressed in his speech before the 18th Iberoamerican Summit being held today in this capital.

    ...

    Lula explained the collapse of global markets will not be contained without an effort of international coordination and "that effort will be unjust if developing countries are not taken into account."

    •  World economic crisis casts shadow over Ibero-Ame (0+ / 0-)

      World economic crisis casts shadow over Ibero-American summit
      www.chinaview.cn 2008-10-31 12:15:17   Print

      Special Report: Global Financial Crisis

         

      SAN SALVADOR, Oct. 30 (Xinhua) -- The theme of this year's Ibero-American summit being held here, "Youth and Development," was overshadowed at Thursday's plenary session by the global economic crisis.

         Worries over financial problems topped the agenda as participants at the session reflected on the current economic crisis.

         "It is the failure of a model established at the end of the 80s,which dominated the international stage during the 90s, known as neo-liberalism or Washington Consensus," said Argentine President Cristina Fernandez.

      •  Brazil plans to sign oil deal with Cuba (0+ / 0-)

        October 30, 2008 -- Updated 1932 GMT (0332 HKT)

        Brazil plans to sign oil deal with Cuba

        HAVANA, Cuba (AP) -- Brazil's state-run oil company plans to sign an agreement with its Cuban counterpart for deep-water exploration that would allow it to produce oil on the communist-run island, part of a two-day visit by President Luiz Inacio Lula da Silva beginning late Thursday.
        Brazilian leader Luiz Inacio Lula da Silva meets with Cuban President Raúl Castro in Havana in January.

        Brazilian leader Luiz Inacio Lula da Silva meets with Cuban President Raúl Castro in Havana in January.

        Lula da Silva was coming to Cuba after attending the IberoAmerican summit in El Salvador.

        Cuban authorities said he would preside over a signing ceremony between Brazil's Petrobras and Cuba Petroleo on Friday.

        The Communist Party newspaper Granma reported that both sides would "sign a contract for the production of hydrocarbons," but there were no further details.

  •  Iceland bank crisis could cost 85 pct of GDP (0+ / 0-)

    Iceland bank crisis could cost 85 pct of GDP
    Thu Oct 30, 2008 12:34pm EDT

    * Iceland banking crisis could end up costing country 1.1 trillion Iceland crowns .

    * Government debt, budget deficit to rise

    * Iceland hires lawyers for possible action vs British govt.

    By Omar Valdimarsson

    REYKJAVIK (Reuters) - Iceland's Prime Minister Geir Haarde said on Thursday the total cost of the country's banking crisis could amount to 1.1 trillion Icelandic crowns ($9.40 billion), or 85 percent of 2007 gross domestic product.

    According to a statement released by the prime minister's office, Haarde told parliament the 2009 budget deficit could be as high as 10 percent of economic output, pushing gross debt -- which stood at 29 percent of GDP at the end of 2007 -- above 100 percent by the end of next year.

  •  The End of Prosperity (0+ / 0-)

    by Stephen Lendman
    Friday, 31 October 2008

    This era of excess was as much about policy blunders and regulatory negligence as about mistakes by financial institutions. We need a new system and new role for the Fed that explicitly must include "financial stability."

    From too much of a good thing. From the 1980s and 1990s excesses. From the longest ever US bull market. Heavily manipulated to keep it levitating. From August 1982 to January 2000. An illusory reprieve from October 2002 to October 2007. Fluctuations aside, all lost in the past 12 months. The wages of sin are now due, and payment is being painfully extracted. From all nations globally. Affecting ordinary people the most who had nothing to do with creating booms and busts. They got little on the upside but are paying dearly for the down.

    Even "free-market" champions are unnerved.

  •  We need urgent action on economic crisis (0+ / 0-)

    We need urgent action on economic crisis, says bank chief

    Oct 31 2008 by Bill Gleeson, Liverpool Daily Post

    THE man whose signature appears on all Bank of England bank notes spoke about the global banking crisis in Liverpool last night.

    Andrew Bailey, the Bank of England's executive director of banking services and chief cashier, was at the Liverpool and District Institute of Financial Services celebratory annual dinner, attended by 400 guests, at the BT Convention Centre.

    Referring to the Government’s rescue of Britain’s banking sector earlier this month, Mr Bailey said: "In the final analysis, there are two things that matter for running banks successfully – adequate capital and adequate liquidity.

  •  French and Dutch bank rescue plans win EU approva (0+ / 0-)

    French and Dutch bank rescue plans win EU approval

    10 hours ago

    BRUSSELS, Belgium (AP) — French and Dutch programs to shore up the banking sector in the wake of financial turmoil won EU approval on Friday, the European Commission said.

    EU regulators must review large state payments to the private sector to make sure they don't damage competition by giving companies an unfair advantage over rivals.

    France has not followed other EU nations in guaranteeing bank loans, instead setting up a state-backed refinancing company — the SFRE — to dole out urgent loans to French banks finding it hard to secure credit on tight interbank markets.

  •  Demise of Reaganomics poses challenge to GOP (0+ / 0-)

    Demise of Reaganomics poses grave intellectual challenge to Republicans
    By Chrystia Freeland
    Thursday Oct 30 2008 15:05

    The big, existential problem for Republicans - one which will consume it even if McCain manages a surprise victory on Tuesday - is that the Reagan era ended with a bang on September 15. Even before that day, there had been a few whimpers, most notably George W. Bush's devastatingly effective refutation of the idea that the party was competent at running anything - think Katrina, Iraq, or a balanced budget - apart from political campaigns. But all of these could be framed as failures of execution: you still could argue that the ideology of the right was fundamentally sound.

    Since mid-September, when the credit crunch metastasised into a full-blown international economic crisis, that has been impossible. It is partly because no matter what your specific culprit of choice may be - derivatives, global financial imbalances, lax mortgage-lending standards: take your pick - it is hard to deny that something pretty serious has gone wrong with global capitalism.

    Even more importantly, whatever your diagnosis of the cause of our ills, emergency efforts to cure them have already transformed the US economy. America's Republican-ruled state has intervened massively in the financial sector and is now set to own huge swathes of it.

  •  Sarkozy bank fraud investigation takes new twist (0+ / 0-)

    From Times Online
    October 31, 2008
    Nicolas Sarkozy bank fraud investigation takes new twist
    Adam Sage in Paris

    Detectives hunting for hackers who accessed President Sarkozy’s bank account are seeking to determine whether he fell victim to a brazen fraudster with a black sense of humour or to political skulduggery.

    The inquiry, launched last month after it emerged that he had lost €170 from his account, took a new twist when police discovered that Paul Sarkozy de Nagy-Bosca, the President’s father, and Marie-Dominique Culioli, his first wife, were also victims of the fraud.

    The discovery blew apart an initial French police theory that the hackers had stumbled upon Mr Sarkozy’s account by chance. "That now seems very unlikely," said a police source.

  •  GM, Chrysler Merger on Hold as Aid Hopes Fade (0+ / 0-)

    GM, Chrysler Merger on Hold as Aid Hopes Fade: Sources

    By REUTERS
    Published: October 31, 2008

    NEW YORK/DETROIT (Reuters) - A deal to merge General Motors Corp <GM.N> and Chrysler LLC has hit an impasse after the Bush administration ruled out funding for it, three people with direct knowledge of the talks said.

    This puts any merger of the struggling automakers on hold until after the U.S. presidential election, the sources said.

    The development adds a new element of uncertainty for the embattled U.S. auto industry as Detroit's political allies warn the sector faces a deepening financial crisis that threatens tens of thousands of jobs.

  •  Frank: Banks "Distorting" Government Bailout Plan (0+ / 0-)

    Barney Frank: Banks "Distorting" Government Bailout Plan

    JOHN DUNBAR | October 31, 2008 05:19 PM EST | AP

    WASHINGTON — The chairman of the House Financial Service Committee accused financial institutions on Friday of "distorting" the government's $700 billion economic bailout plan by using funds for bonuses, dividends and acquisitions.

    Rep. Barney Frank, D-Mass., said such uses of the funds are a "violation of the terms of the act."

    Frank joins a growing chorus of lawmakers on Capitol Hill who are criticizing the Bush administration over management of the bailout plan.

  •  In US economic decline, worst is yet to come (0+ / 0-)

    In US economic decline, worst is yet to come
    Agence France-Presse
    Published: Thursday October 30, 2008

    "What is noticeable is that the US economy is hanging onto support from exports that will not last in the fourth quarter," said Avery Shenfeld, economist at CIBC World Markets.

    "The rest of the world is slowing and the rising dollar will take some of the shine off exports. The fourth quarter is going to be much worse, with a decline of perhaps as much as two percent."

    Consumer spending, the main driver of economic activity, fell 3.1 percent in the quarter on a sharp 14 percent plunge in spending on so-called durable goods like cars and appliances expected to last three years or more, the report showed.

    Spending on nondurables such as food and clothing slid 6.4 percent, the biggest decline since 1950.

  •   7.5 million homeowners 'underwater' (0+ / 0-)

    By Les Christie, CNNMoney.com staff writer
    Last Updated: October 31, 2008: 8:13 AM ET
    7.5 million homeowners 'underwater'

    Nearly a fifth of U.S. borrowers owe more on their mortgages than their homes are currently worth - and that number is growing.

    Top 10 states with underwater loans
    State # of mortgages % underwater
    Nevada 609,577 47.8%
    Michigan 1,145,572 38.6%
    Arizona 1,287,076 29.2%
    Florida 4,248,470 29.2%
    California 6,461,981 27.4%
    Georgia 1,456,327 23.2%
    Ohio 1,905,000 22%
    Colorado 1,045,773 18.3%
    New Hampshire 144,479 17.2%
    Texas 2,721,638 16.5%
    Source:First American CoreLogic
    Top 10 states with the fewest underwater loans
    State # of mortgages % underwater
    New York 1,554,607 4.4%
    Hawaii 201,188 5.6%
    Pennsylvania 1,413,181 5.7%
    Montana 87,181 6.9%
    Connecticut 678,766 7.4%
    Alabama 238,978 7.4%
    Oregon 641,820 7.5%%
    Washington 1,273,659 7.6%
    New Mexico 186,844 8.2%
    New Jersey 1,748,179 9.3%
    Source:First American CoreLogic

    Special Report
    Mortgage Meltdown

       * JPMorgan Chase expands housing rescue plan
       * 7.5 million homeowners 'underwater'
       * Mortgage rates spike to 6.46%
       * Mortgage applications jump 17% on lower rates

    NEW YORK (CNNMoney.com) -- At least 7.5 million Americans owe more on their mortgages than their homes are currently worth, according to a real estate research firm's report released Friday.

    In other words: If they sold their homes today, they'd have to bring a check to the closing. Ouch.

    Another 2.1 million people stand right on the brink, according to the report by First American CoreLogic. Their homes are worth less than 5% more than the mortgages they're paying on them.

  •  Fear of Deflation Lurks as Global Demand Drops (0+ / 0-)

    By PETER S. GOODMAN
    Published: October 31, 2008

    As dozens of countries slip deeper into financial distress, a new threat may be gathering force within the American economy — the prospect that goods will pile up waiting for buyers and prices will fall, suffocating fresh investment and worsening joblessness for months or even years.
    Skip to next paragraph
    Related
    Times Topics: Credit Crisis — The Essentials

    The word for this is deflation, or declining prices, a term that gives economists chills.

    Deflation accompanied the Depression of the 1930s. Persistently falling prices also were at the heart of Japan’s so-called lost decade after the catastrophic collapse of its real estate bubble at the end of the 1980s — a period in which some experts now find parallels to the American predicament.

  •  From Midwest to M.T.A., Pain From Global Gamble (0+ / 0-)

    By CHARLES DUHIGG and CARTER DOUGHERTY
    Published: November 1, 2008

    During the go-go investing years, school districts, transit agencies and other government entities were quick to jump into the global economy, hoping for fast gains to cover growing pension costs and budgets without raising taxes. Deals were arranged by armies of persuasive financiers who received big paydays.

    But now, hundreds of cities and government agencies are facing economic turmoil. Far from being isolated examples, the Wisconsin schools and New York’s transportation system are among the many players in a financial fiasco that has ricocheted globally.

  •  Iceland, Mired in Debt, Blames Britain for Woes (0+ / 0-)

    By SARAH LYALL
    Published: November 1, 2008

    The troubles between the countries began three weeks ago when Britain took the extraordinary step of using its 2001 antiterrorism laws to freeze the British assets of a failing Icelandic bank. That appeared to brand Iceland a terrorist state.

    "I must admit that I was absolutely appalled," the Icelandic foreign minister, Ingibjorg Solrun Gisladottir, said in an interview, describing her horror at opening the British treasury department’s home page at the time and finding Iceland on a list of terrorist entities with Al Qaeda, Sudan and North Korea, among others.

    In a volatile economic climate, in which appearance matters almost as much as reality, being associated with terrorism is not a good thing.

  •  Germany Plans EU50 Billion in Growth Incentives (0+ / 0-)

    Germany Plans EU50 Billion in Growth Incentives, Dow Jones Says

    By Christian Vits

    Nov. 1 (Bloomberg) -- The German government is developing an economic stimulus package to trigger 50 billion euros ($63.6 billion) in ``growth incentives'' for 2009 and 2010, Dow Jones Newswires reported, citing a joint document of the economics and finance ministries.

    The measures will encourage public and private investment, the document said, according to the news agency. The document dated Oct. 31 indicates the government will fund the measures through increased borrowing, Dow Jones said.

    ``Measures to safeguard companies' financing and liquidity are provided by funding investments worth slightly more than 20 billion euros,'' the document said, according to the newswire.

  •  Russian Banking System Operating Smoothly - Putin (0+ / 0-)

    Russian Banking System Operating Smoothly - Putin
    Thursday, October 30, 2008 8:56 PM

    (Source: Daily News Bulletin; Moscow - English)trackingASTANA.

    Oct 30 (Interfax) - The Russian banking system is operating smoothly, Prime Minister Vladimir Putin said. The only problems that do exist have to do with interaction between the banks themselves, but this has nothing to do with private individuals, Putin told journalists in Astana on Thursday.

    "The banking system is working in this country, and it is working smoothly," he said.

    •  Putin, Medvedev Sticking to Rubles (0+ / 0-)

      The Moscow Times »
      Igor Tabakov / MT
      By Natalya Krainova / Staff Writer

      Putin, Medvedev Sticking to Rubles

      01 November 2008. The ruble may have shed 10 percent of its value in two months, but both President Dmitry Medvedev and Prime Minister Vladimir Putin are clinging onto their rubles in favor of the U.S. dollar.

      The government is pumping billions of dollars into propping up the ruble, with the Central Bank saying Thursday that it had spent a record $13 billion last week alone as ordinary Russians cashed out their rubles for dollars and euros.

      The ruble started out the week at the official rate of 27.35 to the U.S. dollar, an 11 percent drop from 24.57 to the dollar on Sept. 1. The Central Bank on Friday set the official rate at 26.54.

      In an apparent appeal for calm, Medvedev and Putin said this week that they would keep their savings in rubles — and in the bank.

      •  Russia Will Tighten Restrictions on Ruble Sales (0+ / 0-)

        Russia Will Tighten Restrictions on Banks Selling Rubles

        By Lucian Kim

        Nov. 2 (Bloomberg) -- Russia will tighten restrictions that seek to prevent banks using emergency state loans to sell rubles, First Deputy Prime Minister Igor Shuvalov said.

        ``We're forming a mechanism to stop the outflow of speculative capital,'' Shuvalov said in an interview broadcast on state news channel Vesti-24 today. The additional measures may be introduced as early as next week, he said.

        The government has pledged more than $200 billion to stem the country's worst financial crisis since 1998, including $50 billion for banks and companies to pay off foreign loans. The ruble had its biggest monthly drop against the dollar in almost a decade during October, raising concern the currency was on the brink of devaluation.

  •  Russia, Libya sign civil nuclear deal as Kadhafi (0+ / 0-)

    Russia, Libya sign civil nuclear deal as Kadhafi visits: Tripoli

    1 day ago

    MOSCOW (AFP) — Libya and Russia signed a civil nuclear cooperation deal Saturday, Tripoli's foreign minister said, as Moamer Kadhafi visited Moscow for talks he said could help restore "geopolitical equilibrium".

    The Libyan leader's first visit to Moscow since 1985, the Cold War era, and which included meetings with President Dmitry Medvedev and Prime Minister Vladimir Putin, was also expected to focus on oil and gas and arms purchases.

    While Russian officials did not confirm the nuclear accord, Libyan Foreign Minister Abdelrahman Chalgham described it as touching on a range of issues.

    "A cooperation agreement was signed in the area of the peaceful use of civilian nuclear, particularly in the design and construction of reactors and the supply of nuclear fuel," said Abdelrahman Chalgham, who accompanied Kadhafi.

  •  IMF needs hundreds of billions of dollars more: (0+ / 0-)

    IMF needs hundreds of billions of dollars more: Brown

    17 hours ago

    RIYADH (AFP) — Prime Minister Gordon Brown said the International Monetary Fund (IMF) needs "hundreds of billions of dollars" to help countries at risk of collapsing amid the world financial crisis.

    Brown, who is in Saudi Arabia, told reporters Saturday during a four-day tour of Gulf states that countries which had benefited from recent high oil prices could contribute to the plan.

    Brown also stressed that Britain welcomed investment from Gulf sovereign wealth funds "as long as they play by our rules and operate in a commercial manner."

    Brown, whose struggling premiership has been boosted by his leadership in the financial panic, wants the IMF's 250 billion dollar bailout fund for affected countries to be extended to prevent "contagion" elsewhere.

  •  Medvedev, Sarkozy lay plans for EU-Russia summit (0+ / 0-)

    Medvedev and Sarkozy lay plans for EU-Russia summit
    Europe News

    Nov 1, 2008, 17:39 GMT

    Moscow - The presidents of France and Russia telephoned Saturday in preparation for the resumption of talks about closer ties between Russia and the European Union, the Interfax news agency reported Saturday.

    The EU suspended those talks on a Partnership and Cooperation Agreement after Russia's war with Georgia this summer.

    But officials from France, which currently holds the rotating EU presidency, have given signs that the talks are set to resume and that a timetable for further talks could be laid out at a November 14 meeting in Nice.

  •  US, Zimbabwe oppose UN arms trade resolution (0+ / 0-)

    US, Zimbabwe oppose UN arms trade resolution
    Press Trust of India
    US, Zimbabwe oppose UN arms trade resolution

    Saturday, November 01, 2008, (United Nations)
    The US and Zimbabwe, which have worst of ties, showed rare unity when they joined together to oppose a resolution in a key UN committee, which calls for setting common international standards for import, export and transfer of conventional weapons.

    The General Assembly's Disarmament and International Security Committee adopted the resolution by 145 votes with both the US and Zimbabwe opposing it.

    The committee establishes an open-ended working group for further consideration of "complex" issues involved in regulating the trade in conventional weapons.

    India was among the 18 countries, which abstained from voting. They included China, Russia, Pakistan, Israel, Saudi Arabia, Syria and Yemen.

  •  The Fed as a central bank to the world (0+ / 0-)

    The Fed as a central bank to the world

    Jacqueline Thorpe, Financial Post  Published: Sunday, November 02, 2008

    Nicolas Sarkozy may be pushing for a new financial order but Federal Reserve Chairman Ben Bernanke and U.S. Treasury Secretary Henry Paulson have beaten him to it.

    While the French President dreams of global economic cooperation ahead of the G20 summit in Washington, the Fed is quietly becoming central bank to the world, backed by the full might of the U.S. Treasury and a teflon-coated greenback.

    Last week saw a new program added to the barrage of bailouts, backstops and stimuli announced by the United States -- US$30-billion currency swap lines for Brazil, Mexico, South Korea and Singapore. This is on top of the unlimited supply of greenbacks the United States has provided to the major economies.

    •  Trichet Extends ECB Power, May Cut Rates at Faste (0+ / 0-)

      Trichet Extends ECB Power, May Cut Rates at Fastest Pace Ever

      By John Fraher

      Nov. 3 (Bloomberg) -- Jean-Claude Trichet is extending the European Central Bank's powers just as it gears up for what may be the fastest round of interest-rate cuts in its 10-year history.

      President Trichet has pushed the central bank's reach into the euro region's neighboring economies as they struggle to cope with the financial crisis, and has approved record lending to banks. Economists predict the ECB will slash its benchmark rate, currently at 3.75 percent, to 2.5 percent by April after a likely cut on Nov. 6.

      ``The ECB is at times playing the role of lender of last resort for the whole European financial system,'' said Guillaume Menuet, a senior European economist at Merrill Lynch & Co. in London. ``Its mandate is being implicitly expanded.''

  •  Syria decides to cut off ties with Iraq (0+ / 0-)

    Syria decides to cut off ties with Iraq

    Posted: 31-10-2008 , 11:58 GMT

    Syria decided to cut off diplomatic ties with Iraq and suspend the work of the joint security committee as to draw down the number of Syrian troops deployed on common borders. The decision came following the US raid on Abu Kamal region near Iraqi borders, media sources reported.

    •  More Syrian Troops Deploy Along Lebanese Border (0+ / 0-)

      More Syrian Troops Deploy Along Lebanese Border
      By Edward Yeranian
      Cairo
      31 October 2008

      Syria has reportedly deployed more troops along its border with Lebanon, allegedly to "combat smuggling." Meanwhile a Syrian Foreign Ministry spokesman is denying reports that Syria has withdrawn troops from its border with Iraq in retaliation for a weekend raid on a Syrian border town which Damascus blames on the United States. Edward Yeranian reports for VOA from Cairo.

      •  U.S. raid in Syria snowballs into crisis (0+ / 0-)

        U.S. raid in Syria snowballs into crisis

        Atul Aneja

        Amercian Embassy to shut down; Damascus wants apology

        PHOTO: AFP

        EXPRESSING OUTRAGE: Syrians raise anti-U.S. slogans during a demonstration in Damascus on Thursday.

        DUBAI: The raid by American troops inside Syrian territory is likely to sour diplomatic ties between Washington and Damascus, with the U.S. Embassy in the Syrian capital announcing its decision to shut down due to security concerns.

        •  Jordan's lower house blasts U.S. over raid into S (0+ / 0-)

          Jordan's lower house blasts U.S. over raid into Syria
          www.chinaview.cn 2008-10-30 14:52:14  

           

          AMMAN, Oct. 30 (Xinhua) -- Jordan's lower house Wednesday blasted the U.S. over its recent raid into Syria, local daily the Jordan Times reported on Thursday.

             Lawmakers described the raid as arrogant and called on Arab countries to condemn the action.

             "The attack on Syria is an attack on every inch of the Arab world and means that no Arab land is safe from U.S. attacks," said a statement read by Deputy Najeh Momani.

          •  Questions raised over Syrian complicity in raid (0+ / 0-)

            November 2, 2008
            Questions raised over Syrian complicity in US raid

            Syria has denounced a US strike on its territory but sources say Damascus secretly backed the raid
            Marie Colvin and Uzi Mahnaimi

            Video: Syrian minister criticises US raid

            The 38-year-old farmer was watering his maize in the scrubby vastness of eastern Syria when four Black Hawk helicopters swooped in low over the palm trees, heading from the border with Iraq formed by the Euphrates River.

            It was late afternoon. The light was fading and the chill of the desert winter night was setting in. The helicopters, following their leader in a disciplined arc, hovered just above the one-storey concrete and mud homes of the village of Sukariyeh before the attack began.

            Two of them landed next to a ramshackle building site and uniformed men hit the ground firing. Two other helicopters gave aerial cover.

            Related Links

               * US says attack on village was 'warning to Syria'

               * A warning Syria's President Assad must heed

               * Syrian minister condemns US 'terrorism'

            "To begin with I thought they were Syrian helicopters, but then I saw eight or nine soldiers armed to the teeth. They carried big black M16s," said Mohammad al-Ali, the farmer. His land lies closest to the site where an American commando squad last week staged an unprecedented strike in Syrian territory.

            The guns were the clue to their identity – only Americans or their allies carry M16s; the Syrian army has Russian-made AK47s.

            Ali said the troops raced to a compound of new homes, where men of the al-Hamad family were working. "Even before they ran from their helicopters they began to shoot at the workers," Ali said. "The whole operation took 10 to 15 minutes and they left behind seven corpses."

            •  Iraq boosts security presence along Syrian border (0+ / 0-)

              Iraq boosts security presence along Syrian border

              Iraq has dispatched extra police to boost security along its border with Syria a week after a U.S. military raid into the neighboring country, an interior ministry spokesman was reported by the AFP as saying on Sunday.

              ...

              U.S. forces a week ago raided a Syrian village in an operation American commanders said targeted an Iraqi militant leader known to smuggle fighters into Iraq.

              Syria insists the eight killed were all Syrian civilians and has challenged Washington to provide evidence its forces targeted a top al Qaeda operative.

  •  Chastise replaces market economy in Turkey (0+ / 0-)

    Ertugrul Ozkok: Chastise economy replaces market economy in Turkey

    French Le Monde said "Turkey is heading towards catastrophe".

    The report in Le Monde says Turkey should put aside its pride and sign an agreement with the International Monetary Fund.

    "Turkey does not have the luxury to experience the same crisis scenario as it did in 2001," the report concludes.

    Erdogan is angered by bankers who ask precautions be taken.

    ...

    At this point I want to tell him directly.

    Mr. Prime Minister;

    Every single day your anger towards everyone intensifies, but the situation does not seem any brighter.

    Now is the time to stop getting angry and hold a 24-hour-long crisis meeting.

  •  Hu calls for creating more domestic needs (0+ / 0-)

    Hu calls for creating more domestic needs

    Beijing (PTI): Chinese President Hu Jintao said that fundamentals of the country's economic development are good but called for creating more domestic needs to keep stability in the financial market amid the global meltdown.

    "Currently, the fundamentals of our country's economic development are good amid the international financial tsunami and the world economy's slowdown," Jintao said during a visit to northern province of Shaanxi.

    ...

    Hu asked local official and people to revive their confidence and work hard to tackle the current financial crisis.

    ...

    Hu's comments come amid mounting evidence China is starting to feel the pinch from the global economic downturn.

    The country's GDP growth slowed to nine per cent in the third quarter of the year, the lowest growth figure since the second quarter of 2003 and the growth of its exports has also decreased.

  •  Indian banks outperform US peers (0+ / 0-)

    Indian banks outperform US peers on quarterly weighing scale

    New Delhi/New York (PTI): Going by the adage that figures do not lie, Indian banks indeed seem to have remained unaffected by the global financial crisis, at least to a large extent, compared to their peers in the US.

    An analysis of the latest-quarter scorecards of five major Indian and American banks shows that the likes of SBI, ICICI Bank, PNB, HDFC Bank and Axis Bank have outperformed their US peers such as Citi, JPMorgan Chase, Bank of America, Wells Fargo and USBancorp by a wide margin on profitability front.

    While concerns have been cascading about the global credit crisis hitting Indian shores, the country's banks saw their profits zoom ahead by as much as 77 per cent in the July-September quarter.

    In contrast, the top American behemoths saw their bottom lines plummet sharply, with even the largest of them Citigroup plunging deep into the red during the same period.

  •  Iran asks Brazil for help to create “new&r (0+ / 0-)

    Iran asks Brazil for help to create "new" global system
    Washington, 2 November (IranVNC)—Iran’s President

    Mahmoud Ahmadinejad yesterday called on Brasilia to assist Tehran in establishing a "new" global system, the official IRNA news agency reported.

    By: IranVNC
    Published: Sunday, November 02, 2008
    11:30GMT—7:30AM/EST

    Washington, 2 November (IranVNC)—Iran’s President Mahmoud Ahmadinejad yesterday called on Brasilia to assist Tehran in establishing a "new" global system, the official IRNA news agency reported.

    Speaking with Brazil’s Foreign Minister Celso Amorim in Tehran, Ahadinejad said: "Existing systems in the world are collapsing and we must help each other and cooperate in establishing new systems."

    Under the "new systems", relations between countries should be "friendly and just", Ahmadinejad said, adding that current conditions warrant that Iran-Brazil ties be "dynamic, solid and constructive", IRNA reports.

    Amorim expressed a similar opinion, saying: "We must think of changing the political and economic structures in the world," the semi-official ISNA news agency reported.

    •  same story, another version: (0+ / 0-)

      Today: Monday November 03, 2008
      Ahmadinejad: World's worn-out systems should be replaced
      Tehran, Nov 1, IRNA

      Iran-Brazil-Amorim

      President Mahmoud Ahmadinejad said here Saturday that the systems currently dominating the world are degenerating and 'we should join hands to set up new systems instead'.

      President Ahmadinejad told visiting Brazilian Foreign Minister Celso Amorim that Iran is happy with prudence and wisdom of South American leaders, in particular the Brazilian president, to maintain solidarity, coordination and unity among countries.

      He said, "To remove effects of economic and cultural colonialism in our countries, we need calm, collaboration and round-the-clock efforts, thus eliminating poverty and establishing peace." He said that governments should forge fair and amicable ties. "New conditions necessitates both countries to have dynamic, strong and constructive relations."

  •  Chavez To Seize Banks If Crisis Reaches Venezuela (0+ / 0-)

    Chavez To Seize Banks If Finance Crisis Reaches Venezuela
    Monday November 3rd, 2008 / 0h28

    CARACAS (AFP)--President Hugo Chavez on Sunday said he would "expropriate" Venezuela's banks if they are hit by a finance crisis like the one that has rocked the world economic system.

    "If something similar comes to pass in Venezuela, you should not have the slightest doubt that I won't give a penny to the banks - I'll expropriate them," said Chavez, speaking Sunday in the southeastern state of Barinas.

    The Venezuelan leader said he found it "strange" that rich countries which have said they have no money to fight poverty come up with billions of dollars to bail out the banks.

    They remain unable, he chided, to finance "the production of food and medicine or to support education, but can help out the bankrupt bankers."

    •  Venezuela raids offshore banker Stanford Bank (0+ / 0-)

      Venezuela raids offshore banker Stanford Bank
      Sat 1 Nov 2008, 7:53 GMT

      CARACAS (Reuters) - Venezuelan military intelligence officials on Friday raided offshore banking group Stanford International Bank, a prosecutor and the U.S.-founded company said.

      Stanford said it has strictly followed Venezuelan laws and regulations, will cooperate with the investigation and continues to operate normally despite the raid on one of its offices in Caracas.

      The top military prosecutor, Ernesto Cedeno, said the case involved espionage. The investigation involved the U.S. Central Intelligence Agency, state media said.

  •  Chinese official begins historic trip to Taiwan (0+ / 0-)

    Chinese official begins historic trip to Taiwan
    Mon 3 Nov 2008, 1:55 GMT

    TAIPEI (Reuters) - China's top negotiator on Taiwan affairs left on Monday for the self-ruled island that Beijing claims as its own on a historic trip on which trade and transit deals are expected to be signed as opposition leaders protest.

    Chen Yunlin, the highest-level Chinese official to land on the island in decades, is due to stay until Friday to sign agreements on cargo shipments, direct flights and global financial cooperation.

    China has claimed sovereignty over Taiwan since 1949, when Mao Zedong's Communists won the Chinese civil war and Chiang Kai-shek's KMT fled to Taiwan. Beijing has vowed to bring Taiwan under its rule, by force if necessary.

    But since China-friendly Taiwan President Ma Ying-jeou took office in May, relations have thawed with a series of trade and transit deals, including permission for as many as 3,000 Chinese tourists to visit the once largely forbidden island per day.

  •  Pakistani quake survivors beg for shelter (0+ / 0-)

    Pakistani quake survivors beg for shelter from cold
    Sun 2 Nov 2008, 12:36 GMT
    [-] Text [+]

    By Gul Yousafzai

    WAM KHAZI, Pakistan (Reuters) - Villagers in a southwest Pakistani region hit by a powerful earthquake demanded shelter on Sunday saying they need help before a bitter winter sets in or their children could die.

    ...

    "We've got food, we've got relief, but we don't have tents which can save our children from the cold," said Rehmat Kakar, a 70-year-old farmer standing by the rubble of his house in Wam Khazi village.

    "We want those tents urgently. Please save our children, don't let them die," said Kakar, who said that four of his seven children were killed in the quake.

  •  Bernanke Urges U.S. `Backstop' for Mortgage-Bond (0+ / 0-)

    Bernanke Urges U.S. `Backstop' for Mortgage-Bond Market

    [video] paraphrase:

    Our task now it to create a link between home buyers and capital markets in a way that addresses the weaknesses of the old system.
    ...

    The financial crisis began 2 years ago.  It's proximate cause was the end of the housing boom, which revealed serious deficiencies in the mortgage underwriting and securitization processes.
    ...

    The boom in subprime mortgages was one part of a much larger credit boom characterized by an underpricing of risk, excessive leverage, and the creation of complex and opaque financial instruments that proved fragile under stress.  

    The unwinding of these developments is the source of the severe financial strain and tight credit that now damp economic growth.

    continues...

  •   U.S.-Japan Special Relationship up for change (0+ / 0-)

    U.S.-Japan Special Relationship May See More Challenges [video]

    Paraphrase: Conventional wisdom is that Republican presidents are better for Japan.  But this year, there does not appear to be much difference between Obama and McCain vis a vis Japan.

  •  `Panic' Strikes East Europe Borrowers as Banks... (0+ / 0-)

    `Panic' Strikes East Europe Borrowers as Banks Cut Franc Loans

    By Ben Holland, Laura Cochrane and Balazs Penz

    Oct. 31 (Bloomberg) -- Imre Apostagi says the hospital upgrade he's overseeing has stalled because his employer in Budapest can't get a foreign-currency loan.

    The company borrows in foreign currencies to avoid domestic interest rates as much as double those linked to dollars, euros and Swiss francs. Now banks are curtailing the loans as investors pull money out of eastern Europe's developing markets and local currencies plunge.

    ``There's no money out there,'' said Apostagi, a project manager who asked that the medical-equipment seller he works for not be identified to avoid alarming international backers. ``We won't collapse, but everything's slowing to a crawl. The whole world is scared and everyone's going a bit mad.''

  •  Gulf Citizens Beg for Bailout as Stock Rout Signa (0+ / 0-)

    Gulf Citizens Beg for Bailout as Stock Rout Signals End of Boom

    By Glen Carey and Matthew Brown
    Enlarge Image/Details

    Oct. 31 (Bloomberg) -- Abdullah Hajeri led a march on the Emir's palace in Kuwait this week, demanding the oil-rich nation's ruler stop stocks from plunging. Adnan Mohammed Saleh, down the Persian Gulf coast in Dubai, said he wants more government protection from the global financial crisis.

    ``Every day the market is crashing,'' said Saleh, a 42-year- old trader, staring dumbfounded last Tuesday as company names scrolled across the Dubai Stock Exchange's outdoor ticker in red.

    The region's rulers are under pressure from citizens to shore up investors, not just banks, as they try to fend off what may be the worst economic crisis since December 1998, when oil at $10.35 a barrel forced them to slash spending. Crude prices have fallen 50 percent from a record $147.27 in July, and stock indexes in Dubai and Saudi Arabia are down by as much this year.

  •  South Korea Plans 14 Trillion Won Stimulus in '09 (0+ / 0-)

    South Korea Plans 14 Trillion Won Stimulus in 2009(Update2)

    By Seyoon Kim
    More Photos/Details

    Nov. 3 (Bloomberg) -- South Korea plans to a 14 trillion won ($10.8 billion) boost to the economy next year as the nation tackles the biggest crisis since it needed an International Monetary Fund bailout a decade ago.

    The package includes spending an extra 4.6 trillion won on regional infrastructure and providing 3 trillion won in tax benefits, mainly extending tax breaks on investment in factories, Finance Minister Kang Man Soo told reporters today in Gwacheon. Relief measures announced this year now total 33 trillion won, according to the finance ministry.

    The currency and stocks rose after the government said the measures will add 1 percentage point to economic growth next year and create an extra 200,000 jobs. South Korea cut interest rates by a record last week and the Federal Reserve agreed to provide the central bank with $30 billion in U.S. currency after local financial markets tumbled.

  •  Chinese Manufacturing Shrinks by Record Amount (0+ / 0-)

    Chinese Manufacturing Shrinks by Record, Survey Shows(Update2)

    By Nipa Piboontanasawat
    Enlarge Image/Details

    Nov. 3 (Bloomberg) -- China's manufacturing contracted by the most on record last month as the global financial crisis cut demand for exports, a second survey showed.

    The CLSA China Purchasing Managers' Index fell to a seasonally adjusted 45.2 in October from 47.7 in September, CLSA Asia-Pacific Markets said today in an e-mailed statement.

    A government-backed survey released on Nov. 1 also showed a record contraction, adding to concern that the world's fastest- growing economy may slump. Australia reported today that manufacturing shrank by the most since data began in 1992 as the crisis rips across Asia Pacific.

    ``The very sharp fall in the October PMI confirms that China is more integrated into the global economy than ever,'' said Eric Fishwick, head of economic research at CLSA in Singapore. ``Chinese manufacturers are seeing their order books cut, both at home and abroad, as the world economy falls into recession.''

  •  `Old VIX' Shows More Sustained Fear Than in 1987: (0+ / 0-)

    `Old VIX' Shows More Sustained Fear Than in 1987: Chart of Day

    By David Wilson

    Oct. 31 (Bloomberg) -- U.S. stock investors have been more fearful for longer than they were in the weeks before the October 1987 market crash, according to a gauge known as the old VIX.

    The CHART OF THE DAY shows the closing values for this indicator, the Chicago Board Options Exchange S&P 100 Volatility Index, in the past two months (the white line) and the same period 21 years ago (the red line).

    ...

    In 1987, the old VIX behaved differently than it has this year because the plunge in stocks was ``a far quicker affair,'' Michael Shaoul, chief executive officer of Oscar Gruss & Son Inc., wrote yesterday in an e-mail. ``There was nothing like the same degree of economic problems at the time and no concerns about the global banking system outside of the fact that equity markets had crashed.''

  •  WaMu: Was There a Loan It Didn’t Like? (0+ / 0-)

    Fair Game
    Was There a Loan It Didn’t Like?

    By GRETCHEN MORGENSON
    Published: November 1, 2008

    AS a senior mortgage underwriter, Keysha Cooper was proud of her ability to spot fraud and other problems in a loan application. A decade of vetting mortgage documents had taught her plenty, she says.

    ...

    "At WaMu it wasn’t about the quality of the loans; it was about the numbers," Ms. Cooper says. "They didn’t care if we were giving loans to people that didn’t qualify. Instead, it was how many loans did you guys close and fund?"

    Ms. Cooper, 35, was laid off a year ago and is still unemployed. She came forward to discuss her experiences at the bank in order to help shareholders recover money from WaMu executives.

  •  Debt Linked to Buyouts Tightens the Economic Vise (0+ / 0-)

    Debt Linked to Buyouts Tightens the Economic Vise

    By ANDREW ROSS SORKIN and MICHAEL J. de la MERCED
    Published: November 2, 2008

    Private equity firms embarked on one of the biggest spending sprees in corporate history for nearly three years, using borrowed money to gobble up huge swaths of industries and some of the biggest names — Neiman Marcus, Metro-Goldwyn-Mayer and Toys "R" Us.

    ...

    So, like homeowners with an adjustable rate mortgage that just went up, some of private equity’s titans are facing a huge squeeze. And that is coming at the same time consumers are staying home with their wallets closed.

    ...

    Analysts expect an even broader array of companies backed by private equity — including resorts like Harrah’s Entertainment and lenders like GMAC, the financing arm of General Motors — to face even more pressure as profits shrivel and creditors come knocking.

    "There’s absolutely going to be a lot of pain to go around," said Josh Lerner, a professor of investment banking at Harvard Business School. "The big question is how apocalyptic it will be."

  •  Medvedev: US to blame for global financial crisis (0+ / 0-)

    Medvedev: US to blame for global financial crisis
    3 hours ago

    MOSCOW (AP) — Russia's president says the United States is to blame for the global financial crisis — and presents his case in an online preview of his state-of-the-nation speech.

    The highly anticipated speech Wednesday will be President Dmitry Medvedev's first state-of-the-nation address since taking office in May. A preview of the speech is available in a video posted on the Kremlin Web site.

  •  French prime minister threatens to nationalize... (0+ / 0-)

    French prime minister threatens to nationalize loan-wary banks
    Posted : Mon, 03 Nov 2008 10:57:12 GMT
    Author : DPA

    Paris - French Prime Minister Francois Fillon has threatened to nationalize any French bank receiving emergency government aid that does not extend loans to businesses, the online edition of the daily Le Figaro reported on Monday. Interviewed for a television program to be broadcast late Monday, Fillon said, "If we feel that the banks are not doing the necessary work ... we will take back the credits we have given them."

    Without this government aid, Fillon said, the banks will find themselves in difficulty.

    "The next question is if we will then take over the bank's capital, possibly to change their leadership, to oversee their strategy," he said.

  •  Explosion targets gas pipeline in western Canada (0+ / 0-)

    Explosion targets gas pipeline in western Canada
    The Associated Press
    Published: November 1, 2008
     

    DAWSON CREEK, British Columbia: Canada's counter-terrorist security force is investigating the third bomb attack in three weeks targeting natural gas pipelines owned by EnCana Corp. in western Canada.

    EnCana spokeswoman Rhona DelFrari says the company has a crew at the scene trying to cap the gas leaking after Friday's blast near Dawson Creek, British Columbia.

  •  Oil Falls as Asian Import Cuts Heighten Concern (0+ / 0-)

    Oil Falls as Asian Import Cuts Heighten Demand Slowdown Concern

    By Grant Smith

    Nov. 3 (Bloomberg) -- Crude oil fell as reduced imports by Asian refiners reinforced concerns that a demand slowdown is spreading to emerging markets.

    China Petroleum & Chemical Corp., Asia's biggest refiner, will process less crude at some plants because of falling fuel demand, its parent said today. South Korea imported 1.4 percent less crude oil in October as the global credit crisis sent shockwaves through Asia's fourth-biggest economy.

    ``Demand growth in the emerging markets seems to be slowing down massively,'' said Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt. ``The outlook is disturbingly weak and alarming for commodity traders and investors.''

  •  Brown says next US president key to world economy (0+ / 0-)

    Brown says next US president key to world economy

    2 hours ago

    ABU DHABI (AFP) — Prime Minister Gordon Brown said on Monday that US leadership is "central" to restoring stability to the battered world economy, stressing the challenge facing Barack Obama or John McCain.

    Speaking one day before the US presidential vote, Brown said "even more international cooperation" will be needed to counter financial turbulence in coming months.

    Brown is on day three of a four-day tour of Saudi Arabia, Qatar and the United Arab Emirates, during which he hopes to persuade the oil-rich states to give some of their wealth to boost the International Monetary Fund (IMF).

  •  5 found shot dead in Calif. homeless camp (0+ / 0-)

    5 found shot dead in Calif. homeless camp

    AP - updated 4:20 p.m. PT, Sun., Nov. 2, 2008

    LONG BEACH, Calif. - Police say five homeless people were found shot to death in a makeshift camp near some Los Angeles-area freeway ramps.

    Long Beach police discover bodies after responding to an anonymous call.

    With the wave of homeless that appears to be coming, this is very scary.

  •  Brazil mining giant Vale cuts output due to globa (0+ / 0-)

    Brazil mining giant Vale cuts output due to global crisis

    1 day ago

    RIO DE JANEIRO (AFP) — Brazilian mining giant Vale, the world's largest producer of iron ore, said it was to slash output at mines in Brazil and elsewhere by up to 10 percent from Saturday to adjust to shrinking demand caused by the global financial crisis.

    Vale will cut production at facilities in Brazil, China, France, Indonesia and Norway, and some 2,300 workers -- nearly four percent of the company's workforce of 62,600 -- will be put on temporary leave, it said in a statement.

    The company decided to reduce "the mineral production of iron by the equivalent of 30 million metric tons per year," Rio-based Vale said in its statement released Friday.

  •  China and Iran to talk business (0+ / 0-)

    China and Iran to talk business
    Mon, 03 Nov 2008 12:18:15 GMT

    A Chinese economic delegation has arrived in Tehran ahead of the thirteenth Joint Iran-China Economic Commission slated for next week.

    The Iranian and Chinese delegations will be headed by commerce ministers from both countries.

    The majority of trade between the Iran and China is in the energy sector. Iran currently provides 13 percent of China's oil, as well as being a major supplier of liquefied natural gas to the Energy-hungry country.

  •  Mexico Buys Back Gov'nt Debt to Ease Liquidity (0+ / 0-)

    Mexico Buys Back Government Debt to Ease Liquidity
    By VOA News
    30 October 2008

    Mexico moved to inject cash into its financial markets Thursday, saying it will buy back $3 billion in government bonds.

    Mexican finance officials made the announcement Thursday, saying the country will buy back the 10 to 30-year fixed rate bonds in order to strengthen liquidity in the cash-squeezed markets.  

    Word of the plan caused Mexico's peso to strengthen, trading at 12.7 to the dollar.  

    Separately, Mexico is being helped by a "swap" accord with the U.S. central bank.

  •  Mexico Congress Approves All Seven Oil Bills (0+ / 0-)

    Mexico Congress Approves All Seven Bills to Change Oil Industry

    By Jens Erik Gould and Adriana Lopez Caraveo

    Oct. 28 (Bloomberg) -- Mexico's lower house of congress approved all seven bills to change rules governing the oil industry, including a measure to let state-owned Petroleos Mexicanos hire private companies to explore and drill for oil.

  •  Aso: ‘Once in 100 years’ stimulus pa (0+ / 0-)

    ‘Once in 100 years’ stimulus package

       * Last Updated: October 30. 2008 7:18PM UAE / October 30. 2008 3:18PM GMT

    Japan and Germany said today they would pump billions of dollars into their economies, hoping to provide a cushion against a deep recession and complement a series of expected interest rates cuts.

    Japan, the world’s second-biggest economy, unveiled a ¥5 trillion (Dh187 billion) package of spending measures to support its economy. Germany planned a range of steps worth up to €25bn (Dh117bn) to boost business.

    "I will implement bold policies so people who are confronting pain will feel the real effect," the Japanese prime minister, Taro Aso, wrote in his weekly public email message. "Drawing on all possible wisdom, we must overcome this ‘once in 100 years’ crisis."

    Growing fear that the world is slipping into a downturn has forced authorities to use any means to protect their economies. Four more of the world’s top central banks are forecast to reduce interest rates by the end of next week.

  •  US wins wine and spirit duty case against India (0+ / 0-)

    US wins wine and spirit duty case against India at WTO
    Press Trust of India / New Delhi October 31, 2008, 15:48 IST

    India suffered a setback in a wine and spirit dispute with the US as the WTO appellate body ruled in favour of the American contention that New Delhi is levying excess duties on the alcoholic drinks than allowed by the multilateral agency.    

    The appellate body of the global trade referee on yesterday reversed the June 2008 decision of the WTO Dispute Settlement Panel, which had gone in India's favour.    

    The panel had stated that the US "had failed to establish that the additional duty and the extra-additional duty are inconsistent with India's WTO obligations".    

    While the highest appeals court of WTO found the duties imposed by India inconsistent with the rules, it did not offer any recommendations for New Delhi.  

     

  •  Some finance experts fear AIG bailout won't work (0+ / 0-)

    Some finance experts fear AIG bailout won't work
    By CAROL D. LEONNIG
    Washington Post
    Nov. 2, 2008, 10:51PM

    WASHINGTON — A number of financial experts now fear that the federal government's $143 billion attempt to rescue troubled insurance giant American International Group may not work, and some argue that company shareholders and taxpayers would have been better served by a bankruptcy filing.

    The Treasury Department leapt to keep AIG from going bankrupt on Sept. 16, and in the past seven weeks, AIG has drawn down $90 billion in federal bailout loans. But some key AIG players argue that bankruptcy would have offered more structure and greater protections during a time of intense market volatility.

    Echoing some other experts, Ann Rutledge, a credit derivatives expert, said she is not sure how badly the financial system would have been rocked if the government had let AIG file for bankruptcy protection

    "What we see now are a lot of games by the government to keep these institutions going with a lot of cash," she said.

  •  Manufacturing sector contracts in October (0+ / 0-)

    Manufacturing sector contracts in October
    Associated Press
    Nov. 3, 2008, 11:28AM

    NEW YORK — Business at manufacturers from plastic companies to lumberyards plummeted to the lowest level in 26 years in October.

    In what some economists called a sure sign of recession, the Institute for Supply Management said Monday its manufacturing index fell to 38.9, the lowest reading since September 1982. Any reading below 50 signals contraction.

    "It’s a report that confirms everything we learned in the last couple months — the economy is falling deeper into recession," said Stuart G. Hoffman, senior vice president and economist for The PNC Financial Services Group.

  •  Shell signs offshore deal with Abu Dhabi (0+ / 0-)

    Shell signs offshore exploration deal with Abu Dhabi
    Bloomberg News
    Nov. 3, 2008, 9:30AM

    Royal Dutch Shell Plc, Europe’s largest oil company, signed a memorandum of understanding with Abu Dhabi that may lead to deep-offshore gas exploration.

    It’s too early to estimate potential reserves, Shell’s Head of Exploration Malcolm Brinded said today in an interview in Abu Dhabi. "Shell hopes to move forward rapidly with final agreements in order to quickly begin joint exploration and development activities," the company, based in The Hague, said in a separate statement.

    The company’s production has declined over the past five years and fell to less than 3 million barrels of oil equivalent a day for the first time in more than a decade in the third quarter. Shell forecasts annual production growth of 2 percent to 3 percent from 2010.

    Shell has earmarked between $35 billion to $36 billion in spending for this year and has said it remains committed to "long-term" projects amid the financial crisis and lower oil prices. Investment decisions will be based on local costs and labor availability as well as the oil price.

  •  Rudd's plans to bring us back from the brink (0+ / 0-)

    Kerry-Anne Walsh, Political Correspondent
    November 2, 2008
    Page 1 of 2 | Single page

    JOBS will be lost and economic growth will falter as Australia tries desperately to surf ahead of the world financial firestorm, Prime Minister Kevin Rudd says.

    In a frank interview at Kirribilli House on Friday, Mr Rudd for the first time declared that the world was on the brink of an economic recession that would "scratch, bump and bruise" Australia and threaten growth and jobs.

    "It will be tough, ugly and hard," he said.

    Mr Rudd flagged an aggressive spending program that would eat up most of the budget surplus, to help beat the "grave" financial situation engulfing the world.

    •  Australia will avoid a recession, says PM Rudd (0+ / 0-)

      Australia will avoid a recession, says PM Rudd

      AAP

      October 31, 2008 09:37am

      Recession-proof ... the Prime Minister believes Australia is "well-placed" to avoid a recession / File

      PRIME Minister Kevin Rudd says he agrees with deputy Reserve Bank governor Ric Battellino that Australia can avoid a recession.

      Mr Battellino said in a speech yesterday that Australia is well placed to cope with the global downturn and is on track to avoid a recession, albeit growing at below average pace for the next year or two.

      "I certainly agree with what the deputy governor said, because this is the core challenge of the Government to do whatever is necessary to support positive economic growth,'' Mr Rudd told the Fairfax Radio Network today.

      "This will be tough, very tough because most other developing economies around the world are either in recession or heading there right now, and we are part of a global economy.''

  •  India: Industry to sound alarm bells at meeting (0+ / 0-)

    IANS
    Industry to sound alarm bells at meeting with PM
    Sunday, 02 November , 2008, 16:05

    New Delhi: Leading industrialists and presidents of apex chambers are expected to ring the alarm bells before Prime Minister Manmohan Singh when they meet him here on Monday to present their viewpoint on the global financial crisis and its impact on the country's corporate sector.

    ...

    Industry leaders feel there is a clear and much larger danger of job losses, a freeze on fresh employment, lack of new investments and stagnating exports that could clearly retard the country's overall economic growth, which was otherwise racing ahead at nine percent in the past three years.

    "In fact signs of such a thing happening are already visible," said Rajeev Chandrasekhar, president of the Federation of Indian Chambers of Commerce and Industry (FICCI), who is among those invited to the Monday meeting.

    "A steady, calm and complete approach is what is required at this very critical stage of expansion of our economy that as you realize is being driven primarily by private investments," he said.

  •  How Wall Street robbed you (0+ / 0-)

    How Wall Street robbed you
    Michael Maiello

    Seth Lipner, a securities attorney with Deutsch & Lipner of Garden City, New York, is representing clients who are bringing arbitration complaints against UBS. UBS had sold his clients principal protected notes issued by Lehman. Lipner makes the surprising declaration that:

    "You know what Lehman was doing with that money? They were funding their operations. They weren't buying securities and protecting it with some kind of hedge. They're borrowing money from their clients."

    With Lehman's bankruptcy, says Lipner, the notes are worthless. Lipner says that the UBS brokers sold the notes with almost no disclosure beyond a verbal commitment that they wouldn't lose money and a brief confirmation letter that instructed them to go find the prospectus on sec.gov if they wanted to know more.

  •  U.S. Capitalism Faces Change (0+ / 0-)

    U.S. Capitalism Faces Change
    Oxford Analytica 10.27.08, 6:00 AM ET

    Successive U.S. Treasury and Federal Reserve moves to avert a systemic collapse, which gathered pace last month after the bankruptcy of Lehman Brothers, have raised questions about the future of U.S. capitalism. The structure of the system is clearly being somewhat recast, but there is increasing speculation that it could be more profoundly transformed:

  •  Ford Reports October Sales Dropped 30 Percent (0+ / 0-)

    Ford Reports October Sales Dropped 30 Percent

    TOM KRISHER and BREE FOWLER | November 3, 2008 03:28 PM EST | AP

    DETROIT — General Motors' October U.S. sales plunged 45 percent and Ford's dropped 30 percent, as low consumer confidence and tight credit combined to scare customers away from showrooms.

    The results released Monday along with drops of at least 23 percent for Toyota, Honda and Nissan appeared to fulfill prophecies that the industry's sales as a whole will hit their worst level in decades.

    •  Auto Sales Drop `Not Sustainable' (0+ / 0-)

      GM's DiGiovanni Says Auto Sales Drop `Not Sustainable'

      Transcript:

      Newscaster1: Shocking Report...  Is it really that bad?

      DiGiovanni:  The number I was referring to is adjusted for population growth.  It's the worst numbers since we've been keeping records, since World War 2, in terms of sales per capita.

      I would say right now: we're in a crisis in the industry.  This isn't a story about GM.  As you indicated, you know, Toyota, Honda, Nissan, Ford, Chrysler, GM - we're all down significantly October over October.

      At a 10.8 million industry running rate, seasonally adjusted annual running rate, that's simply not sustainable for any of us.  

      Newscaster2: Is that a codeword for 'bankruptcy'?

      DiGiovanni:  I would just say that it's not sustainable for any of us.  Really, I mean when you are talking about adjusted numbers that are the lowest since WW2, you are in uncharted waters.

      Clearly it's a lack of consumer confidence, which has been triggered by all the reasons we know - the financial turmoil, housing meltdown, they got shocked by oil prices in the summer.  The consumer's been battered.  And on top of this, you can't get credit unless your credit scores are over 700.  It's a downward spiral in which those two factors are feeding upon eachother.  and we need help to break loose credit availability for consumers.

      Newscaster1:  What is the solution?  What's gonna bring that help?

      DiGiovanni:  Well at this point it could take several avenues.  We're really looking for help from the banking sector and the government to, to take some actions that will increase liquididty.  I mean that's really what we need.  I mean you can't have an auto industry if you can't borrow money.  The whole industry's based on credit availability, and has been since the days of Alfred Sloane.

      Newscaster1:  The liquidity has been boosted so much for Wall Street and the banks around the world.  Why does that not trickle through?

      DiGiovanni:  We've only seen a marginal increase in credit availability, the TED spreads are getting better and so on and so forth.  But that really hasn't  filtered through to the automotive financing sector where we really, GMAC really does not have access to liquidity to the degree we need to finance our business to capital.  I mean you just - the capital markets are right now pretty much just shut down.

      Newscaster2:  Right now GMAC is not financing loans to those with credit scores below 700.  Last year that segment represented 39% percent of your loans.  It's essentially wiped out 40% of your business.

      DiGiovanni:  Yeah.  The way to look at is is this: In 2006 41% of the GMAC business were to people with credit scores below 700.  That's fallen now to 26% and continues to fall.

      Newscaster1:  How important is this merger we are hearing about?  Is that gonna solve anything at all?

      DiGiovanni:  I really can't comment on that to be be honest with you.  All I can say is that in an economic downturn like this manufacturers, not just GM, but all manufacturers, are looking to any means that they have in terms of increasing liquidity, and trying to be profitable in a market that's significantly smaller in which the consumer is obviously severely affected by what's going on.  We're doing anything and looking at anything we can to increase liquidity and make our business profitable.  

      We're no different, than, like I said, the entire industry right now.  Every single one of us is in difficulty.  We cannot operate at this level.    

      Bummer.

  •  Rogers Says Markets May Go `A Lot Further Down' (0+ / 0-)

    Jim Rogers Says Markets May Go `A Lot Further Down'

    Jim Rogers:  The bailout is a disaster for the economy and it's a disaster for the world.

    In the 1990's the Japanese refused to let any body fail, refused to let anybody go bankrupt.  Remeber the term 'zombie banks', 'zombie companies'?  

    They wouldn't let anybody fail.  They still talk about the 90's as the lost decade.  In fact Alan Greenspan (rolls eyes, waves hand) - genius that he is - went to Japan and said: 'You are making a mistake, you should be letting people fail.  You gotta clean up the balance sheets.'

    Now of course, America is doing exactly the same thing, making the same mistakes.   It's 18 years later in Japan.  The stock market in Japan is 80% below where it was 18 years ago.  I don't consider this a good solution.  It's never worked in the past.  I don't know why they think it's going to work now.

    Betty:  And yet at the time Japan was criticized for not moving fast enough to inject liquidity to the banks.

    Jim Rogers:  They were mainly rejected for not allowing the zombies to fail.  You needed liquidity in some sectors, but you needed the zombies to fail.  That was the solution.  America told them to do that.  And now America won't do it.

    But listen, Ben Bernanke's not even as smart as Greenspan.

    Lucy:  Do you think there is any kind of middle ground between the all-out bailout and letting all the banks fail?

    Jim Rogers:  Of course there's a middle ground.   You can let half the banks fail.  The ones that should fail should fail.  It's as simple as that.  

    Listen, first of all it's bad morality, but forget morality because politicians don't care about that.  There are a lot of banks and brokerages in this country that have been doing the right thing.  We've got no problems with those.  They should be taking market share like crazy.  

    You know what's happened?  The government has taken the assets from the competent banks, given it to the incompetent banks and said: 'OK incompetent banks, now you can compete with the competent banks with their money.'  It's horrible morality, but it's horrible economics too.

    The way the system works is, you clean out the system, the assets go from the incompetent to the competent, and you start over.  There are a lot of banks out there - I'd be furious if I were they.  They've been waiting for this moment, and now they can't take advantage of it.  There are a lot of brokerage firms that have been waiting for this moment,  and now they can't take advantage of it.  

    Lucy:  What about the morality of letting millions of workers be laid off, lose their jobs?

    Jim Rogers:  It's happening anyway.  You can have 10 years or 15 years of bad economics, or you can have one or two years of bad economics.  South Korea went through this at the end of the 90's, they had a horrible two years.  They've had one of the most rapidly growing economies in the world since.   They cleaned out the system.  The assets went from the incompetent to the competent, and they started over from a strengthened position.  The Russians did it.  Many people have done it.  The Turks did it.  This is not the first time this kind of thing has happened.

    The only reason this is happening is because all the banks call up Paulson - he takes their call.  He won't take your call, or the call from a teacher in Iowa.  He takes their calls, and they say - 'help me, help me, help me.'   And he does.  There's 300 million of us.  He's not taking our calls, he's bailing out his friends.

    Lucy:  Is there anyone you admire to handle this situation?

    Jim Rogers:  For them to resign and close the Federal reserve and the crisis will take care of itself.

    Lucy:  I'm talking about a person, is there anyone that you admire - that you think has handled past crises, or that you think could help us get through this?

    Jim Rogers:  I don't know anyone in American politics that would go there, no.  I don't know anyone in American politics that I would say would solve the problem.

    continues...

  •  EU Ministers Choose 'Coordinated' Action (0+ / 0-)

    EU Ministers Rule Out Joint Stimulus, Back `Coordinated' Action

    By Fergal O'Brien

    Nov. 4 (Bloomberg) -- European finance ministers ruled out a joint stimulus package to revive the region's economy and vowed instead to coordinate national policies as they try to limit the fallout from a recession on consumers and companies.

    ``We do not believe that in the euro area we need a general revival package, a sort of traditional program designed to stimulate the economy,'' Luxembourg Finance Minister Jean-Claude Juncker told a press conference after leading a meeting of euro- area counterparts in Brussels yesterday.

    Euro-area finance chiefs met hours after the European Commission slashed its growth forecasts and predicted that the economy would stagnate next year. While French President Nicolas Sarkozy has called for a joint package to help the region combat the economic slump, the ministers indicated they favor a looser system of ``coordinated'' measures.

    I can see both sides on this.  By all doing the same all at once, it sets an even playing field.  But unfortunately, one size does not fit all. Different countries have planned differently, and therefore have to meet the needs that best suit their individual countries.  That makes sense. Especially after the fail on Lisbon.  It really wasn't gonna be possible at this point for the EU to be a unit - more of a team is what it'll be.

    So onward with a coordinated effort.  There is a way to still get the bad money out of the system, and start again.  From now on the baddies are getting more and more squeezed out.  We need to just continue to watch and learn.  Some stuff is gonna fail, but better stuff will replace it.

    Something must be done, we've got to all do it at once, even if it's not all the exact same steps.  Forward momentum in unison will be our solution.  I say 'our' in reference to EU because they are a team that's also on our team (G20).  Tomorrow we choose a new president, in two weeks we choose a 'coordinated' path to the new system.

    •   From the same link (0+ / 0-)

      Sorry I can't help myself.  It says a lot.  Every word is good.  Hat tip to Fergal O'Brien.

      The commission's forecast ``reflects the downside risks'' to the economy, said German Finance Minister Peer Steinbrueck. ``We are facing a very serious and problematic year.''

      Europe's manufacturing industry is already shrinking at a record pace, according to data published yesterday, while executive and consumer confidence has plunged to the lowest in 15 years. Still, inflation is easing as oil prices drop, giving the ECB room to cut interest rates more.

      While the EU's outlook includes a technical recession this year and little growth in 2009, it may still be too optimistic, said economists at Citigroup Inc. and BNP Paribas, both of which have forecast a contraction next year.

      The forecasts ``are a dramatic shift for the commission,'' said Luigi Speranza, an economist at BNP in London. ``But there is more downside to come.''

  •  Homeowners Wait as Relief Plan Drags (0+ / 0-)

       * NOVEMBER 4, 2008

    Homeowners Wait as Relief Plan Drags
    By DAMIAN PALETTA and DEBORAH SOLOMON

    WASHINGTON -- Disagreements over how to structure a federal foreclosure-prevention program are complicating and potentially delaying what is likely to be the Bush administration's last attempt to forestall sliding home prices.

    The White House and the Federal Deposit Insurance Corp. are at odds over basic questions about the effort's size and breadth, several government officials said. The expectation that a new president could immediately redraw the design and scope of any plan has further delayed matters.

    The FDIC has been developing a proposal, which some estimate could help between two and three million homeowners, designed to encourage banks to rework troubled loans by providing a partial federal guarantee for losses on modified mortgages that meet specific criteria, people briefed on the proposal said. Under the plan, the government would cover roughly half the loss on reworked loans that went into foreclosure.

    I can see one of the snags this is going to hit - perhaps one that is causing a stall.  If a person owes more that the house is worth, that's one thing.  If a person took equity out of their house to buy stuff and those purchases are now greater than the value of the house, that is something else.  Many people did that.  They rode the value up to 80% or more with vacations or emergencies, whatever it was, they spent it.  That is a double default.  That is the kind of stuff that cascades.

    This program can only work for people who are upside down, but who also left the equity in.  Double defaults cannot be covered with a program like this.  If they try to write off double default debt, this cannot move forward.  It won't.  The banks wouldn't allow it.  And neither should they.

    And honestly neither should we.  That's the difference between being stupid, and stealing.  One we're willing to forgive.  The other, not so much.

  •  Bernanke Push for Lower Rates Drives U.S. Yields (0+ / 0-)

    Bernanke Push for Lower Rates Drives U.S. Yields Up(Update2)

    By Sandra Hernandez and Wes Goodman
    Enlarge Image/Details

    Nov. 3 (Bloomberg) -- Even as Ben S. Bernanke cuts borrowing costs to 50-year lows, taxpayers will likely be paying ever increasing interest rates on U.S. debt.

    The next president may find foreign investors, the biggest creditors to the U.S., unable to absorb a growing supply of Treasury bonds as the financial crisis prompts nations to invest in their own banks and currencies. That would drive up yields just as a widening budget deficit pushes borrowing needs to a record $2 trillion, according to estimates by Goldman Sachs Group Inc. and Wrightson ICAP LLC.

    ``It's hard to see how demand for Treasuries is going to keep up with supply once the risk aversion trade subsides,'' said Tony Norris, who oversees $10 billion in international strategies as chief investment officer and senior portfolio manager at Evergreen International Advisers in London. ``There's going to be pressure on yields to rise.''

    Treasury Secretary Henry Paulson may already be overwhelming investors with short-term obligations sold to finance the initial portion of a $700 billion bailout package.

  •  India, China Step Up Protection From Global Crisi (0+ / 0-)

    India, China Step Up Protection From Global Crisis(Update1)

    By Michael Dwyer

    Nov. 3 (Bloomberg) -- India and China are accelerating efforts to prop up growth as a global slump threatens the world's fastest-expanding major economies.

    ...

    ``The gathering crisis in more advanced economies is forcing Asian policy makers to jettison assumptions about the health of export sectors,'' said Mark Williams, an international economist at Capital Economics Ltd. in London. ``Interest rates will tumble.''

    Emerging Asian economies that account for one-fifth of world growth are being dragged down as their main markets in the U.S. and Europe contract, increasing the likelihood of a global recession. Policy makers in India and China are also boosting spending to prevent their economies from going under.

  •  BRICs See No Relief Even as Rally Lures Stock Bul (0+ / 0-)

    BRICs See No Relief Even as Rally Lures Stock Bulls(Update3)

    By Michael Tsang and Michael Patterson

    Nov. 3 (Bloomberg) -- Forget last week’s record 20 percent gain in emerging-market stocks. Hard times are ahead for equities in Brazil, Russia, India and China, some of the world’s biggest money managers say.

    Even with developing-nation shares trading at their cheapest levels in a decade, financial crises in Hungary and Pakistan that required international rescue packages and concern that economies from Turkey to Argentina are also teetering prompted investors to pull out of emerging-market funds at a record pace.

    ...

    "I’m not brave enough to jump on to the bandwagon," said Franz Wenzel, deputy director for investment strategy at Axa Investment Managers, which oversees $655 billion in Paris. "We have seen the first dominos to fall with Hungary and Turkey, and we might see other shoes to drop."

  •  The Change We Need (0+ / 0-)

    By Barack Obama

    At a moment like this, we can't afford four more years of spending increases, poorly designed tax cuts, or the complete lack of regulatory oversight that even former Federal Reserve Chairman Alan Greenspan now believes was a mistake. America needs a new direction. That's why I'm running for president of the United States.

    ... Obama explains details of plan.

    None of this will be easy. It won't happen overnight. But I believe we can do this because I believe in America. This is the country that allowed our parents and grandparents to believe that even if they couldn't go to college, they could save a little bit each week so their child could; that even if they couldn't have their own business, they could work hard enough so their child could open one of their own. And at every moment in our history, we've risen to meet our challenges because we've never forgotten the fundamental truth that in America, our destiny is not written for us, but by us.

    So tomorrow, I ask you to write our nation's next great chapter. I ask you to believe -- not just in my ability to bring about change, but in yours. Tomorrow, you can choose policies that invest in our middle class, create new jobs, and grow this economy so that everyone has a chance to succeed. You can choose hope over fear, unity over division, the promise of change over the power of the status quo. If you give me your vote, we won't just win this election -- together, we will change this country and change the world.

    : : :

    Of course they had to be fair and balanced. And run an article called:

    McCain's Honor

    Looked at individually, most of Mr. McCain's economic proposals are sensibly conservative, and some are even bold. They are superior to Mr. Obama's, and if implemented would make a recession shallower and shorter. [ed: Like they know.] They are also politically braver, especially his support for free trade. His [McCain's] health-care plan in particular amounts to genuine "progressive" change in the sense that it would redistribute tax benefits from the well-to-do to the uninsured working class. Mr. Obama's health plan by contrast is one more incremental -- if larger than usual -- increase in government control. But Mr. McCain was never able, or willing, to explain the differences.

    Bwahahaha.  They so funny.  

  •  New Economic Ills Will Force Winner's Hand Big (0+ / 0-)

    New Economic Ills Will Force Winner's Hand

    Big Drop in Auto Sales, Factory Output Worsen Outlook on Eve of Election; Calls for Swift Action to Loom Over Next President

    By BOB DAVIS, JONATHAN WEISMAN and TIMOTHY AEPPEL

    WASHINGTON -- With a fresh blast of bearish news hitting just before the presidential election, Tuesday's victor will be under rising pressure to put his stamp on U.S. economic policy well before his Jan. 20 inauguration.
    Election Guide

    ...

    "We're dealing with a situation that could develop into another Great Depression, if not handled properly," says Daniel DiMicco, chief executive of Charlotte, N.C.-based steelmaker Nucor Corp., who spent an hour in line on Friday waiting to cast an early vote.

  •   Fed's Fisher Says U.S. Economy May Slump Through (0+ / 0-)

    Fed's Fisher Says U.S. Economy May Slump Through 2009

    83.6% of businesses say they are running tighter credit conditions, not just for what you would have expected ...  This is what economists would call pro-cyclical behavior.  Demand has also fallen off, but the supply of credit is coming under ever-increasing, tighter conditions.  This sort of exascerbates the downward slippage of the economy.

    continues...

  •   Kornafel Says Oil May `Skyrocket' (0+ / 0-)

    Kornafel Says Oil May `Skyrocket' on Economic Recovery

    VolaTILITY IS CERTAINLY GOING TO CONTINUE OVER THE NEAR-TERM.

    dang.  cap lock.

    It's going to be a very dangerous energy market for the next couple of years.

    Basically, he was saying at the end there, that because the price of oil has dropped so low, a lot of energy players have stepped to the sidelines with there projects.  So there is the potential for the supply and demand to struggle as the economy turns around.  Once the demand comes back, the price will come back up, the players will return to the market, but they will already be behind the demand.  That is what will make it dangerous.  There is a great likelihood that the energy supply will not be able to catch up easily to the demand once the economy turns.

  •  U.S.-China Ties Require Balancing Act (0+ / 0-)

    U.S.-China Ties Require Balancing Act From New President

    US trade defecit with China has more than quadrupled since 2000.  

  •  Tay Says U.S. Protectionism Would Be `Flawed' (0+ / 0-)

    Tay Says U.S. Protectionism Would Be `Flawed' Policy

    Interesting...

    Bush administration's ties with South East Asia are less pretty.  

    I think that in these last years Bush and his administration have either been absent, they've actually been missing meetings,  they made promises for an Asian-US summit which they did not fulfill, and when they have been there they've been really too focused, single-mindedly focused about the terrorism issue -- which of course, is an issue.  But there is so much else going on in the region... that gets muddled and lost when you over-focus on one issue.

    Regarding pullout from Iraq:  If it happens precipitously, too quickly, I think it will become a hotbed again and become a danger to everyone.

    But if it's staged correctly, and done carefully, it will be fine...  These two wars have brought the American military power into question.  When you see the world's super power in these kind of quagmires, from which it cannot extricate itself, it's a problem.  But Afghanistan bears attention because it effects Pakistan, which could have a ripple effect.

    The other thing is Middle East policy.  I think both sides really need to look at this again to bring together sort of a coalition, to create a far better balance in their approach, which has been fairly unfairly seems to be too one-sided for Israel.

    continues...

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