Indian Economy Plunges in Love America! Recession Alarm Rings around the Globe! US Stocks Dive on Belief Global Recession is at Hand.UK Economy Officially on the Brink of Recession. Now, the Global Market is Allowed ACCESS in India as Markets Bleed and RBI Keeps all Interest Rates, CRR Steady. NYT Endorses Obama, Says Palin ‘Unfit for the Office’. Bhopal Must be Replicated in Every Part of India!McCain warns working classes against Obama!
Troubled Galaxy Destroyed Dreams: Chapter 92
Panic sets in as Wall Street plunges at the open
guardian.co.uk - 1 hour ago
American stocks suffered a brutal slump within moments of the opening bell on Wall Street as a sell-off in Asian and European markets spread across the Atlantic.
Wall Street plunges amid global meltdown The Standard
US Stocks Slide on Global Fears News10.net
American Genocide
mark to PoliticalForum
Communists killed over 100 million of their own people in the course
of the 20th Century (as horrifyingly documented here). But even though
we have communists here in the USA, we'll never have genocide, because
our democratic safeguards would stop evil people from getting that
much power, right?
Via Stop the ACLU, here's video of Larry Grathwol, who joined the
Weather Underground as a undercover law enforcement agent:
I brought up the subject of what's going to happen after we take
over the government. We become responsible then for administrating 250
million people … and there was no answers. No one had given any
thought to economics. How are you going to clothe and feed these
people? The only thing that I could get was that they expected that
the Cubans, and the North Vietnamese and the Chinese and the Russians
would all want to occupy different portions of the United States. They
also believed that their immediate responsibility would be to protect
against what they called the counter-revolution. They felt that this
counter-revolution could best be guarded against by creating and
establishing re-education centers in the Southwest, where we would
take all of the people who needed to be re-educated into the new way
of thinking and teach them how things were going to be. I asked, well
what is going to happen to those people that we can't re-educate that
are die-hard capitalists? The reply was that they would have to be
eliminated. When I pursued this further they estimated that they would
have to eliminate 25 million people in these re-education centers.
When I say eliminate, I mean kill … 25 million people.
I want you to imagine sitting in a room with 25 people, most of
which have graduate degrees from Columbia and other well-known
educational centers, and hear them figuring out the logistics for the
elimination of 25 million people. And they were dead serious.
The Weather Underground was headed by Bill Ayers, who went on to groom
Barack Obama for office, even launching BHO's political career from
the home he shares with fellow communist terrorist Bernardine Dohrn.
Nothing is so awful that it couldn't happen if the cesspool that
produced Barack Obama takes over our government.
--~--~---------~--~----~------------~-------~--~----~
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Rahul asks Maya, why are Dalits backbenchers
CNN-IBN
Published on Fri, Oct 24, 2008 at 19:30, Updated on Fri, Oct 24, 2008 at 20:10 in Nation section
Lucknow: There seems to be no end to the Mayawati versus the Gandhis war.
After targetting Congress President Sonia Gandhi, Mayawati has decided to take on her son and Congress General Secretary Rahul Gandhi.
The Uttar Pradesh Chief Minister on Friday ordered the cancellation of Rahul's scheduled interaction with students at the Chandra Shekhar Azaad University in Kanpur.
The orders were sent as a written directive to the university Vice Chancellor, just hours before Rahul was to arrive at the auditorium.
Rahul, however, kept his date with the students and held an interactive session with them in the cafeteria.
He also addressed Mayawati's core constituency - the Dalits - at a public meeting in the area.
"Whenever I visit schools I start from the back. Why is it that in Lucknow which has a government headed by a Dalit, all Dalit students are forced to sit at the back benches?" Rahul asked.
The Congress General Secretary drove to the university auditorium and after finding it locked, he walked to the cafeteria to interact with the students.
The SPG personnel protecting Gandhi had a tough time controlling the over-enthusiastic students.
When they pushed some students to check them, Rahul came to their rescue and instructed SPG men not to prevent the students from reaching him.
Uttar Pradesh Congress Committee President Rita Bahunguna Joshi alleged that the Chief Minister had exerted pressure on the University Vice Chancellor to get the function cancelled.
Almost a fortnight ago the Mayawati government had cancelled the allotment of land for construction of a rail coach factory in Sonia's constituency in Rae Bareli.
http://www.ibnlive.com/news/rahul-asks-maya-why-dalits-are-backbenchers-in-up/76660-3.html
Recession alarm rings around the globe! Indian People may ironically be convinced of the Survival strategy as we, the India ABLAZE have been launched into the Space. Chandrayaan would solve our economic wooes! And let us hope still better as we have to start for MARS very soon! This BASTARD mood has been injected in us since the introduction of Post Modern Manusmriti and Apartheid packed in LPG! The Poison of Neo Liberal Vaccination works into our enslaved psyche like genetically Modified Seeds which KILLs us like Silent Killer Gas Leak as it happened in Bhopal. The Government of India has ensured that the BHOPAL must be replicated in every part of US PERIPHERY India!
Wall Street slid on signs that the economic slowdown could be deeper than feared! US govt is expected to announce a list of about 20 banks in next round of companies receiving capital injections under the rescue package!
But Indian psycheis well reflected in Republican president Mac Cain`s stance in favour of the global Ruling class. Thus, Indian Caste Hindus die to see Mc cain in the White House!Two days after forecasting that the outlook for the Indian economy was "somewhat cloudy", PM Manmohan Singh today said the global economic crisis would slow down the nation's growth to 7 to 7.5 per cent this fiscal!
With Barack Obama off the campaign trail, Republican White House hopeful John McCain Friday courted working class voters slamming his rival for wanting to share out hard-earned American wealth.
Despite trailing in national polls ahead of the November 4 vote, McCain's senior advisors hope steady attacks on Democrat Obama's alleged "socialist" tendencies will draw back wavering Republicans and woo key independent voters.
As Obama "told Joe the Plumber back in Ohio, he wants to quote 'spread the wealth around,'" McCain told a rally in Denver, Colorado.
"He believes in redistributing wealth, not in policies that grow our economy and create jobs. Senator Obama is more interested in controlling wealth than in creating it, in redistributing money instead of spreading opportunity.
"I am going to create wealth for all Americans, by creating opportunity for all Americans," McCain vowed.
Dr Manmohan singh may well claim that his government of india is creating WEALTH for Indians! The Money Machine works overtime in India as well as United states of america Killing the Blacks as well as the Untouchables!
FIMIN in India diverted national revenue to save the Fat BIGGIE Capitalists and the corporates from the Worldwide Meltdown. Chettiar Chidambaram and the World Bank Gang led by RBI do work round the clock to save Money Making process. The Parliament was subverted to discuss the Indo Us Nuke deal and strategic Realliance. In the same manner, we have to wtness systematic subversions created by NDA, UPA and the Left to bypass the parliament and do everything as Mc cain promises for the americans. We love so much america just because we happen to be its PERIPHERY!
Just read what Mc cain has to say!
With Barack Obama off the campaign trail, Republican White House hopeful John McCain Friday courted working class voters slamming his rival for wanting to share out hard-earned American wealth.
Despite trailing in national polls ahead of the November 4 vote, McCain's senior advisors hope steady attacks on Democrat Obama's alleged "socialist" tendencies will draw back wavering Republicans and woo key independent voters.
As Obama "told Joe the Plumber back in Ohio, he wants to quote 'spread the wealth around,'" McCain told a rally in Denver, Colorado.
"He believes in redistributing wealth, not in policies that grow our economy and create jobs. Senator Obama is more interested in controlling wealth than in creating it, in redistributing money instead of spreading opportunity.
"I am going to create wealth for all Americans, by creating opportunity for all Americans," McCain vowed.
The stance of our Parliamentary Players are no different! We are witnessing the drama since so called Independence long before Laughter Show, Indian Idol or Big Boss!
It is the same case with every european and asian leaders!
Thus, Asian and European leaders are meeting in the Chinese capital to discuss ways to increase confidence in world markets. Chinese President Hu Jintao has said uncertainties and instability are increasing in China's economy as a result of the global financial crisis. Daniel Schearf reports from Beijing.
Leaders from over 40 European and Asian countries met in Beijing Friday to encourage solidarity in facing the crisis!
Global financial problems were at the top of the agenda as they gathered for the first day of the two-day Asia-Europe Meeting, known as ASEM.
East Asian nations have agreed to form an $80 billion fund to help each other fend off the effects of the global financial crisis. As Daniel Schearf reports from Beijing, the fund could help boost confidence in the region's markets!
Members of the Association of Southeast Asian Nations, Japan, China, and South Korea will be allowed to dip into the money when faced with a financial emergency.
Former U.S. Federal Reserve Chairman, Alan Greenspan, has predicted further negative impacts for Americans from the U.S. and global financial crisis, which he called a credit tsunami. VOA's Dan Robinson reports, Greenspan and two other current and former U.S. officials, faced tough questioning from lawmakers in a congressional hearing.
The longest-serving chairman of the U.S. central bank until he was replaced by Ben Bernanke in 2006, Greenspan called the financial and credit crisis a "once in a century credit tsunami" brought about by heavy demand for securities backed by sub-prime mortgages.
The crisis has been much broader than anything I could have imagined, Greenspan said, leaving him and other economic experts in a state of shocked disbelief.
"There's a lot of panic out there today," said Scott Fullman, director of derivatives investment strategy for WJB Capital Group in New York. "People have been saying that we're in a recession. This is the realization."
These are the Voices from United states of Ameriaca! The ultimate destination of the Ruling Brahaminical Killing Class!
Indian Economy plunges deep and deep in LOVE america! Sensex replicates Dow shamelessly as a domestic pet! It is FUN and PUN! Copulation with decopulation! What a HONEYMOON!
Global legal Firms enter India to kill the Black Untochable Indigenous communities as well as Law parcticenors in Misery! Corporates well supported by the Western Legal experts! Ratan Tata now should not be afraid to sue Ms Mamata Bannerjee stalling development and industrialisation!Allen & Overy and Linklaters are some of the UK-based firms which have got informal tie-ups with Indian law firms. They have client referral arrangements with Trilegal and Talwar, Thakore & Associates, respectively. Others like Clifford Chance have liaison offices in India.
Amid growing signs that the global economy is worsening, the White House yesterday extended an invitation to developing countries to attend a summit next month in Washington with leaders of the world’s wealthy economies. Faced with rising food and fuel prices, some of Africa’s poorest nations are struggling to lower earlier projections of economic growth by focusing on how to satisfy the basic day-to-day needs of their citizens. One avenue for attracting investment needed to keep capital flowing in to local African businesses and public works is the practice of microfinance, or supplying credit to the poor at agreed-to, flexible rates which they can afford to pay back in an acceptable time frame. But the director of the Microcredit Summit Campaign Sam Daley-Harris says that tightening pressures are being felt even in low-end borrowing circles and that such small but essential programs that can make a difference for Africans facing dire poverty are also feeling the effects of the global financial pinch.
Prime Minister Manmohan Singh on Friday blamed "failure" of international surveillance, supervision and regulatory mechanisms for the current global financial crisis and sought immediate "coordinated action" to restore confidence and "de-clog" the credit market.
Making an impressive debut at the seventh Asia-Europe Meeting (ASEM) which formally admitted India into its fold, Singh said the current international financial crisis could be attributed to three failures.
Singh, a renowned economist who had successfully launched India's reform process in early 90s, said the first cause was a regulatory and supervisory failure in developed countries.
"Massive failure of regulatory and supervisory mechanism has really been the reason for the present turmoil and if there had been a good regulatory mechanism, this would not have happened," Singh said.
Secondly, the crisis surfaced due to a failure of risk management in the private financial institutions and finally because of failure of market discipline mechanism, he said as the other 44 global leaders listened with rapt attention.
"The Prime Minister had in fact had the last word," N Ravi, Secretary (East), Ministry of External Affairs, told reporters while briefing about the first day's deliberations at the two-day summit.
Last year, law minister HR Bharadwaj had indicated easing of norms for the entry of foreign law majors in India. The proposal got shelved due to protests from lawyers in general and the BCI in particular. The BCI has now veered around to allowing the opening up, provided all stipulations pertaining to reciprocity are fulfilled.
Now it is ALLOWED! UK Legal Firms would take care for us so that Justice may be ensured!This would come as a breather to UK-based law majors such as Linklaters, Allen & Overy and Clifford Chance which have informal tie-ups with Indian law firms.The move would be pathbreaking as the Bar Council of India (BCI), which was averse to allowing market access in legal sector, has backed the proposal. Sources say that the BCI has indicated that it may consider the matter on a country-specific basis, provided there is a quid-pro-quo arrangement.
British Justice Minister Jack Straw raised the issue when he met Law Minister H R Bhardwaj in New delhi last september to discuss cooperation between the two countries in the legal sector.Straw impressed upon Bhardwaj that opening of the legal services would be in the interest of legal systems of both Britain and India.
European and Asian leaders, including Prime Minister Manmohan Singh on Friday initiated discussions to find a coordinated global response t
o stem the financial turmoil and the spectre of recession sweeping the world.
ancial crisis and maintain regional economic stability.
website of the Asia-Europe Meeting (Asem).
The Reserve Bank of India (RBI) said on Thursday it was closely monitoring financial market developments and would respond swiftly and pre-emptively to adverse external developments that could affect financial and price stability.
cut key rates to spur growth.
Industry body CII, however, said given that the RBI has already announced several measures over the past weeks to deal with the effects of the global financial crisis, the chamber understands that today's policy is on the expected lines.
suppliers and increasing limit for advance remittance for imports both for goods and services to 50,00,000 dollar without bank guarantee\stand by letter of credit are positive and would help the MSME sector.
ing a plan approved by the bank's board this week.
points and the rupee hit its record low of 50-per-dollar. At the end of today's trading, when the Sensex fell to its lowest level in about three years, there were just about 90 companies with a market capitalisation of at least one billion dollar. The benchmark stock index futures on Thursday slightly widened its discount to the spot market on unwinding of long positions and as short poistions were rolled over to the next month, analysts said.
Giants of the auto, airline and technology industries ordered emergency action against the global financial crisis on Friday as shares took a new hammering amid mounting gloom.
Technology giant Sony, a bellwether of corporate Japan, saw its shares plunge more than 11 percent after forecasting net profit of 150 billion yen (1.55 billion dollars) for the year to March, down 59 percent on last year.
h news of downgrades and defaults, finance minister P Chidambaram’s statement on Thursday that FIIs have been told to reverse transactions where they have lent stocks to offshore entities came like a strong, sweeping step that could push up stock prices by driving foreign portfolio managers to buy back the shares.
Wall Street joined world stock markets in a precipitous plunge Friday, with the Dow Jones industrials dropping more than 400 points in the opening minutes of trading. The growing belief that the world will suffer a punishing economic recession has investors furiously dumping stocks. The massive decline was caused by increasingly grim news from overseas. In Japan, shares of Sony sank more than 14 percent after it slashed its earnings forecast for the fiscal year. In Germany, Daimler's stock dropped 11.4 percent in morning trading after it reported lower third-quarter earnings and abandoned its 2008 profit and revenue guidance. Japan's Nikkei stock average fell a staggering 9.60 percent. In Europe, Germany's benchmark DAX index was down 10.76 percent, France's CAC40 dropped 10 percent while Britain's FTSE 100 sank 8.67 percent after the government said its gross domestic product fell 0.5 percent in the third quarter, putting the country on the brink of recession. The dour outlook convinced investors that the world economy is headed for a long and severe downturn despite a raft of government rescue efforts aimed at pulling the financial system from the brink. It also indicated that the tremors caused by the global credit crisis may have only begun to be felt in their true scope and magnitude.
Contending that Obama was better placed to deal with deteriorating economy and sensitive world problems, including wars in Iraq and Afghanistan, the newspaper said he was also likely to engineer sound alliances at international and national levels.
The RBI also left the cash reserve ratio, the amount of funds that banks have to keep on deposit with it, unchanged at 6.5 per cent, but lowered its 2008/09 growth forecast to 7.5 to 8.0 per cent from a previous forecast of around 8.0 per cent.
Realty sector stocks suffered the worst, with the group as a whole shaving off nearly a quarter of its wealth, followed by oil and gas, banks and metal stocks.
liquidity crunch that could hit profits. Leading private sector bank ICICI Bank has so far borne the brunt of investor concerns about its exposure to the financial crisis, repeatedly stressing it was solvent and deposits were safe since Lehman Brothers filed for bankruptcy protection in mid-September.
Feeling 'tortured' by the Left parties' repeated "questioning" of his decisions, Lok Sabha Speaker Somnath Chatterjee on Friday threatened to step down "here and now" as a protest against "insult" to the Chair.
The Speaker vent his unhappiness when CPI(M) leader Basudeb Acharia, while initiating a debate on anti-Christian violence in Orissa and Karnataka, said that for the last four days he had been pressing for a discussion on the important issue through an Adjournment Motion but it was not allowed.
ders caused by the spread of the financial crisis.
restructuring in the face of a souring economy and unfavorable exchange rates. The company, which has been selling off slower-growing units to focus on its water treatment, defense and motion control businesses, said it would spend $48 million more than it expected this year, mostly on job reduction, as it accelerates efforts to reshape itself.
That sharp rise has also hurt other manufacturing conglomerates with big overseas markets, such as General Electric Co, United Technologies Corp and Honeywell International Inc. "We are preparing for projected softening of the global economy," ITT Chief Executive Steve Loranger said in a statement.
The company plans to reduce head count at its U.S. and European operations, but gave no details. Shares of ITT fell 8 percent to a four-year low of $38.07 in early trade on the New York Stock Exchange. Also on Friday, the White Plains, New York-based company reported third-quarter earnings of $1.12 per share from continuing operations, excluding one-time items. That beat analysts' average estimate of $1.06. Sales rose 32 percent to $2.9 billion.
NDA nearly sold off Air India: Patel
Accusing the previous NDA Government of nearly selling off national carrier Air India, Civil Aviation minister Praful Patel today said the UPA has made aviation a ‘sunrise sector’.
Replying to the discussion on the Airports Economic Regulatory Authority of India Bill 2007, which was passed by Parliament, Patel lashed out at his predecessor Rajiv Pratap Rudy, saying though he spoke passionately about upholding the significance of Air India, "it was in fact during the NDA regime that tenders had been issued for selling it off ....there was a bid by Tata-Singapore for it".
He said it was also during NDA rule "that Air India lost out to competition as it was not allowed to buy new carriers".
The Minister also expressed surprise over Rudy's remark that there was a "cartelisation of Air India-Jet-Sahara". He said had this been the case then the national carrier would also have been levying congestion charges on passengers.
Patel said the UPA government has not only upheld the dignity of Air India, but it also provided passengers with "so much to choose from" with the presence of several low-cost airlines. "This has also led to the high growth in the aviation sector," the Minister said.
Promising to adhere to the suggestions of the Standing Committee on Transport, he said the Ministry will take care of the interests of the employees of airlines.
92.6% of bank deposits fully protected: Govt
Government said that 92.6 per cent bank deposits are fully protected under the Deposit and Insurance and Credit Guarantee scheme.
"As at the end of March 2008, fully protected deposits accounts constituted 92.6 per cent of total number of deposit accounts," Minister of State for Finance Pawan Kumar Bansal said in a written reply in the Lok Sabha.
He, however, ruled out the possibility of formulating any special law to protect the interests of depositors in the financial institutions. He added that the Deposit and Insurance and Credit Gurantee Corporation (DICGC) extends insurance cover to small investors in the banking system of the country.
Deposit insurance is compulsory for all banks in the country and the Deposit Insurance Scheme covers all commercial banks including local area banks, regional rural banks, co-operative banks and private banks across the country, he said.
He said that in the event of liquidation, reconstruction, amalgamation of an insured bank, every depositor is entitled to repayment of his deposit up to Rs one lakh.
Credit policy on expected lines: FM
Finance Minister P Chidambaram on Friday said the mid-term review of Reserve Bank's credit Policy was on expected lines and the central bank would take radical steps to deal with the emerging situation.
"RBI will continue to deploy both conventional and unconventional tools. We cannot rely only on conventional measures but we will have to adopt unconventional or unorthodox measures," he said while welcoming the steps taken by the RBI.
He further said that the RBI has not touched the repo rate, reverse repo rate or the bank rate or the cash reserve ratio and "this is along the expected lines."
The central bank will infuse more liquidity if necessary, he said, adding that RBI will continue to use the Liquidity Adjustment Facility window with flexibility.
RBI, he said, had taken a number of steps between October 6 and October 20 to inject liquidity into the system to deal with the credit crunch.
The central bank had reduced the mandatory deposits that banks keep with RBI by 250 basis points unlocking a whopping Rs 1,00,000 crore into the cash-starved banking system.
Besides, it has also slashed the short term lending (repo) rate by one per cent signaling softening of interest rates.
Volvo announces 850 job cuts in construction equip unit
Swedish heavy vehicles maker Volvo has announced 850 job cuts in its construction equipment unit following a decline in demand for the produ
cts globally.
"The actions we are taking now are needed in order to adjust production capacity to declining demand and to ensure that the company is coming out stronger from this downturn," Volvo Construction Equipment President, Hauler Loader Business Line, Yngve Rosn said in a statement.
Earlier, Volvo Construction Equipment had slashed 500 jobs in Sweden and now will show pink slips to additional 850 employees.
"It is estimated that out of the additional 850 employees that has now been given notice within Volvo CE in Sweden, approximately 10 per cent are white collars and the rest are blue collars," the statement added.
All Volvo Construction Equipment's locations in Sweden have been affected and negotiations with unions have immediately started.
The statement said that global slowdown in construction equipment market, which started in North America during last year, has now spread to Europe.
BJP, RSS back Hindu Jagran Manch, allege conspiracy
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Express news service
Posted: Oct 24, 2008 at 1118 hrs IST
New Delhi, October 23: On a day when various non-BJP parties demanded action against the Hindu Jagran Manch and other Hindutva organisations alleged to have a hand in the Malegaon blasts, the BJP slammed the “non-BJP forces” for “dragging the name of nationalist organisations in the terror attack” while the RSS smelt a “political conspiracy” in the whole episode.
BJP general secretary Vinay Katiyar alleged that politics was behind the allegations and demanded a CBI inquiry into the episode. “This is an old case. It’s only due to the approaching elections that such allegations are being levelled. Let the accused be arrested, and let there be a CBI inquiry into the whole episode,” said Katiyar.
The RSS, on the other hand, said there was a “conspiracy to malign Hindu organisations”. “The charges against Hindu organstions are utterly false and malicious. Violence and blasts must be condemned. But we also condemn the project to malign various Hindu organisations,” said former RSS spokesperson Ram Madhav.
On the alleged involvement of a former ABVP national executive member in the Malegaon blasts, Ram Madhav said: “None of our functionaries will ever be involved in such activities. We want investigating agencies to investigate and punish the culprit.”
Maharashtra BJP general secretary Vinod Tawde, on the other hand, saw the hand of the Sharad Pawar-R R Patil duo behind the controversy. “The argument that the RSS, the ABVP and other nationalist orgnaisations could be involved in the blasts is yet another attempt to appease the Muslims. The Congress-NCP combine, especially the Sharad Pawar-R R Patil duo here, have been making attempts to drag the name of nationalist orgnaistions in terror blasts,” he said.
Tawde, who was active in the ABVP before joining the BJP, told The Indian Express: “The Congress and the NCP are ruling both the Centre and Maharashtra. What are they waiting for if they have any proof to establish the role of nationalist organisations’ hand in the blasts?”
In Delhi, BJP vice-president Mukhtar Abbas Naqvi said the parties alleging the involvement of Hindu groups in the Malegaon blasts lacked “any credibility whatsoever”. “These are the same parties which have been proudly protecting the SIMI. They have no legitimacy and credibility in the eyes of the people,” he said.
http://www.expressindia.com/latest-news/BJP-RSS-back-Hindu-Jagran-Manch-allege-conspiracy/377266/
Maya vs Rahul: No auditorium, Rahul meets students in cafe
After Congress President, it was the turn of her son Rahul Gandhi to be targeted by Uttar Pradesh Chief Minister Mayawati when the administration of a university in Kanpur cancelled a scheduled interaction with students in its auditorium.
Almost a fortnight after the controversy over the Mayawati government cancelling the allotment of land for construction of a rail coach factory in Sonia's constituency in Rae Bareli, the gates of the auditorium in the Chandrashekhar Azad University were locked when Rahul arrived in Kanpur on Friday for the interaction with students.
UPCC President Rita Bahunguna Joshi alleged that the Chief Minister had exerted pressure on the University Vice Chancellor to get the function cancelled. She said the administration had withdrawn all security for the leader.
But an unfazed Rahul kept his date with the students holding an interactive session with them in the cafeteria.
Immediately after landing at the airport, Gandhi drove to the university auditorium and after finding it locked he walked down a kilometre to the cafeteria with students to have an interaction with them.
The SPG security personnel protecting Gandhi had a tough time controlling the over-enthusiastic students. When they pushed some students to check them, Gandhi came to their rescue and instructed SPG men not to prevent the students reaching him.
Sensex crosses record 16 milestones in a year
Mumbai (PTI): With the Sensex plunging below 9,000-point mark on Friday, the benchmark index has passed through a record 16 milestones of 1,000 points each in the past one year -- but as many as 13 of them were on the path downhill.
A year ago, the Sensex stood at 18,512.91 points on October 24, 2007, from where it has more than halved to slip below 9,000-point mark for the first time in about two and half years.
In the past one year, the Sensex scaled three milestones of 1,000 points -- from 19,000 points to 21,000 points between November last year and January this year -- but there after it has breached 13 thousand-point marks till now.
Last year, in the Mahurat trading on Diwali had been trading just below the 19,000 levels after which the index climbed two 1,000-point milestones to 21,000 on January 10, 2008.
However, after the peak the index started losing its grip which has seen it plummeting to 8,000 levels today -- falling by 13 milestones of 1,000 points.
The index has seen these levels two and a half years earlier on June 14, 2006, when the Sensex had slipped to 8,929.44 points. But it had made a sharp recovery and scaled the psychological 9,000 and 10,000 levels within a short span of six trading sessions in 2006.
Market analysts believe the bellwether index may see further downward 1000-points milestones till the end of this year as they expect Sensex to fall even below the 8,000 levels.
Dollar falls to 95.32 yen, lowest in 13 years
TOKYO (AP): The U.S. dollar has fallen to its lowest level against the Japanese yen in 13 years.
In afternoon trading in Tokyo Friday, the dollar sank as low as 95.32 yen.
Traders said the dollar is being pressured on worries about a recession in the U.S. economy amid the unfolding financial crisis.
Dollar-selling also intensified amid speculation that the Federal Reserve would cut interest rates again to shore up the sagging U.S. economy.
A strong yen hurts Japanese exporters by eroding their overseas earnings when converted back to yen.
RBI deputy: lower oil "beneficial" for BoP
Fri Oct 24, 2008 8:32pm IST Email | Print | Share| Single Page[-] Text [+] MUMBAI (Reuters) - The Reserve Bank of India (RBI) has a cushion to manage government borrowing while lower global crude prices will have a "beneficial" effect on the balance of payments, a deputy governor said on Friday.
"We have a cushion for managing for the government borrowing. I have the cushion of MSS (market stabilisation scheme)," Rakesh Mohan told reporters.
He also said the real effective exchange rate of the rupee , which slumped to a record low of 50.15 per dollar on Friday, was not very different from what it was in 2004/05.
Dow Closes Up 172 Points
Forbes - 20 hours ago
After a roller-coaster session on Wall Street, the Dow Jones industrial average swung to a 172-point gain Thursday. In a day of dramatic swings, the index fell nearly 300 points at one point.
Wall Street plunges amid global meltdown ABC Online
Stocks head for sharp decline on recession fears WOI
Short-sale can cushion dramatic fall in prices
24 Oct, 2008, 0740 hrs IST,Sandeep Parekh, TNN
Short selling is one of the most misunderstood acts in the stock market. It is therefore blamed for everything from assassinations to creation of financial market crises. In the past few months several countries have restricted or banned short selling—almost invariably with unintended and harmful consequences.
Short selling is a simple act—that of selling before buying stock. This is possible by borrowing stocks which are then sold short. Like all borrowings, these stocks must be returned by buying them subsequently from the market. If on such later date, the price is lower, the short seller makes money and if they are higher, the short seller loses money. Because of the additional sale pressure, at the time of the initial sale, the market prices of such stocks fall. As regulators do not like falling prices, they dislike short sellers.
However, this is a myopic view of short selling, because there are two benefits of short selling which not only make markets more efficient, but also cushion a dramatic fall in prices.
First, the efficiency argument. It has been seen time and again that short selling punctures market bubbles. Thus when there is excess exuberance, short sellers bring prices back to earth. This enables prices to more closely reflect reality. In the absence of an efficient market for shorting , asset bubbles like the one we are seeing deflated, actually bursts. Regulators have no problem with inefficient markets so long as they are going up, bubble creation be damned.
Second, as explained above, every short position must be reversed by purchasing from the market. Thus even in times like the present, any immediate fall in the prices is followed by a cushion of purchases (called “short covering’ ’ in market jargon) so that prices do not fall beyond a particular level. Take away the right to short and you will see a more dramatic fall in prices without a bottom as people will still sell their current holding.
The above arguments are supported by extensive data, some as recent as a few weeks back, examining recent bans in the US.
The recent move by SEBI outlawing or restricting short selling is therefore deeply disturbing not just from an economics viewpoint, but also from a market fall perspective. If we think we can become prettier by breaking the mirror, we will not only not be prettier, we’ll get some shrapnel of broken glass too.
(Courtesy: Timesofindia.com)
Rupee, shares punished; markets look to RBI
23 Oct, 2008, 1630 hrs IST, REUTERS
MUMBAI/NEW DELHI: The rupee fell to a record low and shares dipped to their weakest levels in more than two years on Thursday as a global rout of equities washed through India's markets.
All eyes were on a Reserve Bank of India (RBI) rate review on Friday, although few market watchers expected another rate cut so soon after it slashed the key lending rate by 100 basis points to 8.0 percent this week as policy makers joined central banks and governments across the world in fretting about slowing growth at home and abroad.
India's annual inflation rate is still in the double digits but data on Thursday showed it is at least declining, allowing authorities to focus on maintaining expansion and liquidity to weather the global turmoil instead of price stability.
And the oil minister offered the prospect soon of a possible cut in government-set fuel prices to ease the burden on consumers ahead of key state elections in the next two months.
"Relaxation in the monetary policy as was witnessed in the recent past are in line with the softening trend in inflation," said Indranil Pan, chief economist at Kotak Mahindra Bank.
The wholesale price index, the country's most widely watched inflation measure, rose 11.07 percent in the 12 months to Oct. 11, below the previous week's annual rise of 11.44 percent.
Inflation peaked at 12.9 percent in August and Economic Affairs Secretary Ashok Chawla said the government expected inflation at 9.5-10 percent by the end of 2008.
US crude oil has fallen to about $67 a barrel from a record above $147 in July, putting pressure on India to cut the price of fuels still controlled by the government, after it raised them by about 10 percent in June.
Some politicians urged the government for a cut to help the common man, just as it helped ailing airlines by giving them six months to pay jet fuel dues in instalments. Oil Minister Murli Deora said it was watching the price of crude and would decide in a week if administered prices should fall.
US has plundered world wealth with dollar :China paper
24 Oct, 2008, 1254 hrs IST, REUTERS
BEIJING: The United States has plundered global wealth by exploiting the dollar's dominance, and the world urgently needs other currencies to take i
ts place, a leading Chinese state newspaper said on Friday.
The front-page commentary in the overseas edition of the People's Daily said that Asian and European countries should banish the U.S. dollar from their direct trade relations for a start, relying only on their own currencies.
A meeting between Asian and European leaders, starting on Friday in Beijing, presented the perfect opportunity to begin building a new international financial order, the newspaper said.
The People's Daily is the official newspaper of China's ruling Communist Party. The Chinese-language overseas edition is a small circulation offshoot of the main paper.
Its pronouncements do not necessarily directly voice leadership views. But the commentary, as well as recent comments, amount to a growing chorus of Chinese disdain for Washington's economic policies and global financial dominance in the wake of the credit crisis.
"The grim reality has led people, amidst the panic, to realise 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 organisation, 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.
A two-day Asia-Europe Meeting (ASEM) of 27 EU member states and 16 Asian countries was set to open on Friday. Though few analysts expect much in the way of concrete agreements, Shi said it could prove momentous.
"How can Europe and Asia grasp each other's hands and together confront the once-in-a-century global financial crisis sparked by the U.S.; how can they construct a new equitable and safe international financial order?" he said.
"The world is waiting for this Asian-European meeting to achieve big results in financial cooperation."
stralia shares hit 4-year lows in Asian rout
24 Oct, 2008, 1151 hrs IST, REUTERS
MELBOURNE: Australian shares fell 2.6 per cent on Friday to close at four-year lows, joining a rout across Asian equity markets on worries that a li
kely global recession would slash company earnings.
The market quickly reversed an initial 1.1 per cent gain, helped by a late rally on Wall Street, as banking stocks slid and leading miners extended the week's steep falls on soft commodities prices.
Australia's benchmark S&P/ASX 200 index fell 105 points to 3,869.4, closing at its lowest level since November 2004 and extending heavy losses into a third day. For the week, stocks were down 2.5 per cent.
The index touched a low of 3,830.0, as shares in Tokyo slumped 7 percent and markets across the region braced for the prospects of widespread recession.
"Investors are looking at the earnings downgrades coming out of there. It has refocused people's attention on the two sides of the problem, the financial stresses and the slowing economy," said Eric Betts, equities strategist at Nomura Australia.
"Things won't improve until we can see across the valley of the economic slowdown and we get some sustained improvement in credit spreads."
Betts said further government interventions or central bank interest rate cuts would be needed to help stabilize markets.
New Zealand's benchmark NZX-50 index finished down 1.0 percent to 2,778.5. Banking and financial stocks sold off after holding firmer in recent days. National Australia Bank fell 3.1 percent and ANZ Banking Group was down 2.5 percent.
Shares in fund manager Perpetual slumped 6.8 per cent to A$43.00 after suspending redemptions in several of its funds, along with several other investment firms, to halt an exodus of cash into local banks covered by a government deposit guarantee.
Axa Asia Pacific, which also halted redemptions on an income fund, saw its shares fall 8.0 percent to A$4.14.
Leading miners Rio Tinto fell 4.3 per cent to A$64.10 and BHP lost 1.3 per cent to A$24.38, extending steep falls made on Thursday which had been prompted by a sharp slide in commodities prices.
Building materials maker Boral Ltd dropped 8.9 per cent to A$4.63 after the company said its full-year profit would be below last year's level, hurt by the U.S. home building slump.
In America Indian investors trust
Sensex cool to home heroics
VIVEK NAIR
Mumbai, Oct. 23: The sensex now marches to the heartbeat of the Dow.
The American and Indian indices have formed a unique cardiac rhythm, rising and falling as part of a gigantic Mexican wave that has rumbled through global markets over the past two months, ripping pockets and reputations.
The global financial turmoil, which has deepened in the past two months, has seen local investors scramble every morning to see how the Dow fared the previous day — an obligatory ritual in an uncertain world where paper-wealth parvenus are at risk of turning into paupers.
“Some of my retail clients are now keeping tabs on the Dow Jones Industrial Average on an almost daily basis,” said one broker on Dalal Street, where the Bombay Stock Exchange is located.
“If the Dow slides, we catch the chills,” said one bemused analyst who felt that the market was ignoring the strong talk and the pump-priming measures announced by the finance ministry and the RBI in recent weeks.
On Thursday, for instance, the sensex opened with a gap-down of 486 points from the previous close, choosing to ignore the positive signal sent by the RBI late on Wednesday when it permitted companies to bring in up to $500 million of their external commercial borrowings. Gap-down is the difference between the index’s previous close and the following day’s opening.
At any other time, the sensex might have been expected to open strong on such news. But in the troubled times, it has tended to take its cue from the Dow, which plunged 5.7 per cent on the previous night.
Today, the sensex tumbled below the 10000-level to close at an over two-year low at 9771.70, a fall of 398.20 points, or 3.92 per cent.
This is not the first time the index has set its face against positive local factors. On October 16, it plunged over 524 points at the opening bell even though the RBI had injected Rs 40,000 crore into the financial system by trimming a key reserve ratio for banks.
Broker circles blamed Thursday’s crash on weak overseas markets, which have been spooked by fears of a recession. These markets have also seen poor corporate earnings with job cuts adding to the gloom.
“The correlation between our market and theirs is the highest in times of euphoria and deep despair,” says Arun Kejriwal, director at KRIS. “It is lowest when things are normal.”
Others believe that the Dow-sensex correlation is natural since the biggest investors in the Indian markets are the financial institutional investors (FIIs), most of whom are already heavily invested in the US markets.
Gaurav Dua, head of research at Sharekhan, says the FIIs had invested over $17 billion in Indian stocks last year and have pulled out $11 billion after the crisis exacerbated this year.
P. Phani Sekhar, fund manager at Angel Broking, agreed that the Dow-sensex correlation — which is arguably closer than any other Asian regional index — has been triggered by huge FII sales this year. He reckoned they were forced to sell stocks and get into money because of the turmoil in the US.
Sekhar also blamed Indian companies for failing to acknowledge the troubles early. “They were all in denial till now about a slowdown. But while announcing their quarterly results, they have started talking about a possible slowdown,” he added.
An analyst with a foreign brokerage said the slump should also be seen in the context of a perceived global economic slowdown.
“Strong Indian companies will also be affected by the slowdown. The current share prices are reflecting this anxiety,” he added.
http://www.telegraphindia.com/1081024/jsp/frontpage/story_10013287.jsp
Inside the firm, fear and fun
Thursday morning began with the sensex dipping below 10000 points. Samyabrata Ray Goswami spent a dog day afternoon, and a bit of the gloomy morning, inside a brokerage firm on Dalal Street to track the woes, and bouts of joy, of traders and their clients. The firm requested that its name not be published.
The smiles break out a little after 1pm as the sensex recovers 100 points following the morning freefall. One of the brokers, who had remained glued to the trading screen since 9.55am, cracks a few jokes, all centred around the original Big Bull. Harshad Mehta is no more, but he remains a hero to some and villain for others.
“Ajit to Robert: ‘Raabert, Harshad Mehta ka stool test karao. Pata toh chale ki yeh bull-s*** kya cheez hai.”’
Laughter rings out, but lasts only for a few seconds. The slide has begun again.
For most brokers, like Hariom Dave, Dalal Street has been a great leveller.
The 28-year-old stock dealer, employed with a small, family-run brokerage firm on the street that has seen many dreams, and mega-bucks, made and unmade, is now living through the other side of euphoria.
“I have only seen the good days at the markets. It is time for me to see the other side now. That’s what makes one gritty, builds strong nerves,” he says, climbing a paan-stained staircase leading to a grubby corridor that takes one to his three-room office.
Dave has been with the firm for over 10 years. His father worked here before him.
Inside, dealers sit staring at the trading terminals and mouth expletives as the Reliance Industries scrip takes a tumble — the company’s lowest since December 15, 2006. The behemoth is down to Rs 1215.25 from over Rs 3,000 in January.
Dave and most of his clients are worried but not Mohammed Hanif (64).
Hanif shoves a fellow client for a better look at the computer screen — spilling a cup of tea over his keyboard in the process — but seems nonplussed. The garment trader, who sets aside a small amount every month for investing, says he is disturbed but not nervous.
“I have been playing the markets for the last 40 years. I have seen upheavals. But eventually it will all pass. I look at the long term and invest prudently, not on the basis of rumours. I have stayed on with this firm since I first entered Dalal Street. I am not running away scared, because some people in the US have acted silly. My children are settled. Playing the markets is not a necessity for me,” says the veteran of many bourse battles.
Dave settles down at his seat and after peering at his terminal, starts making calls to clients, asking them whether they want to buy or sell Reliance shares.
Most advise him to hold on. Some even place “buy” orders.
As banking stocks start getting battered, Dave’s colleague Amrit puts his head down on his terminal briefly.
“I have some SBI shares, didn’t expect a 4.8 per cent drop,” he says, but is soon up taking calls from clients for sell orders.
“There is little time to mourn your losses while trading goes on. It is tough to handle other people’s money after having lost yours. But we do it every day,” says Dave, who, like Amrit and most of his colleagues, also takes trading calls for his personal stocks between client calls.
“In fact I make more from the markets, or used to make, than from commissions here,” says Dave, who leaves his home in the suburb of Vikhroli at 6 in the morning to reach BSE by 8.30.
They have a morning meeting before the markets open at 9.55.
“Once trading starts, it is a daze till the closing bell at 3.30pm. Lunch is after that,” says Dave.
But dry farsan — besan-based fried Gujarati snacks – and many cups of tea do the rounds in between.
The tension eases a bit around 1.15 as the market limps up 100 points. But the jubilation is short-lived as scrip after scrip starts taking a nosedive.
The phones ring incessantly as clients begin placing sell orders.
Then the index bottoms out for the day and stands still at 9771.70, down nearly 400 points.
The dealers stare at each other and quietly start stretching themselves.
Dave wipes the sweat that has collected on his forehead in spite of the air-conditioner.
Amrit gets up and goes out for a smoke in the corridor: it’s not public space, he argues.
Clients chatter, discussing the day with dealers, with many of whom they share over decade-long associations.
The curtain falls. The play is over.
“I am famished,” announces Amrit as he makes a re-entry. The stock tumble is behind him, at least for now.
The older dealers pull out their lunch boxes.
Amrit and Dave head downstairs for the numerous food stalls lining the street.
In an hour, post-trading work will resume as they don coats of relationship managers for the firm’s bigger clients and visit them to discuss the next day’s strategy.
“Because tomorrow is another day,” Dave says, Scarlett ’Hara style.
http://www.telegraphindia.com/1081024/jsp/frontpage/story_10013288.jsp
US infant mortality rate now worse than 28 other countries
By Patrick O’Connor
18 October 2008
A report issued Wednesday by the Centers for Disease Control and
Prevention (CDC) documents how the infant mortality rate in the United
States is growing in relation to other countries. The study, "Recent
Trends in Infant Mortality in the United States," found that at least
28 other countries now have lower death rates for infants in the first
year of life.
The US's relative position has declined steadily. In 1960, it had the
12th lowest infant mortality rate, but by 1990 had dropped to 23rd
place, and by 2004—the latest year of the CDC's comparative world
figures on living standards—the US ranked 29th. The most recent study,
published in July and titled "The Measure of America," estimated that
the US is now in 34th place.
The CDC report found that there was no improvement in the incidence of
US infant deaths between 2000 and 2005, a "plateau in the US infant
mortality rate represent[ing] the first period of sustained lack of
decline in the US infant mortality rate since the 1950s." This "has
generated concern among researchers and policy makers," the report
noted.
For the year 2000, the infant mortality rate was 6.89 per 1,000, a
rate that remained stagnant for five years before declining slightly
to 6.71 between 2005 and 2006.
The CDC noted: "The impact of child mortality is considerable: there
are more than 28,000 deaths to children under 1 year of age each year
in the United States."
Several countries in Scandinavia (Sweden, Norway, Finland) and East
Asia (Japan, Hong Kong, Singapore) have an infant mortality rate below
3.5, almost half the US rate. The CDC's 2004 rankings placed the US in
a tie with Poland and Slovakia, and only marginally ahead of Puerto
Rico and Chile. The US was behind every developed country in North
America, Western Europe, and Australasia, as well as Cuba, Hungary,
Israel, and the Czech Republic.
Infant mortality is a critical indicator of social progress. As the
CDC report explains, "Infant mortality is one of the most important
indicators of the health of a nation, as it is associated with a
variety of factors such as maternal health, quality and access to
medical care, socioeconomic conditions, and public health practices."
This decline in world rankings is another expression of US
capitalism's decay. The gutting of social programs by successive
Democrat and Republican administrations over the last four decades has
led to an extraordinary social reversion. A tiny layer at the top has
enriched itself through the dismantling of all impediments to the
accumulation of private wealth and corporate profit, supported by tax
cuts and the slashing of investment in critical social infrastructure.
That infant mortality rates are now stagnating for the first time in
five decades underscores the accelerating character of the social
crisis.
The CDC report documented the disparity of infant mortality rates
among racial classifications. "Non-Hispanic white," Latino, and Asian-
American children had lower than average rates, while "American Indian
or Alaskan Native," Puerto Rican, and "non-Hispanic black" families
had higher rates.
The report noted, however, that the "infant mortality rate did not
change significantly for any race/ethnicity group from 2000 to 2005."
In 2005, African-American infants suffered a death rate of 13.63 per
1,000 births, by far the highest average. The CDC's 2004 world
rankings indicate that a black American baby would have a better
chance of survival if born in Russia (which has a rate of 11.5) or
Bulgaria (11.7).
The CDC report did not assess infant mortality in relation to social
class or family income.
Another study released earlier this month, however, documented this
correlation. Published by the Robert Wood Johnson Foundation and
titled "America's Health Starts With Healthy Children: How do States
Compare?" the report found: "In almost every state, shortfalls in
health are greatest among children in the poorest or least-educated
households, but even middle-class children are less healthy than
children with greater advantages. Within each racial or ethnic group,
a steep income gradient is evident. Children's general health status
improves as family income increases."
It also reported: "Nationally, and in every state, infant mortality
rates increased with decreasing levels of mothers' education." The
mortality rate for children whose mothers had completed 16 or more
years of school was 4.2 deaths per 1,000 births, compared to 7.8
deaths for children whose mothers had completed 11 years or less of
school.
The failure to improve the infant death rate between 2000 and 2005
came despite significant advances in medical technology, including
care for prematurely born babies.
What the CDC termed "preterm birth"—i.e., those at less than 37 weeks
gestation—is a key risk factor for infant mortality. In 2005, 69
percent of all infant deaths occurred to preterm babies. The report
stated: "The plateau in the US infant mortality rate from 2000 to 2005
was largely due to the combination of the increase in the percentage
of very preterm births and the lack of decline in the infant mortality
rate for these births."
Only those parents who can afford to pay for treatment can be sure
that their premature babies will receive the necessary care.
Similarly, many families are finding it increasingly difficult to
afford the advanced medical treatment which many infants require in
their first year. About 45 million Americans, or 15 percent of the
population, are now estimated to be without any form of health
insurance.
At every level, corporate control over the health care system distorts
and undermines the rational provision of medical services. Per capita
US health spending was $6,714 in 2006, more than twice the average of
other advanced countries. But this spending has failed to improve the
population's health. Infant mortality is one indication of this;
another is the extraordinary fact that 41 countries now have a longer
life expectancy than does the US.
Official per capita health spending figures are in fact misleading. If
the resources invested in genuine medical care and treatment were to
be calculated and compared, there is little doubt that the US would
rank far below many other countries. A substantial portion of
purported American health spending is simply siphoned off as profit by
the major health firms, insurance companies, and pharmaceutical
interests.
Paulson Is Said to Plan Buying Stakes in Regional U.S. Banks
By Robert Schmidt
Oct. 24 (Bloomberg) -- Treasury Secretary Henry Paulson is preparing
to take stakes in a number of regional U.S. banks as he seeks to halt
the freeze of credit to businesses and households, according to a
person briefed on the matter.
The Treasury may announce the plans as soon as today, the person, who
was briefed by bankers and Treasury officials, said on condition of
anonymity. The purchases would be the second round in a $250 billion
program to inject capital into financial companies, after an initial
$125 billion was allocated to nine of the largest banks.
Regional lenders, already suffering from the housing slump, are now
getting hit by rising loan delinquencies as the economic downturn
deepens, with unemployment at a five-year high. The 19- member
Standard & Poor's 500 Banks Index has lost half its value in the past
year.
``We're going to give them initial indications very quickly,'' Neel
Kashkari, the interim Treasury assistant secretary running the
department's financial-rescue office, told lawmakers yesterday,
referring to the next group of banks to get government stakes. ``It
will be a few weeks before the next batch are actually funded,'' he
told the Senate Banking Committee.
The decision to buy stakes in more lenders comes after some of the mid-
sized American financial institutions report mounting losses. National
City Corp., Ohio's largest lender, Oct. 21 posted a wider loss, put
aside more money for unpaid loans and announced plans to eliminate
4,000 jobs. Its third-quarter net loss widened to $729 million, from
$19 million a year earlier.
SunTrust Seeks Funds
SunTrust Banks Inc., Georgia's largest lender, posted a 26 percent
decline in third-quarter profit yesterday. The bank's board authorized
the sale of $1.6 billion to $4.9 billion in preferred shares to the
U.S. Treasury, Chief Executive Officer James Wells said in a
conference call.
Paulson's focus on injecting funds into banks is a shift away from his
initial emphasis on unclogging balance sheets by purchasing troubled
mortgage-backed assets from financial institutions. Last week, the
Treasury agreed to take stakes in nine firms including Citigroup Inc.,
Morgan Stanley and Bank of America Corp.
Congress three weeks ago approved a $700 billion rescue package that
gave the Treasury wide authority to buy and guarantee assets to
prevent a U.S. financial collapse.
Equity purchases ``are on the front burner and the heat is under the
pot,'' said Wayne Abernathy, a former Treasury official who is now an
executive vice president with the American Bankers Association, a
group that represents lenders of all sizes.
`Markets Deteriorated'
Paulson had to shift gears because ``markets deteriorated much more
quickly than we had expected,'' Kashkari, a 35-year-old former Goldman
Sachs Group Inc. banker, told lawmakers. Taking stakes in banks
offered a faster way to inject funds, he said.
The person briefed on the matter didn't identify the financial
companies getting the next round of money, or specify the total
amount. Firms have until Nov. 14 to apply for government funds, though
the department has indicated it may extend that for some, such as
those that are privately held.
The Treasury's plans to buy devalued assets such as mortgage- linked
bonds and collateralized debt obligations are weeks, though ``not
months'' away from being put into effect, Kashkari said.
Congress gave the Treasury 45 days, or until mid-November, to publish
guidelines for how it would identify, value and purchase the assets. A
Treasury official said then that it would take at least four weeks
until the first auction was set up in an effort to price the toxic
securities.
Search for Managers
While the Treasury picked Bank of New York Mellon Corp. to keep the
books for the purchases, it is still completing a review of more than
100 bids to serve as asset managers, Kashkari said.
The aim of the asset purchases is to help restart a market for the
securities, providing benchmark prices and inducing private capital to
return.
Both Republicans and Democrats on the banking panel yesterday urged
the Treasury to use its new authority -- and a chunk of the bailout
money -- to help the millions of American homeowners who are facing
foreclosure.
The Bush administration hasn't shown ``the required dedication'' to
curb mortgage foreclosures, Christopher Dodd, the Connecticut Democrat
who chairs the Senate banking panel, said at yesterday's hearing.
Richard Shelby, the committee's top Republican, said that unless the
government deals with housing problems, ``we're going to be wasting a
lot of money.''
Kashkari told the panel that the Treasury is ``looking very hard'' at
a proposal by Federal Deposit Insurance Corp. chief Sheila Bair to use
federal loan guarantees to entice mortgage servicers to modify loans.
Bair's agency is developing experience in changing mortgages to make
them more affordable after taking over IndyMac Bancorp Inc., the
failed lender seized by regulators in July. The Treasury could offer
``loan guarantees and credit enhancements'' to help persuade the
holders of home loans to modify them, Bair told the Senate committee
yesterday.
To contact the reporter on this story: Robert Schmidt in Washington at
rschmidt5@bloomberg.net
Housing crisis accelerates blight in Detroit neighborhoods
By Debra Watson and Anne Moore
21 October 2008
Dire conditions in a once prosperous East Side Detroit neighborhood
underscore the impact the wave of home foreclosures is having on
working people across the United States. While the effect of the
mortgage crisis on the Wall Street banks is headline news, the media
rarely inquires into the social consequences of the foreclosure
epidemic.
Some three-quarters of a million people have lost their homes across
the US so far this year and foreclosure filings are up 82.6 percent
from a year ago, according to the web site ForeclosureS.com. The same
report notes that 107,500 homes were lost in September alone.
The city of Detroit has the highest repossession rate for a major city
in the US, with real-estate owned (REO) homes—that is, homes
repossessed by banks or mortgage holders—at 3.7 percent in 2007.
Cleveland, Ohio came in a close second with a 3 percent REO rate.
The social reality behind these figures is illustrated by a recent
sale of a foreclosed home in Detroit. In September, a modest two-story
single-family home on Detroit's east side near the Detroit City
Airport sold for one dollar. Less than two years ago, in November
2006, the same home sold for $65,000.
While abandoned homes are hardly a new phenomenon in Detroit, the
story of this one house is a testament to the speed, scope, and depth
of the foreclosure crisis. The one-dollar sale of the Detroit house
even made the Sunday Times of London, which recently ran a piece
titled "America's Darkest Fear: to end up like Detroit."
The WSWS interviewed Constance and her stepdaughter Toshiana, who live
near Detroit City Airport. As Toshiana explained: "I actually am
surprised that you came and talked to us at all. When the news came
they all were taking pictures of the place up the street that sold for
a dollar.
"We finally came out to see what it was about, why the news trucks
were here. It took three days before they finally came to us and asked
the people on the block what they thought. I don't think they really
care about people like us and what we think."
Prior to the collapse of auto manufacturing in Detroit, the
neighborhood had been relatively prosperous and home to thousands of
autoworkers. Now, foreclosed properties are lowering home values and
causing urban blight throughout the area. Constance rents a house on
the same street as the foreclosed home and grew up nearby.
"I heard about the house up the street selling for one dollar,"
Constance told the WSWS. "They had just fixed it up real nice a year
and half ago, new siding, things like that. It looked beautiful. Now
it's a mess."
Last summer the bank foreclosed on the home after the owners fell
behind on their mortgage. "They had some renters come in and then it
was empty. It didn't take long for them to come and strip the place
clean," Toshiana said.
"When I was a baby my father was at an auto plant," Constance added.
"He had a brother working at the plant also. I had another uncle who
worked at Dodge Main in Hamtramck. They all came up from the South in
the early 1970s. There are not many people around here at the plants
anymore. My mother says she is leaving Michigan and moving back to
Louisiana as soon as she retires."
The term "toxic mortgage" only begins to describe the effect of the
housing crisis on working class communities across the US. The family
that falls behind on mortgage payments or rent is out on the street.
Neighborhoods become distressed. Abandoned houses catch fire and burn—
a common phenomenon in Detroit—producing a noxious odor that permeates
whole neighborhoods for months.
Toshiana noted the absence of the most basic services in the city of
Detroit. "We don't even have a grocery store anymore."
She continued, "You actually have to go back to the early '90s to see
when all this started to happen. I could tell you a couple blocks I
lived on in Detroit that I watched gradually torn down. They were
really nice when I was there, but what happened? One place, I came
back five years after I had moved, just to visit. I could not believe
what had happened. The place was a mess; the houses were in terrible
shape.
"Look around here. All you see are empty lots. Realtors may call these
an investment opportunity, but who wants to live next to an empty lot?
Scrappers make money off tearing the houses up. I really don't
understand why they even give out junking licenses, when they know
this is going on in the neighborhoods. The decline is very ugly."
According to a report in the August 13 Detroit News, there are now
several properties listed for one dollar in Detroit, including a
single family home and a duplex. In some cases subprime lenders, "find
themselves the owners of whole neighborhoods of vacant, deteriorating
homes."
"My 14-year-old son could buy a block of Detroit property," said a
representative of the realty management firm that sold the one-dollar
house.
Foreclosures are rising in several metropolitan areas across the state
of Michigan. According to figures released by RealtyTrac, the state as
a whole ranked fourth nationwide in the total number of foreclosure
filings in August, with 13,605. Foreclosure filings rose 17 percent
over July levels. Michigan ranked fifth nationwide in foreclosure
filings, with one for every 332 households. That compares with a
national rate of one filing for every 416 households.
A 2006 Association of Community Organizations for Reform Now (ACORN)
report, "The Impending Rate Shock," singled out Detroit as one of the
cities likely to experience a housing disaster. In 2005 more than half
the home purchase loans made in Detroit were high-cost loans, "making
the city particularly vulnerable to rate shock," the report noted.
There were 23 metropolitan areas in the US where high-cost loans
represent at least one of every three loans made to homebuyers.
Obama, the economic crisis and war
24 October 2008
While the world's attention has been focused on the global economic
crisis, the United States has continued to prosecute its neo-colonial
war in Iraq and has expanded its military violence in Afghanistan and
the adjoining border regions of Pakistan.
Early Thursday morning, a US drone fired four missiles into a
religious school, or madrassa, in a tribal area of Pakistan's North
Waziristan, killing 11 people, according to Agence France-Presse. It
was the latest in a series of US strikes into Pakistan, including at
least one commando raid by Special Forces ground troops, launched
since the beginning of September. That the US has embarked on a
deliberate policy of spreading its war of occupation in Afghanistan
into Pakistan was underscored by last month's revelation that
President Bush signed a secret order in July authorizing the use of
American ground troops in Pakistan.
In Afghanistan itself, the US and its NATO allies have stepped up
their attacks on military and civilian targets in an attempt to stem a
widening war of resistance against foreign occupation. An overnight
airstrike by US-led coalition forces in Khost Province in eastern
Afghanistan killed nine Afghan soldiers, in an apparent "friendly
fire" incident. The civilian toll from US air strikes has risen
sharply in recent months, including an attack on an alleged Taliban
compound last August that killed more than 90 civilians, a majority of
them women and children.
Human Rights Watch reports that American and NATO air strikes have
killed some 500 Afghan civilians over the past five years, very likely
a serious underestimation of the actual toll. As the New York Times
reported on Thursday, "The latest air strike came as fighting in
Afghanistan reached its highest level since late 2001," i.e., in the
first months of the US invasion.
The deteriorating US military and political situation in Afghanistan
has become a focus of the presidential election, with Democratic front-
runner Barack Obama taking the lead in pledging a major escalation of
the US intervention. In a campaign speech in Virginia on Wednesday,
Obama said he would order a surge of US troops, perhaps 15,000 or
more, as soon as he gained the White House. "It's time to heed the
call ... for more troops," he declared. "That's why I'd send at least
two or three additional brigades to Afghanistan."
Obama has brushed off as a "rhetorical flourish" statements made at a
Seattle fundraising event by his running mate, Senator Joseph Biden,
that within six months of Obama's inauguration, the new president
would respond to a major foreign policy crisis by taking "incredibly
tough" and unpopular decisions. Biden cited five possible flashpoints—
the Middle East, Afghanistan, Pakistan, North Korea and Russia.
That Biden's chilling remarks were no mere "rhetorical flourish" is
substantiated by a lengthy article published in Thursday's New York
Times by the newspaper's White House correspondent, David E. Sanger.
Discussing the foreign policy positions advanced by Obama and his
Republican opponent, Senator John McCain, Sanger points to key areas
where Obama has articulated an even more aggressive posture than
McCain.
On Iran, for example, the McCain campaign has suggested that it would
be willing to accept a deal that allowed Iran to produce uranium on
its territory, while the Obama campaign told the newspaper that an
Obama White House "would not allow Iran to produce uranium on Iranian
soil, the same hard-line view enunciated by the Bush administration."
Sanger notes that Obama has declared that "we will never take military
options off the table" and that he would not give the United Nations
"veto power" over a decision to hit Iranian nuclear facilities. Sanger
goes on to say that US intelligence officials claim the "threshold"
for a possible military strike—the point where Iran produces
sufficient nuclear material to build a weapon—"may be crossed fairly
early in the next presidential term."
Obama has also suggested that the US should impose a blockade on
Iranian imports of gasoline and refined petroleum products. Noting
that the Bush administration has stopped short of proposing such a
move, he writes, "A blockade, however, could constitute an act of
war..."
On Pakistan, Sanger writes, "it is Mr. Obama who has been far more
willing than Mr. McCain to threaten sending in American troops."
Obama, no less than McCain, speaks as a representative of the American
ruling class, which will determine the foreign and military policy of
the United States in accordance with what it perceives to be its
global economic and strategic interests.
The economic crisis, global in scope but centered in the decline of
the world economic position of American imperialism, will inevitably
drive that policy in an even more aggressive and belligerent
direction, regardless of which capitalist party occupies the White
House. The economic crisis injects into world affairs an ever-greater
element of tension and conflict between rival imperialist and
capitalist nations.
Even more so than in the previous decade, the United States will seek,
under conditions of financial turmoil and economic slump, to offset
its economic decline by military means. It is necessary to learn the
lessons of history. The last great world economic crisis—the
Depression of the 1930s—set off escalating military conflicts that
culminated in the holocaust of World War II.
The 2008 elections, unfolding under conditions of deepening recession
and escalating military violence, demonstrate the immense dangers
posed by political illusions in Obama and the Democratic Party. Once
again, the enormous anti-war sentiment of the American people has been
preempted by being channeled behind the Democratic wing of American
imperialism.
Should Obama win the election, as appears increasingly likely, the
struggle against militarism and war will be waged against his
administration.
Barry Grey
US layoffs mount and home foreclosures rise, a social catastrophe
By Patrick O’Connor
24 October 2008
Indicators of a worsening social crisis in the US are mounting daily
as the economic downturn takes an ever greater toll on jobs. Further
layoffs were announced yesterday in the US and around the world. New
data was also released showing escalating numbers of American families
losing their homes through foreclosure, further driving down house
prices.
A Reuters roundup of some of the US corporations which have made major
layoff announcements in the last two days alone included:
• Chrysler, which announced an additional 1,825 layoffs on Thursday
• Goldman Sachs, which said it will cut 10 percent of its staff, or
almost 3,300 jobs
• Pharmaceutical giant Merck, which announced it is shedding 12
percent of its workforce
• Biotechnology company Maxygen, which said it will cut nearly 30
percent of its workforce
• Money manager Janus Capital Group, which is sacking 9 percent of its
workforce
• Xerox, which said yesterday it will cut 5 percent of its staff, or
3,000 positions
• Mining equipment maker Terex Corporation, which is laying off
hundreds of its workers
• United Parcel Service, which announced plans to cut an unspecified
number of jobs next year
• Fidelity National Financial Inc., which announced it will slash
1,000 jobs and cut pay by 10 percent
• Financial services conglomerate Popular Inc., which is cutting 600
jobs and closing more than a quarter of its branches in the US.
The US Labor Department reported that new applications for
unemployment insurance increased by 15,000 to 478,000 in the week
ending October 18, significantly more than was anticipated by
economists. A year ago, new jobless claims stood at 333,000.
The Labor Department also found that inflation-adjusted wages for non-
managerial workers declined by 1.9 percent in the twelve months up to
September. This extraordinary figure indicates the extent to which the
social position of the working class is being further undermined as
the financial crisis and recession unfold.
The Washington Post yesterday reported that leading temp agencies are
receiving far higher numbers of inquiries from job-seekers, including
from people who are currently working but fear for their jobs. The
article noted that many desperate workers "are also willing to make
less money, even as the cost of living goes up." An example was call
center jobs that paid $9 an hour last year but now pay $8.50.
Workers in the auto industry continue to bear much of the brunt of the
growing assault on jobs and conditions. Chrysler announced 1,825
layoffs through the elimination of a shift at an assembly plant in
Toledo, Ohio and said it would bring forward the closure date of a
plant in Newark, Delaware that had been scheduled to close in December
2009.
Chrysler released figures yesterday revealing that it lost more than
$1 billion in the first six months of 2008. Standard and Poor's has
said that both Chrysler and GM may run out of cash in 2009 as auto
sales fall to their lowest level since 1991.
Germany's Daimler AG, which has a 19.9 percent stake in Chrysler, said
yesterday it was revising the book value of its stake to zero. This is
down from $220 million three months ago and $1.2 billion at the end of
2007.
GM is in an equally severe crisis. A JPMorgan analyst told Reuters he
expects the company to lose more than $12 billion next year. Like
Chrysler, GM is slashing costs ahead of a potential merger between the
two companies.
international parts subsidiary, a measure which will inevitably lead
to further job losses. The company also said it will suspend many
salaried employee benefits, including matching contributions for
workers' 401(k) retirement plans.
Volvo AB said yesterday it would sack 850 more workers at its
construction equipment unit. This follows an earlier announcement of
500 layoffs in the same unit, as well as 1,400 layoff notices issued
to workers at truck factories in Sweden and Belgium.
Volkswagen plans to cut most or all of its 25,000 temporary staff. A
Volkswagen spokesman denied the report, insisting that no decision had
yet been reached.
million Polish workers in Britain and Ireland, i.e., 400,000 people,
will either return to Poland or move to another country to try to find
work. According to a number of reports, the exodus has already begun,
with thousands of Polish workers relocating, either in response to
being laid off or to the British pound's poor exchange rate, which has
sharply reduced the value of immigrant workers' wages sent back to
their families.
declining house prices and increased foreclosures. But nowhere is the
crisis more severe than in the US.
foreclosure filings—that is, default notices, auction sale notices and
bank repossessions—were reported on 765,000 properties in the three
months ending in September, up 71 percent from the third quarter in
2007. Six states—Nevada, California, Florida, Ohio, Michigan, and
Arizona—accounted for more than 60 percent of all foreclosure
activity. Nevada recorded the highest foreclosure rate, with one out
of every 82 housing properties issued a foreclosure filing.
probably underestimate the situation. Several states have passed new
laws requiring lenders to issue extended notices before filing default
notices. These laws artificially suppressed September's foreclosure
figures by temporarily postponing the full impact. Rising unemployment
will further accelerate the catastrophe.
total of 851,000 had been repossessed by lenders since August of 2007.
Suisse, told BusinessWeek he expects that more than 5 million American
families will lose their homes through the year 2012. He said 1.69
million families will lose their homes in 2008.
period, the family home was widely regarded as the primary asset to
fund people's retirement, their children's college education, and even
to cover unanticipated health expenses. But yesterday, the Federal
Housing Finance Agency reported that house prices in August were 5.9
percent lower than they were a year earlier. The decline was the
greatest recorded since 1991, when data was first collected.
Jim Kirwan
10-23-8
The ‘new’ global financial systems created for the twenty-first century have exceeded all boundaries, and this New World Order’s grab for worldwide domination must be allowed to crash and drown in its own excesses.
One of its primary architects, Alan Greenspan, who headed the privately owned Federal Reserve ‘Bank’ for eighteen and a half years, a character of truly mythic proportions at least in his own mind said today: “that he and others who believed lending institutions would do a good job of protecting shareholders are in “a state of shocked disbelief,” according to the Associated Press.
He said that the financial crisis had exposed a flaw in his and others’ free market ideology. Banks and investment firms did not do a good enough job analyzing the risks of the home mortgage market, and some types of derivatives should have been subject to more regulation.” (1)
In other words Greenspan now agrees with his critics of the government and of the privately owned Financial-Frankenstein that he and his owners created: However his re-cognition and befuddled enlightenment will do nothing about replacing the eight trillion dollars that has just been lost due to these massive thefts that are still going on.
At some point in his rambling answers to the News Hour tonight Greenspan at first seemed mystified that he and his tribe could have been wrong; but then he quickly tried to justify this ‘error’ by saying that ‘these transactions were just too complicated to be properly tracked.’
What he failed to discuss is that these complications were put in place to hide the truth of what was going on in every area of that type of finance which lives far above the clouds of either oversight or regulation: It should be noted that these corporate Titians are huge because their massive systems are that way on purpose, to keep from inquiring minds all the dirty little secret-dealings that have brought the world to the edge of oblivion.
Regulations were put in place after the Crash of 1929 to insure that this kind of thing never happened again. From that day to this, the descendents of the Robber-Barons have been slaving away to eliminate those safe-guards in order to reap what they see as their just-revenge for having been challenged and restrained, for their crimes of that long ago collapse of the public’s trust.
An international agreement must be created to outlaw forever, the kind of global banking practices that led us all to this place without any shelter from the folly of their criminal attempts, to crash the global economic systems of the world. This is actually as important, or perhaps even more so, than the international agreements that were created to govern the Rules of War.
Before the twelve central banks and their inbred families existed; nation-states theoretically protected their own interests in a hostile and all too dangerous world. So while certain nations could become enslaved or stolen; the entire world was not infected by these money-changers that have been trying to steal everything monetary from everyone that uses the current monetary system. So how did we get here?
“During the Clinton administration, the government required the financial industry to start expanding the frequency of mortgage loans to consumers who might not have qualified in the past.
When George W. Bush was named president by the Supreme Court in December 2000, the stock market had begun to decline with the bursting of the dot.com bubble. In 2001 the frequency of White House visits by Alan Greenspan increased.
The Federal Reserve began cutting interest rates, and by 2002 a home-buying frenzy was underway. Fannie Mae and Freddie Mac went along by guaranteeing the increasing number of mortgage loans.
According to a mortgage broker this writer interviewed, word began to come down through the mortgage banks to begin falsifying mortgage applications to show more borrower income than borrowers actually possessed. Banks that wrote mortgages began to offload them when Wall Street packaged them into mortgage-backed securities that were sold around the world as bonds to investors.
Risk-analysts at the leading credit-rating agencies, such as Standard and Poor’s, Moody’s, and Fitch, gave their highest ratings to mortgage-backed securities whose risks were later acknowledged to be grossly underestimated.
Mortgage companies, with Alan Greenspan’s endorsement, began to offer more Adjustable Rate Mortgages (ARMs), loans that would reset at much higher rates in future years.” (2)
The point behind consolidating all the trade and monetary policies of the planet under a huge global protectorate was not designed to enable a better world: No, this was designed to force the bulk of the world into complete surrender to a shadow-government of ancient criminal dimensions that have always hungered for a Global-Empire where all resistance would be futile!
This is reminiscent of that children’s nursery rhyme:
Humpty Dumpty sat on the Wall.
Then Humpty-Dumpty had a Great Fall,
And all the Kings Horses
And all the Kings Men
Could never put Humpty together again!
In this case; Wall Street should be walled-off and the egg-shaped World of Humpty-Dumpty, should be returned to their individual states and nations with international fire walls that keep them all separate forever. That way nations that have no rules, no oversight and no standards for clear values of properties or investments, need not be allowed to infect those states and people that do have oversight protections and actual international standards for loans and investments that can be easily understood and tracked.
This would assure investors and others that they need not fear that what they thought were sound investments might suddenly just go up in smoke.
Since this crash was fostered and promoted as much by Corporate States, as it was by the scheming connivances of the Money-Changers and their pawns: perhaps it’s time to subject The Corporatocracy to new rules—rules that would limit their lifetimes and rules that would add new corporate responsibilities to their sole purpose; which is to make money without any consideration for anything else that might directly limit or effect their illicit profits.
Ordinary people are not allowed to just “make money” to the distraction of all else: so why not limit corporations to the same set of responsibilities that people have put up with, which includes an end to life as well. (In theory corporations can now live forever).
If the world does not begin this process, then the Corporate States will certainly win if there is a next time, and we will lose everything to them because they are like infants in the crib that worry about nothing except their single-minded purpose: In this case, “making money!”
Imagine how different the world would be if Corporate Charters had to include percentages of shared profit with those that work for them, as well as having to pay for the resources they currently use for free, and then pollute, until they kill the land the water and the air, wherever they chose to place the mini-prisons of their offices and factories. We jail people that are anti-social, or who trash the communities they live and work in: why not do the same to corporations?
The government ought to use some of those taxes we pay to give the public real health-care. Then we could end all those extortionate insurance companies and the medical industry that lobbies congress on everything from health care to medications. This government has taxed this nation to death; and we have nothing whatever to show for all that money except two failed wars, and millions of tons of bombs, bullets and no-bid contracts. And believe it or not this is almost entirely due to the rarified air of the Corporate-climate in America!
Unchecked Capitalism is a cult and needs very careful watching because it is no friend to ordinary people, or even to those that work for them. But "Hey—it’s just business.” If that’s a good enough explanation to us, for their treatment of those who are not part of their upper-crust; then it ought to be the ‘standard’ by which corporations are judged, when it comes to the terms under which they are allowed to do business in any community.
Workers should enjoy some of the benefits that they have produced for the company. That’s not Socialism; it’s called ROI, a fair return on investment. People rent their lives for a portion of each week of time, and what exactly do they get in return: and why should that return not be reflective of the success they have helped immensely to create? Money has no “owner” it is only valuable when it is used.
While key executives might be very influential in assisting a company to maximize their profits: the same has to be said for those who actually do the work and make the products that make the corporations rich. Employees are expected to be “good citizens” within their communities, but has anyone else noticed that corporations have no ethics at all. Corporations certainly feel free to dump the cities, counties and states that enabled them to rise to greatness, whenever they get cheaper labor outside the country, hell the government even rewards this behavior with corporate welfare—in addition to seeing to it that the corporations pay no taxes once they are safely offshore and making billions more than ever before. This too is “just business!”
What about the American workforce that those offshore moves kill outright—why is there not even a fine for doing that to people that in some cases have invested their entire lives working for one of these psychotic giants! When one of their ‘employees’ fails a drug test, or is found to be doing less than he or she is “capable of” then there are retributions and possibly termination. In fact there is usually a long list of things that any ‘employee’ can be fired for: yet there are no hard and fast rules for firing upper-echelon executives, for anything. When the Corporation commits a crime, against the population or the planet, then that crime is usually reduced to nothingness, or ended with a miniscule fine: And if there is a conflict with an employee the Corporation seldom has to pay for what they’ve done—because “Hey—it’s just business!” (3)
kirwanstudios@sbcglobal.net
1) Greenspan Calls Credit Crisis ‘a Financial Tsunami’
http://www.pbs.org/newshour/updates/business/july-dec08/greenspan_10-23.html
2) They Did it on Purpose: The Housing Bubble and its Crash were engineered
http://www.globalresearch.ca/index.php?context=viewArticle&code=COO20081023&articleId=10654
3) The Bailout
http://www.heyokamagazine.com/heyoka.17.why%20the%20bailoutwontwork.htm
By Sandra Hernandez and Bo Nielsen
year bond to the lowest since regular issuance of the securities began
in 1977, as widening financial turmoil wiped more than $10 trillion
off stock markets worldwide this month.
U.K. economy shrank more than forecast, a report showed today. Trading
in U.S. stock-index futures was limited after declines of more than 6
percent. U.S. government securities returned 1.6 percent in October,
the most since January, according to Merrill Lynch & Co.'s U.S.
Treasury Master index, as tumbling stocks spurred demand for the
safest assets.
says, `I don't care; I want out,''' said E. Craig Coats Jr., who co-
heads fixed income at Keefe, Bruyette & Woods Inc. in New York.
``Everybody seems to be saying `I want to be in cash or
Treasuries.'''
points, or 0.10 percentage point, to 3.95 percent at 9:44 a.m. in New
York, according to BGCantor Market Data, after dropping as low as
3.8676 percent. The price advanced 1 24/32, or $17.50 per $1,000 face
value, to 109 17/32.
have fallen 37 basis points this week, the most since 1995, on
speculation government and central bank efforts to revive lending
won't avert a global slowdown.
``Bonds are the instrument, par excellence, to profit from the
crisis,'' Societe Generale SA said in a report.
`Fires Are Spreading'
fell as much as 6.2 percent to its lowest level since 2003. Trading in
futures on the Standard & Poor's 500 Index and the Dow Jones
Industrial Average was limited after declines in contracts of more
than 6 percent triggered a so- called limit down restriction.
income strategist in Frankfurt at Commerzbank AG, Germany's second-
largest bank by assets, wrote in a note today. ``The flight to quality
should therefore continue to give massive support to bunds and U.S.
Treasuries as this week draws to a close.''
the first time in more than a week as the shorter maturities, which
are more sensitive to monetary policy, outperformed. The yield spread
widened 9 basis points to 2.16 percentage points. It's still narrower
than this year's high of 2.39 percentage points on Oct. 15.
Traders can profit from a widening yield spread by buying two-year
notes and selling 10-year notes.
Yen, Pound
touched 1.35 percent, the lowest in more than two weeks.
to make an emergency reduction in borrowing costs on Oct. 8, and they
will cut again when they meet on Oct. 29, futures contracts indicate.
Futures on the Chicago Board of Trade show a 100 percent chance policy
makers will lower their target for overnight bank lending, now 1.5
percent, by at least a half-percentage point, compared with 38 percent
odds a week ago.
global recession prompted investors to slash carry trades, in which
they fund purchases of higher-yielding assets with the Japanese
currency. The British pound had its biggest decline in at least 37
years after the Office for National Statistics in London said the
economy contracted 0.5 percent in the third quarter, exceeding the 0.2
percent forecast by analysts in a Bloomberg survey.
credit crisis imperiled developing economies. The Polish zloty,
Hungarian forint and South African rand headed for their biggest
weekly declines. Ukraine's credit ratings were lowered for the second
time since June by Standard & Poor's on concern about the country's
banks, a day after Russia's credit rating outlook was lowered to
``negative'' from ``stable.''
manager for fixed income, equities and currencies in Tokyo at
Mitsubishi UFJ Trust & Banking Corp., part of Japan's biggest bank.
``That's supportive for Treasuries.''
Yields on three-month Treasury bills, sought as a haven in times of
uncertainty, fell 21 basis points to a one-week low of 0.75 percent.
They were 3.38 percent at the start of the year.
borrow for three months, known as the TED spread, widened for a second
day, to 2.75 percentage points. The spread, which is the difference
between three-month bill yields and the three- month London interbank
offered rate, is more than triple this year's low of 76 basis points
in May.
banks charge for three-month dollar loans relative to the overnight
indexed swap rate, the so-called Libor-OIS spread, widened to 2.64
percentage points from 2.54 percentage points yesterday. The spread
has narrowed from 3.64 percentage points on Oct. 10.
Yields on Treasury Inflation-Protected Securities with maturities of
up to five years were higher than yields on conventional Treasuries of
similar maturity in another sign investors are liquidating positions
and betting on a deepening U.S. recession.
TIPS was minus 0.06 percentage points. TIPS typically yield less than
Treasuries because their principal payments rise at the rate of
inflation. A shrinking yield gap indicates investors expect inflation
to slow.
economic one,'' Ciaran O'Hagan, a fixed-income strategist in Paris at
Societe Generale, said in a report yesterday. ``That leaves spread
markets still going in only one direction -- south.''
at shernandez4@bloomberg.net; Bo Nielsen in Copenhagen at
bnielsen4@bloomberg.net.
AND BREAK DOWN OF RULE OF LAW
We, the citizens of Maharashtra protest against the planned and instigated violence against north Indians in Mumbai, Thane and Kalyan. Neither Mr. Raj Thackrey nor the MNS have actually done any good to the ordinary Maharashtrian Bahujans on whose behalf he is advocating. The major issues of the State and its toilling masses like that of the agrarian crisis, land and homelessness, displacement due to SEZ and other development based projects or mill workers in Mumbai have found any place in his agenda. The violent and dividing politicking will result in far reaching consequences to safety and securityof the citizens and the integrety of the nation
Repeated inflammatory public speeches and statements made by Raj Thackeray, is ample proof of his violent and unlawful demeanor and there is no justification for the Democratic Front led by Congress and NCP for being a silent spectator resulting in violation of rule of law and the rights guarenteed under the Indian Constitution.
The state has left the ordinary citizens vulnerable to the attack by a small section of unruly MNS workers.
We assert the diversity of Mumbai and believe that the rule of law has to prevail and Mr. Raj Thackery / MNS should not be allowed to continue with their unruly behaviour holding the entire city in randsom. The State is equally responsible for the breakdown of the constituitional mechanisms and fear that has been installed in the linguistic and regional minority in Mumbai. The violence would not have continued with out the silent support provided by the Chief Minister and the Home Minister.
We also denounce Thackeray's statement exhorting his party workers to take to violence and arson as peaceful modes of protest like fasting and Dharna are 'ineffective' and must be given up. We demand immediate action to restore the rule of law and derecognition of MNS as a political party and stringient legal action against Raj Thackrey, implement the recommendation of the SHRC to reinvestigate all the earlier cases against Raj Thackeray and initiate action as per law. We firmly state our disagreement with all those who have silent faith in the segregating vision of Raj Thackeray, but merely condemn his physically brutality.
We request the ordinary, peace loving, non communal and progressive forces in the city to come together and fight the hijacking of the ordinary citizens agenda using violence and vested interests by politicians like Raj Thackeray.
Sincerly yours,
Datta Iswaljkar - Girini Kamgar Sangharsh Samiti
Anand Teltumbede- Dalit Activist and Writer,
N.D. Patil- PWP,
Anand Patwardhan- Film maker,
Avinash Mahatekar- Activist Ambedkar Movement
Shyam Sonar and Sudhir dhawale- Republican Panther
Simpreet Singh- Ghar Banao Ghar Bachao Andolan ,
Madhuri Vairath- GBGB
Mukta Srivastava- NAPM,
Urmila Pawar- Dalit Writer and Activist ,
Feroz Mithiborwala- Awami Bharat
Prakash Reddy- CPI ,
Bhalchandra Kango-CPI,
Hasina Khan-Awaz-e-Niswan, Forum Against Opression of Women ,
Maju Varghese- YUVA ,
Deepika D'souza- ICHRL
Gerson da Cunha- Agni ,
Dolphy Disouza- Bombay Cathelic Sabha
Damjibhai Gada- NAPM
Smita Shah - Editor - Sadbhavna Sadhana
Shakil Ahmed - Nirbhay Bano Andolan
Mohan Chauhan - Sahar Vikas Manch
by George Reisman
Posted on 10/23/2008
"The mortgage crisis is laissez-faire gone wrong."
"Sarkozy [Nicolas Sarkozy, the President of France] said 'laissez-faire' economics, 'self-regulation' and the view that 'the all-powerful market' always knows best are finished."
"'America's laissez-faire ideology, as practiced during the subprime crisis, was as simplistic as it was dangerous,' chipped in Peer Steinbrück, the German finance minister."
"Paulson brings laissez-faire approach on financial crisis…."
"It's au revoir to the days of laissez faire."[1]
Government spending in the United States currently equals more than forty percent of national income, i.e., the sum of all wages and salaries and profits and interest earned in the country. This is without counting any of the massive off-budget spending such as that on account of the government enterprises Fannie Mae and Freddie Mac. Nor does it count any of the recent spending on assorted "bailouts." What this means is that substantially more than forty dollars of every one hundred dollars of output are appropriated by the government against the will of the individual citizens who produce that output. The money and the goods involved are turned over to the government only because the individual citizens wish to stay out of jail. Their freedom to dispose of their own incomes and output is thus violated on a colossal scale. In contrast, under laissez-faire capitalism, government spending would be on such a modest scale that a mere revenue tariff might be sufficient to support it. The corporate and individual income taxes, inheritance and capital gains taxes, and social security and Medicare taxes would not exist.
There are presently fifteen federal cabinet departments, nine of which exist for the very purpose of respectively interfering with housing, transportation, healthcare, education, energy, mining, agriculture, labor, and commerce, and virtually all of which nowadays routinely ride roughshod over one or more important aspects of the economic freedom of the individual. Under laissez-faire capitalism, eleven of the fifteen cabinet departments would cease to exist and only the departments of justice, defense, state, and treasury would remain. Within those departments, moreover, further reductions would be made, such as the abolition of the IRS in the Treasury Department and the Antitrust Division in the Department of Justice.
The economic interference of today's cabinet departments is reinforced and amplified by more than one hundred federal agencies and commissions, the most well known of which include, besides the IRS, the FRB and FDIC, the FBI and CIA, the EPA, FDA, SEC, CFTC, NLRB, FTC, FCC, FERC, FEMA, FAA, CAA, INS, OHSA, CPSC, NHTSA, EEOC, BATF, DEA, NIH, and NASA. Under laissez-faire capitalism, all such agencies and commissions would be done away with, with the exception of the FBI, which would be reduced to the legitimate functions of counterespionage and combating crimes against person or property that take place across state lines.
To complete this catalog of government interference and its trampling of any vestige of laissez faire, as of the end of 2007, the last full year for which data are available, the Federal Register contained fully seventy-three thousand pages of detailed government regulations. This is an increase of more than ten thousand pages since 1978, the very years during which our system, according to one of The New York Times articles quoted above, has been "tilted in favor of business deregulation and against new rules." Under laissez-faire capitalism, there would be no Federal Register. The activities of the remaining government departments and their subdivisions would be controlled exclusively by duly enacted legislation, not the rule-making of unelected government officials.
And, of course, to all of this must be added the further massive apparatus of laws, departments, agencies, and regulations at the state and local level. Under laissez-faire capitalism, these too for the most part would be completely abolished and what remained would reflect the same kind of radical reductions in the size and scope of government activity as those carried out on the federal level.
Government Intervention Actually Responsible for the Crisis
The Times' article goes on to describe how "Lenders," such as Countrywide Financial, which was among the largest and most prominent, "sprang up to serve those whose poor credit history made them ineligible for lower-interest 'prime' loans." It notes the fact that "Countrywide signed a government pledge to use 'proactive creative efforts' to extend homeownership to minorities and low-income Americans."[8] "Proactive creative efforts" is a good description of what lenders did in offering such bizarre types of mortgages as those requiring the payment of "interest only," and then allowing the avoidance even of the payment of interest by adding it to the amount of outstanding principal. (Such mortgages suited the needs of homebuyers whose reason for buying was to be able to sell as soon as home prices rose sufficiently further.)
The Community Reinvestment Act [CRA] … is a United States federal law designed to encourage commercial banks and savings associations to meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods … CRA regulations give community groups the right to comment or protest about banks' non-compliance with CRA. Such comments could help or hinder banks' planned expansions.
The meaning of these words is that the Community Reinvestment Act gives the power to "community groups," to determine in an important respect the financial success or failure of a bank. Only if they are satisfied that the bank is making sufficient loans to borrowers to whom it would otherwise choose not to lend, will it be permitted to succeed. The most prominent such community group is ACORN.
The Laissez-Faire Myth and the Marxism of the Media
"We now have a collective anger, disgust, over our whole financial system and it's obvious we're going to get a regulatory backlash…" [with] a spillover effect to other industries because voters have the perception that "big companies are animals and they need to be put in their cages."[10]
In this way the enemies of capitalism and economic freedom are able to proceed in their campaign of economic destruction and devastation. They use the accusation of "laissez faire" as a kind of ratchet for increasing the government's power. For example, in the early 1930s they accused President Hoover of following a policy of laissez faire, even as he intervened in the economic system to prevent the fall in wage rates that was essential to stop a reduced demand for labor from resulting in mass unemployment. On the basis of the mass unemployment that then resulted from Hoover's intervention, which they succeeded in portraying as "laissez faire," they deceived the country into supporting the further massive interventions of the New Deal.
Palash Biswas
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