Japanese shares tumbled Thursday, sending the Nikkei 225 Average down by nearly 9% in the afternoon as investors sold off equities, fearing the impact of a U.S. recession and a slowing global economy.

Nikkei down nearly 9% as recession fears kick in: News from HONG KONG - Japanese shares tumbled, sending Nikkei 225 Average down by nearly 9%.  The Nikkei 225 Average dropped as much as 10.3% in mid-morning Tokyo trading, before recovering, as shares across the board were slammed after Wall Street stocks dived overnight. The benchmark was recently down 8.9% at 8,699.69, while the broader Topix index shed 7% to 888.50.
In Hong Kong, the Hang Seng Index dropped 7.6% to 14,787.35, while the Hang Seng China Enterprises Index lost 9.7% to 7,127.98. On mainland China, the Shanghai Composite declined 4% to 1,915.73.
Australia’s S&P/ASX 200 index lost 6.3% to 4,027.70, with shares of resources giant Rio Tinto tumbled more than 14% in Sydney on concerns global demand for commodities was weakening.
“Certainly, the outlook is for a global recession, but you could argue that the markets’ pricing last week already reflected that,” said David Cohen, director of Asian economic forecasting at Action Economics in Singapore. “There is no reason why the world economy has to melt down. There are still some stabilizing influences, including the lowering of oil prices.”
Elsewhere, New Zealand’s NZX 50 index gave up 4.7% to 2,767.44, South Korea’s Kospi slumped 6.7% to 1,250.05, Singapore’s Straits Times index lost 6.4% to 1,928.56 and Taiwan’s Taiex shed 3.1% to 5,081.90.
Chart of JP:1804610
Cohen added it “wouldn’t be surprising” if governments in Asia decided to increase spending or introduce other stimulus measures such as tax cuts to support their slowing economies.
“I think the Asian economies are less vulnerable to financial instabilities now than they were 10 years ago,” said Cohen. With a few countries in the region running current account surpluses and accumulating international reserves, “Asia has a little more flexibility and they don’t have to fear that their financial position will crumble,” he added.
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Shares of Rio Tinto (RTP:
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4:02pm 10/15/2008
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RTP 154.27, -39.72, -20.5%) (AU:RIO: news, chart, profile) tumbled 14.2% in Sydney a day after the resources giant said the global financial crisis will force it to delay a planned sale of $10 billion of assets. The company added that China wasn’t immune to the global downturn and it may freeze capital expenditure as it reassesses commodity demand amid a looming global slowdown. See full story
Shares of regional exporters tumbled on worries about slowing global demand, with Honda Motor Co. (HMC:
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4:05pm 10/15/2008
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HMC 20.57, -3.28, -13.7%) (JP:7267: news, chart, profile) shedding 7.9% and Sony Corp. (SNE:
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4:02pm 10/15/2008
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SNE 23.43, -2.77, -10.6%) (JP:6758: news, chart, profile) losing 9.4% in Tokyo, while Hyundai Motor Co. (HYMLF:
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HYMLF 57.88, +2.74, +5.0%) lost 10% in Seoul.
Shares of Mazda Motor Corp. (JP:7261: news, chart, profile) (MZDAF:
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8:10pm 10/09/2008
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MZDAF 2.70, -0.25, -8.5%) fell 4.2%, on top of their 9.2% decline Wednesday, after the Nikkei business daily reported that U.S. automaker Ford Motor Co. (F:
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F 2.30, -0.14, -5.7%) has asked Denso Corp. (JP:6902: news, chart, profile) (DNZOF:
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DNZOF 20.21, +2.65, +15.1%) to purchase a part of its 33.4% stake in Mazda. The report added that Denso, which wants to expand business with Mazda, is likely to consider purchasing some of the stake.
Steelmakers and shipping stocks also dropped sharply on worries about global demand, with JFE Holdings Inc. (JP:5411: news, chart, profile) (JFEEF:
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JFEEF 24.61, +3.57, +17.0%) shrinking 12.9% in Tokyo and Mitsui O.S.K. Lines (JP:9104: news, chart, profile) (MSLOF:
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MSLOF 6.57, +0.85, +14.8%) losing 13.4% in Tokyo. In Seoul, Posco (PKX:
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PKX 60.79, -16.20, -21.0%) gave up 12%, while STX Pan Ocean Co. (SPNOF:
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SPNOF, , ) fell 11.2%. In Shanghai, shares of Baoshan Iron & Steel dropped 2.5%, while China Cosco Holdings Co. (CICOF:
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CICOF 0.69, 0.00, 0.0%) shed 8%.
In the financial sector, Mizuho Financial Group (JP:8411: news, chart, profile) (MFG:
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MFG 7.15, -0.21, -2.8%) lost 11.7% and Sumitomo Mitsui Financial Group (SMFJY:
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SMFJY 6.20, +0.49, +8.6%) (JP:8316: news, chart, profile) slumped 12.9% in Tokyo, while Macquarie Group (AU:MQG: news, chart, profile) (MQBKY:
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MQBKY 23.50, +1.65, +7.6%) lost 8% in Sydney. In Seoul, shares of Industrial Bank of Korea shed 14.9%, market heavyweight HSBC Holdings (HK:5: news, chart, profile) (HBC:
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HBC 69.99, -5.39, -7.1%) lost 3.9% in Hong Kong and DBS Group Holdings (DBSDY:
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DBSDY 37.15, -4.35, -10.5%) fell 5.5% in Singapore.
Shares of Citigroup Inc. (C:
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C 16.02, -2.60, -14.0%) (JP:8710: news, chart, profile) lost 10.7% in Tokyo after the Nikkei business daily reported the banking giant is considering delaying the merger of its retail brokerage firm Nikko Cordial Securities Inc. with its corporate securities business Nikko Citigroup.
Energy-related stocks tumbled after November crude-oil futures fell as much as $4.09 to $74.54 a barrel on the New York Mercantile Exchange overnight, ending at their weakest level in more than a year. The front-month contract recently dropped as much as $1.21 to $73.33 a barrel in electronic trading.
Shares of BHP Billiton (BHP:
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BHP 35.17, -7.28, -17.1%) (AU:BHP: news, chart, profile) gave up 13% and Woodside Petroleum lost (WOPEY:
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WOPEY 27.25, +1.95, +7.7%) (AU:WPL: news, chart, profile) 3.1% in Sydney. Commodity trader Mitsubishi Corp. (JP:8058: news, chart, profile) (MSBHY:
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MSBHY 34.95, -0.30, -0.8%) declined 14.7% in Tokyo, while shares of Cnooc (HK:883: news, chart, profile) (CEO:
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CEO 76.10, -14.15, -15.7%) sank 12.8% in Hong Kong.
The drop in Woodside shares came although the company announced an 84% jump in third-quarter revenue on increased production and higher oil prices.
In Asian currency trading, the U.S. dollar bought 99.79 yen, compared with 101.34 yen late Wednesday.
On Wall Street, the Dow Jones Industrial Average ($INDU:
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4:04pm 10/15/2008
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$INDU 8,577.91, -733.08, -7.9%) tumbled 7.9% to 8,577.91 and the S&P 500 index ($SPX:
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4:59pm 10/15/2008
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$SPX 907.84, -90.17, -9.0%) skidded 9% at 907.84, while the Nasdaq Composite ($COMPX:
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5:16pm 10/15/2008
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$COMPX 1,628.33, -150.68, -8.5%) shrank 8.5% to 1,628.33. End of Story

one thing that keeps rattling around in this old head is 2000 and the recession followed by DOW 14,000 and 1929

Totally different in so many ways but, why?

Because in 1929 they let things go too long before “stimulating” with war and money supply. We had both a rising money supply and war spending that kept the “crash of 2000-2001″ from playing out. We had a new Bear Market but, most didn’t think it was because of DOW 14,000. What they didn’t factor was that all that war spending and money supply was creating inflation of the prices of the stocks.

When adjusted for real value, it was just a rally that never reached the old high. While spread over years, it was a similar, but extended pattern of 1929.

That crash had a huge drop like we saw when the tech bubble burst and then a huge rally regaining over 50% of the loss. The 2000’s rally did even better but still not back to the old high.

Then in 1929, the rally failed and down and down and down the market went until it was down almost 90% from the peak.

We are pumping money again. Thus, instead of 90% down, I think we will not drop anywhere near that in price, but may in value eventually. Always keep that “Dogs of the Dow” chart in mind and what it looks like when you adjust for inflation.

It isn’t how far the DOW or S&P drop but how much buying power we lose.

quote:
On Monday, I said that the total cost of this bailout could scale up to $3 trillion — I just didn’t imagine it would happen by Wednesday.

We learned yesterday that the size of the bailout just tripled, from $750b to $3T. Here is the cost structure:Higher prices will hit at some point, but maybe not right away because most of that money is going into an almost bottomless hole. It is restoring “paper losses” that until they are restored isn’t really adding “real money” into the global economy.

But, because a lot of those mortgages (some say 95%) are still being paid, once a recovery starts, there will be alot of money to toss around due to how fractional banking works. I don’t know if it will be soon or not til next year or later but, that money will come back to haunt us if we don’t get cut off from our foreign lenders before then.

Are you saying we are in the late 1930s at this point?
No, early thirties if we are going to have a depression. It will last for many years if that is the case.

The problem is that we are not waiting as long as they did then and that will change the “price” but probably not the value of the markets. We will have high inflation in a year or so or, we will be cut off from foreign loans (another thing that is different) and go into hyper-inflation as the government has to print the money for all social spending instead of borrow it.

Social Security checks will double every month or so as Congress has emergency increase after increase that totally wipes out the trillions in the trust fund in a a year or less. Seniors getting $10,000 or $20,000 checks but not lasting a month.

We will still be in a depression but, it won’t be anything like the 30’s if we don’t keep this at a recession level. With debt rising hundreds of billions a month, that can’t last for too long with out our being cut off.

This rapid rise in debt has to cool soon or we will be in deeper trouble faster than most realize. We have increased debt $300 billion in 1/2 a month. it took a year to increase it a trillion this last year. I know it won’t keep up at this rate but think about it. $600 billion a month at this rate or $7.2 trillion more debt in a year.

So, we better hope they run out of “need” for fed funds pretty soon. Higher. Mortgage interest rates should ALWAYS BE AROUND 7% on a fixed 30 year loan, and savers should ALWAYS BE PAID AROUND 5.25% to 5.50% on standard savings accounts. It worked this way almost perfectly for around 5 decades from the 1930s into the 1980s. Variable interest rates are a bad thing in general. Regulation Q of the Glass Steagall Act fixed interest rates that banks and thrifts had to pay savers and this created a very stable and huge base for deposits with predictable returns with no risk.

The next 15 days should be interesting:

The most famous crash happened on October 29, 1929.

The crash on October 19, 1987, a date that is also known as Black Monday, was the climactic culmination of a market decline that had begun five days before on October 14th.

Tomorrow is Wednesday October 16th, 2008

Roughly 21 years since the last crash if we hold our financial disaster tradition.

Do the crashes come more frequently with rising inflation?
The Drudge poll is showing McCain as winning with 74%, Obama with 24%, and neither at 1%. The AOL poll is showing both dead even with 47% and neither winning with 6%. In my opinion, both are so disgusting and awful that it’s not even worth the bother to try to rate them. JUST SAY NO!
“U.S. Stocks Drop Most Since Crash of 1987 on Recession Concerns” By Lynn Thomasson

“Oct. 15 (Bloomberg) — U.S. stocks plunged the most since the crash of 1987, hammered by the biggest drop in retail sales in three years and growing doubt that plans to bail out banks will keep the economic slump from deepening.

The Standard & Poor’s 500 Index sank 90.17 points, or 9 percent, to 907.84, with nine companies declining more than 20 percent. The Dow Jones Industrial Average retreated 733.08, or 7.9 percent, to 8,577.91, its second-biggest point drop ever. The Nasdaq Composite Index lost 150.68, or 8.5 percent, to 1,628.33. About 37 stocks fell for each that rose on the New York Stock Exchange.

“It’s absolutely trading on fear right now and uncertainty, because nobody knows yet how bad the economy is going to get,” said John Wilson, the co-director of equity strategy at Memphis, Tennessee-based Morgan Keegan, which manages $120 billion.

All 10 S&P 500 industries fell more than 6 percent today. About $1.1 trillion in value was erased from all U.S. equities. The declines came after the drop in retail sales was almost twice economists’ estimates, sending Macy’s Inc. and Dillard’s Inc. down more than 15 percent. The Federal Reserve’s index of New York manufacturing slumped to minus-24.6, a record low.”

Japanese shares tumbled, sending Nikkei 225 Average down by nearly 9%. News from HONG KONG - Japanese shares tumbled Thursday, sending the Nikkei 225 Average down by nearly 9% in the afternoon as investors sold off equities, fearing the impact of a U.S. recession and a slowing global economy.

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Another huge Dow loss. Huge Dow loss again Recession fears send indicator tumbling 733, 2nd biggest point loss ever

Bad News Again: Blue-chip indicator drubbed 733 points - 2nd biggest point loss ever - as recession fears resurface.

NEW YORK (CNNMoney.com) — Recession talk scared Wall Street Wednesday, sending the Dow Jones industrial average to its second biggest one-day point loss ever.

A weak retail sales report and dour forecasts from the Federal Reserve, coupled with sober comments from Fed Chairman Ben Bernanke, sent stocks tumbling.

The Dow Jones industrial average (INDU) fell 733 points, its second biggest one-day point loss ever, second only to Sept. 29 of this year, when the House of Representatives initially rejected the government’s $700 billion bank bailout plan.

Wednesday’s decline was equal to around 7.9%, the Dow’s biggest one-day percentage loss since Oct. 26, 1987.

The Standard & Poor’s 500 (SPX) index lost 90 points, its second-worst one-day point loss ever, also second only to Sept. 29. The loss was equal to 9%, its second biggest slide on a percentage basis since Oct. 19, 1987, a.k.a. Black Monday.

The Nasdaq composite (COMP) lost 8.5% and closed at a new low for 2008, its worst level since June 30, 2003. The decline of 8.5% was its biggest one-day percentage loss since Aug. 31, 1998. On a point basis, it didn’t rate among the 20 worst days.

The decline Wednesday equaled a loss of $1.1 trillion in market value, as measured by the Dow Jones Wilshire 5000, the broadest measure of the stock market. It was the second-biggest one-day loss ever, following Sept. 29.

“It’s stunning,” said Donald Selkin, chief market strategist at National Securities. He said Wednesday’s selloff was an accumulation of all the negatives that are overlapping.

“The poor economic reality is being reflected in the market,” he said.

The day’s news included retail sales at a 3-year low, a reading on manufacturing in the New York area at an all-time low, the Fed’s weak forecast and comments from Bernanke.

“The economy is the issue right now,” said Timothy Ghriskey, chief investment officer at Solaris Asset Management. “It was clear in Bernanke’s speech today, in the retail sales report and in the stock market reaction.”

Ghriskey said the risk level is high now “because we don’t know the duration or the depth of an economic downturn.”

Additionally, Wall Street is impatiently waiting for the many initiatives that have been announced to start loosening up the still-sluggish credit market, a process that won’t happen overnight.

“The Fed and Treasury have thrown the entire arsenal at the problem and those things will work, but the market wants to see it work right away,” said Jim Dunigan, chief investment officer at PNC Wealth Management.

The credit market showed some signs of easing, as a key overnight bank lending rate fell. But the improvement was slowgoing and failed to reassure investors. Global markets were mostly lower.

Investors are also now dealing with the “around-the-clock-effect,” Selkin said. He said that barring some big news in the next few hours, Wall Street’s slide will send Asian markets lower, which will drag on European markets, and in turn hitting Wall Street again Thursday.

Treasury prices gained Wednesday, lowering the corresponding yields. The dollar gained versus the yen and fell against the euro. Oil and gas prices slipped, while gold prices rose.

Calling a recession: San Francisco Federal Reserve Bank President Janet Yellen said the U.S. economy “appears to be in a recession,” something many economists, but few Fed officials, have said. Yellen isn’t a voting member of the Fed’s policy-setting committee this year but is nonetheless seen as influential. (Full story)

Federal Reserve Chairman Ben Bernanke, speaking in the afternoon, said that while policymakers now have the tools they need to fix the financial and credit markets, the economic rebound will take time. (Full story)

The Fed’s ‘beige book’ reading on economic activity, released in the afternoon, showed weakness in all 12 districts. The outlook was also pessimistic, with businesses unable to access much-needed credit.

The lack of available credit has punished the already weak economy, making it difficult for businesses to function on a daily basis and for consumers to get loans.

“The market seems to be waking up to the fact that we’re in a recession,” Dunigan said.

He said he’s not clear as to why this is a surprise to the market, as the recession has been well forecasted by economists, if not the Federal Reserve and National Bureau of Economic Research, which officially “calls” a recession. However, he said that it may be that since the government and world banks have addressed the worst fears about the credit crisis, investors are now returning the focus to the broad economy.

Better-than-expected quarterly results from Intel, Coca-Cola, Wells Fargo, JPMorgan Chase and a host of regional banks had little impact amid worries about a recession.

Wall Street’s lack of confidence: Although investors have welcomed many of the steps the government and world banks have taken to get money flowing again, investors remain skittish. That’s partly because a lot of the programs won’t kick in until several months from now.

“After all the damage that’s been done, it’s going to take a while for people to feel confident again,” said Joseph Saluzzi, co-head of equity trading at Themis Trading..

Stocks rallied sharply Monday, with the Dow up 936 points or 11.1%, its best one-day point gain ever and best one-day percentage gain since 1933. The advance was fueled by bets that the United States would follow Europe in pouring money directly into banks in exchange for shares, as part of the $750 billion bailout plan.

But investors took a “sell the news” approach Tuesday after the government detailed plans to invest at least $250 billion in the nation’s banks. The Treasury said it will start by investing $125 billion in nine leading banks. (Will it work?)

On Wednesday, leaders of the Group of Eight (G8) economies said that they would hold a global financial crisis summit before the end of the year.

Last week was Wall Street’s worst ever, as the Dow capped a stunning eight-session selloff that cut 2,400 points and 22% off the blue-chip indicator. That erased $2.4 trillion in market value from the Dow Jones Wilshire 5000, the broadest measure of the stock market.

Many market pros are cautiously optimistic that Friday’s lows represent the lows of the bear market, or a bottom.

Economy: Consumer spending has remained strained, despite the drop in gas prices over the last 4 weeks.

Retail sales fell 1.2% in September, the biggest drop in three years, after falling a revised 0.4% in August. Economists surveyed by Briefing.com thought sales would fall 0.7%. Sales excluding volatile auto sales fell 0.6%, versus forecasts for a drop of 0.2%. Sales excluding autos fell a revised 0.9% in August. (Full story)

The September Producer Price Index (PPI), a measure of inflation at the wholesale level, fell 0.4%, in line with forecasts and reflecting the decline in energy prices. PPI fell 0.9% in August. So-called core PPI, which strips out volatile food and energy prices, rose 0.4% in September, versus forecasts for a rise of 0.2%. Core PPI rose 0.2% in August.

The NY Empire State index, a regional manufacturing report, slumped to negative 24.6 from negative 7.4 in the previous month. Economists thought it would fall to negative 10. Any negative reading shows weakness, while a positive reading shows growth.

Late Tuesday, the government said the U.S. budget deficit swelled to $454.8 billion, the highest level in history.

Earnings: A number of companies reported better-than-expected quarterly results late Tuesday and early Wednesday, including a slew of banks.

JPMorgan Chase (JPM, Fortune 500) surprised investors Wednesday morning by reporting a profit versus expectations for a loss. But the company’s net income plunged 84% due to charges connected to its purchase of Washington Mutual. It also took $3.6 billion in writedowns related to bad mortgage bets. Shares fell 2%. (Full story)

Wells Fargo (WFC, Fortune 500) posted weaker profit on writedowns and credit losses, but results were better than expected. The bank said it expects to complete its $11.7 billion purchase of Wachovia by the end of the fourth quarter. Shares rose 2%. (Full story)

JPMorgan and Wells Fargo have fared better than many of their peers in the credit crisis. Still, the two banks are among the nine that will participate in the Treasury plan.

Late Tuesday, Intel (INTC, Fortune 500) reported higher quarterly earnings that edged estimates on higher revenue that was short of forecasts. The chipmaker also reported a bigger-than-expected rise in gross margins, a key measure of profitability. Shares fell 1.5% Wednesday.

And Coca-Cola (KO, Fortune 500) reported higher quarterly earnings that beat estimates on higher sales that missed estimates. Coke’s Wednesday morning report followed Pepsi’s weaker results Tuesday. Coke shares gained 3% Wednesday.

JPMorgan, Intel and Coke are all Dow stocks. But Coke was the only gainer among the 30 Dow components.

The Dow’s biggest losers were financial components American Express (AXP, Fortune 500) and Citigroup (C, Fortune 500), and energy components Chevron (CVX, Fortune 500) and Exxon Mobil (XOM, Fortune 500).

Third-quarter earnings are currently on track to have fallen 9.8% from a year ago, according to the latest estimates from Thomson Reuters.

After the close Wednesday, eBay (EBAY, Fortune 500) posted a higher-than-expected quarterly profit, but warned fourth-quarter results won’t meet forecasts. The stock slid 5.5% in extended-hours trading.

Credit market: Some bank lending indicators improved, in a sign that the recent global initiatives to get money flowing again may be starting to work. (Full story)

Libor, the overnight bank-to-bank lending rate, fell to 2.14% from 2.18% Tuesday, according to Bloomberg.com.

The three-month Libor, what banks charge each other to borrow for three months, fell to 4.55% from 4.64% Tuesday.

The Libor-OIS spread, a measure of cash scarcity, decreased to 3.35% from 3.39% Tuesday and a record high of 3.67% Friday.

The TED spread, which is the difference between what banks pay to borrow from each other for three months and what the Treasury pays, widened to 4.37% from 4.30% late Tuesday. The spread hit a record 4.65% Friday. The wider the spread, the more reluctant banks are to lend to each other.

Treasury prices rallied, lowering the yield on the 10-year note to 3.97% from 4.07% late Tuesday. Treasury prices and yields move in opposite directions.

But the yield on the 3-month Treasury bill, seen by many as the safest place to put money in the short term, fell to 0.20% from 0.25% late Tuesday, showing investors were still willing to take a meager return on their money rather than risk it on stocks. Last month, the yield on the 3-month bill skidded to a 68-year low around 0%.

Other markets: U.S. light crude oil for November delivery fell $4.09 to settle at $74.54 a barrel on the New York Mercantile Exchange, a more than 13-month low. Oil prices have tumbled on bets of slowing demand since the price of crude hit an all-time high of $147.27 a barrel on July 11.

Gasoline prices fell another 3.8 cents overnight, to a national average of $3.125 a gallon, according to a survey of credit card activity by motorist group AAA. It was the 28th consecutive day that prices have decreased - in the past month alone, they’re down more than 73 cents a gallon.

COMEX gold for December delivery fell 50 cents to settle at $839 an ounce.

In currency trading, the dollar rose against the euro and fell versus the yen.

Another huge Dow loss. Huge Dow loss again Recession fears send indicator tumbling 733, 2nd biggest point loss ever. Bad News Again: Blue-chip indicator drubbed 733 points - 2nd biggest point loss ever - as recession fears resurface.

Related posts

• Morgan Stanley may benefit from latest Treasury plans on buying equity in banks (0)
• Japanese shares tumbled, sending Nikkei 225 Average down by nearly 9% (0)
• US stocks need financial relief from G7, Dow’s sees worst weekly drop (2)
• World economic summit to Open Next Month, Leaders to discuss how to Fix Financial Crisis (0)
• Stock prices suffers steep losses as dire recession forecasts shake markets (0)

Morgan Stanley may benefit from latest Treasury plans on buying equity in banks. U.S. mulls buying equity in banks as Morgan Stanley awaits MUFJ injection. News from SAN FRANCISCO — Morgan Stanley may benefit from the U.S. Treasury’s latest plan to buy equity stakes in financial institutions as the investment bank awaits a crucial $9 billion investment from Japan’s Mitsubishi UFJ.

Late Friday, Treasury Secretary Henry Paulson said the government is developing a “standardized” program to purchase equity in “a broad array of financial institutions.”

“Such a program would be designed to encourage the raising of new private capital to complement public capital,” he explained in a statement. See related story.
Morgan Stanley (MS:
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MS 9.68, -2.77, -22.2%) was hit hard this week by concerns that the firm’s deal with Mitsubishi UFJ may not go through, or might have to be re-negotiated.
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Shares in the investment bank slumped 60% to close below $10 this week. Less than a month ago, MUFJ (MTU:
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MTU 6.65, -0.37, -5.3%) , one of Japan’s largest banks, agreed to buy 21% of Morgan Stanley, partly by buying stock in the firm at more than $25 each. The $9 billion deal is now worth almost as much as the market value of all of Morgan Stanley.
Morgan Stanley’s predicament could be eased if the Treasury agreed to complement MUFJ’s $9 billion investment by purchasing its own stake in the investment bank.
A spokeswoman for the Treasury declined to comment on specific companies on Saturday, while a Morgan Stanley spokesman didn’t immediately respond to an email seeking comment.
Vicious spiral
The collapse of rival investment bank Lehman Brothers (LEHMQ:
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LEHMQ 0.10, 0.00, -2.0%) , the largest bankruptcy in U.S. history, has triggered a much broader financial crisis in recent weeks that’s begun to limit crucial short-term funding for a wide variety of companies.
Soon after Lehman’s failure, Morgan Stanley gained approval to become a bank holding company, giving it more access to direct loans from the Federal Reserve and allowing it to collect customer deposits, a more stable source of funding.

Morgan also had a $179 billion pool of cash, government bonds and other easily sellable securities at the end of August to help it survive if outside sources of money dry up.

The Mitsubishi UFJ investment will also help bolster capital and reduce leverage. That’s also being helped by Morgan’s efforts to sell assets.

Despite all these positives, Morgan Stanley’s access to funding in private markets has dwindled, sparking worries about its future viability. Those concerns fed upon themselves last week in a vicious spiral that the firm struggled to counteract. See full story.
“The Company’s cost and availability of funding have been and may continue to be adversely affected by illiquid credit markets and wider credit spreads,” Morgan Stanley warned in a quarterly regulatory filing on Thursday. “Many lenders and institutional investors have reduced and, in some cases, ceased to provide funding to borrowers.”

Morgan said its financing needs are satisfied for 2008. But if it can’t borrow money on acceptable terms after that, the firm said it may sell equity while pursuing other ways to raise money such as collecting more deposits, according to the filing.

In September, Morgan said it used some of its $179 billion pool to support its liquidity. The firm shrank some businesses that need lots of funding, sold some assets selectively and tapped government lending programs by pledging collateral. The pool is now smaller, but still a lot larger than it was in 2007 on average, Morgan explained.
Moody’s warning
Moody’s Investors Service warned late Thursday that it could downgrade Morgan Stanley’s ratings because an extended drop in global capital markets activity will likely cut into the firm’s revenue and profit next year and possibly beyond.

The rating agency also said that customers and investors have become concerned about wholesale investment banks like Morgan Stanley. That, in turn, has put more pressure on the firm, Moody’s noted.
“Investor, counterparty and customer confidence is critical to the funding and profit generation of the firm, especially in a hostile market environment,” the rating agency said in a statement. End of Story

The following are just comments. Please leave your views afterwards:

the brokerages are starting to put astroturfers on these boards to talk about how we should be nicer and kinder to them, instead of mad.

that is an indication that we are doing our jobs well, boys and girls of the independent press! power to the people!

If that’s aimed at me Raresilk, then no I’m not but that should be obvious because it’s been my consistent line that all the banks have done this and all the brokers too rather than to excuse them. My only points are for a forum that is probably being used in the largest part for stock analysis should see the implications on all stocks in turn. This most-guilty-in-turn approach is a bad investment strategy unless you are thinking about one or two moves beyond who is in the current frame. Citi and UBS were in the absolute hole about three months ago. The only reason they are out at the moment - sort of - is because of other distractors. Then there’s tactical mistakes in stock buying when you can see the MUFG (for MS) and / or US Govt deals lining up (for a *whole* lot of banks). I don’t know what any possible dilution effects could be so that makes it tricky but a sale at a deep loss just seems like a dumb option at this point is what I’m saying.

Sad thing is this is not a Financial Crisis that should have reached this point.

May be a sign of the times with our country.

Fighting a war for five years in a small country where it should have been won in 1 to 2 years.

Letting derivative financial assets backed up by the best security in the whole world - US REAL PROPERT with IMPROVEMENTS ON IT - spread to the whole financial system and threaten a WORLD WIDE GLOBAL DEPRESSION.

Sounds like our ruling class has lost what it takes to think outside of the box and apply common sense.

More like the fall of western Roman Empire than the 1929’s and 1930’s.

I had the good luck during this long life to make money on wall street and also to spend years studying not only in the US, but also in England at the leading universities. In England many prominent academics study Marxist theories, which seem taboo in this country.

Marxist theories explain the current situation quite well, but the diagnosis is not attractive. It is the story of excess capital investment and the inevitable destruction thereof. Just ponder the fact that all capitalist theories assume that economic growth is a good—does this make sense, and is it even a practical real world assumption?How about population? We have added (and are continuing to add) 100 million people in the last 30 years. That is something I think, at a minimum, is flawed economic growth policy — to say the least.

There has been some entertainment value in watching Paulson rearrange the deck chairs on his yacht, but in the long-run historians will laugh at Bernanke and Paulson with their “TARP”

Purchasing new equity in financial firms with a “troubled asset” fund (originally “toxic assets” we thought) is advertisement itself for the stupidity and futility of the “plan”.

In the financial “Axis of evil”, along with Politicians & Wall streeters, Rating agencies deserve an equal position. It is worth pointing out that somehow they have managed to remain under the radar screen (effective lobbying???). They seem to be doing a heck of job now and are very quick in downgrading everyone but it was their support that allowed the financial fraud to prosper.

I would wish that along with the Wall streeters, and politicians, they are also brought to justice. Let’s all downgrade the rating agencies to “F” grade. You can make your own assumptions on what “F” means.

It seems to me that these so called “rating” agencies are now trying to assert their “independent thinking”, covering up their miserable failures which got us to our current situation.

Here’s a simple suggestion to stop the death spiral: tell these rating agencies to cease-and-desist all comments and ratings on financial companies for lets say, 90 days?

All these rating agencies are doing is adding fuel to the fire.
As an American I feel ashamed and guilty with the thought with my limited perspective that this crisis originated here and because of my country the whole world is getting affected like a virus spreading like crazy.

I thank people around the world for their supported willing or unwilling and I hope we Americans will save more and reduce our debt in due course of time.

I also realise no one in the world has the guts to point a finger to America’s role in this global crisis for political or diplomatic reasons and I dont blame you.
I apologise.
What’s clear from the behavior of European financial markets over the past two weeks is that the dramatic stories of financial meltdown and panic are deliberately being used by certain influential factions in and outside the EU to shape the future face of global banking in the wake of the US sub-prime and Asset-Backed Security (ABS) debacle. The most interesting development in recent days has been the unified and strong position of the German Chancellor, Finance Minister, Bundesbank and coalition Government, all opposing an American-style EU Superfund bank bailout. Meanwhile Treasury Secretary Henry Paulson pursues his Crony Capitalism to the detriment of the nation and benefit of his cronies in the financial world. It’s an explosive cocktail that need not have been.
One of the main problems with our economy is the use of leveraged products. Simply making money with basic buy-sell trades was not enough for Wall Street. Highly leveraged instruments, where your gambling profits and losses can be increased dramatically, create money out of thin air and without selling or buying any product. This is a crazy system.

With all the turmoil in the market today and the collapse of Lehman Bros and
Acquisition of Merrill Lynch by Bank of America this might be some good
advice. For all of you with any money left, be aware of the next expected
mergers so that you can get in on the ground floor and make some BIG bucks.

Watch for these consolidations in later this year:

1.) Hale Business Systems, Mary Kay Cosmetics, Fuller Brush, and W R.Grace
Co. Will merge and become:
Hale, Mary, Fuller, Grace.

2.) PolyGram Records, Warner Bros., and Zesta Crackers join forces and
become:
Poly, Warner Cracker.

3.) 3M will merge with Goodyear and become:
MMMGood.

4. Zippo Manufacturing, Audi Motors, Dofasco, and Dakota Mining will merge
and become:
ZipAudiDoDa .

5. FedEx is expected to( join its competitor, UPS, and become:
FedUP.

6. Fairchild Electronics and Honeywell Computers will become:
Fairwell Honeychild.

7. Grey Poupon and Docker Pants are expected to become:
PouponPants.

8. Knotts Berry Farm and the National Organization of Women will become:
Knott NOW!
And finally…
9. Victoria ’s Secret and Smith &Wesson will merge under the new name:
TittyTittyBangBang

U.S. stocks seek financial relief from G7, Dow’s sees worst weekly drop on record; Dow Jones Industrial Average Urgent.

Morgan Stanley may benefit from latest Treasury plans on buying equity in banks. U.S. mulls buying equity in banks as Morgan Stanley awaits MUFJ injection. News from SAN FRANCISCO — Morgan Stanley may benefit from the U.S. Treasury’s latest plan to buy equity stakes in financial institutions as the investment bank awaits a crucial $9 billion investment from Japan’s Mitsubishi UFJ. Editing by Alice Lee

Related posts

• Japanese shares tumbled, sending Nikkei 225 Average down by nearly 9% (0)
• Financial recession fears resurface: Huge Dow loss again, indicator drubbed 733 points (0)
• US stocks need financial relief from G7, Dow’s sees worst weekly drop (2)
• World economic summit to Open Next Month, Leaders to discuss how to Fix Financial Crisis (0)
• Stock prices suffers steep losses as dire recession forecasts shake markets (0)

U.S. stocks seek financial relief from G7, Dow’s sees worst weekly drop on record. News from NEW YORK — U.S. stocks will enter next week with investors either comforted or disappointed by the meeting of the Group of Seven finance ministers and central bankers, who have gathered in Washington D.C. to address the global financial meltdown and its implications for the world’s economies.
“I don’t know what the G7 can do exactly,” said Robert Pavlik, investment strategist at Oaktree Asset Management. “But if they can come out with a positive statement, after all this is a gathering of some of the most qualified people out there, then that will help market psychology.”
Several hours after the close of trading Friday, G7 ministers and central bank governors pledged to work together to make sure that large important financial institutions do not fail. In a brief “plan of action” released after their meeting, the G7 said that the current market turmoil calls for exceptional action.
Video: A Bad Week For Markets
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MarketWatch Editor in Chief Dave Callaway takes a look back at an awful week for U.S. equities, and a look ahead at what may lie in store for investors. (Oct. 10)
At the top of the list were unfreezing credit and money markets, ensuring banks can raise capital from the private sector, ensuring that deposit insurance regimes were robust, and repairing secondary mortgage markets where appropriate. See full story.
Also after the G7 statement, Treasury Secretary Henry Paulson gave some new details of the emerging plans by the federal government to inject capital directly into a “broad array” of financial firms.
That still may fall short of the wishes of some market veterans such as Ed Yardeni, president of Yardeni Research, whose dream scenario included central banks setting up a facility to intermediate the nearly frozen inter-bank funding market.
Chart of $INDU
But ahead of the G7 statement, Yardeni also expressed hope that the market’s meltdown was nearly over.
“Of course, no one can tell how much longer or how much worse the panic selloff will be,” Yardeni wrote in a note. “The best case scenario is that the capitulation and revulsion phase of this extraordinary global bear market [climaxed Friday].”
Market meltdown
With bank-to-bank lending and credit markets virtually frozen, Wall Street joined a global market rout that lasted for eight straight sessions. Over the past week alone, the Dow Jones Industrial Average ($INDU:
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$INDU 8,451.19, -128.00, -1.5%) lost nearly 1,900 points, or 18.2%, its worst weekly drop on record.
With Asian markets tumbling Thursday night, the Dow fell nearly 700 points upon Friday’s open to trade below the 8,000 market for the first time in more than five years.
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Banks have a golden opportunity with earnings to get everything off their balance sheets, says Russ Koesterich of Barclays Global Investors. He says write-downs could have a long way to go. Stacey Delo reports. (Oct. 10)
But in extraordinarily volatile conditions that saw the blue-chip average swing back and forth by more than 500 points, the Dow settled down only 128 points at 8,451. The S&P 500 index ($SPX:
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$SPX 899.22, -10.70, -1.2%) finished down 10 points at 899, while the technology-heavy Nasdaq Composite (COMP:
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COMP 1,649.51, +4.39, +0.3%) managed to eke out some gains, ending up 4 points at 1,649. See Market Snapshot.
The weekly tallies still tell the tale. The Nasdaq fell 15.2%, its fourth worst weekly loss on record, while the broad S&P 500 index also lost 18.2%, its worst weekly drop since 1933.
For the year so far, the S&P 500 has fallen 38.8%, its worst weekly decline since 1937.
Several analysts were encouraged by Friday’s rebounding action and said that the market may have reached capitulation, when fear and selling reach an apex and a low is made which allows the market to rebound.
“I’m more convinced now than ever that this market has made a bottom. The capitulation came when we breached 8,000,” said Peter Cardillo, chief market economist at Avalon Partners. “It doesn’t mean we can’t go back and revisit that level.”
Oil slides
In an ominous sign that investors expect a global recession, crude oil prices plunged 17% on the week, to finish at a more than one-year low below $78 a barrel. While the action could bring relief to consumers and businesses, the cause of the drop for now seemed more ominous than its implications. See full story.
Not every market analysts was convinced that Friday’s action would signal a rebound. “There’s a little bit of buying going on,” said Paul Nolte, director of investments at Hinsdale Associates. “But is it over? We won’t know for a couple of months,” he said.
“The market is cheap if you look over 5 years, the problem who knows what will happen next week. There’s nothing to say this market is not going to get much cheaper.”
Many analysts say that among their biggest concern remains frozen credit and interbank lending, which have prevented everything from small firms to large institutions from conducting their business.
While the cost of borrowing dollars overnight fell Friday, a key three-month rate continued to rise amid chronic tightness in global money markets. The London interbank offered rate, or Libor, for overnight dollar loans tumbled to 2.46875% from 5.09375% Thursday. But three-month dollar Libor rose to 4.81875% from 4.75% on Thursday.
“It’s about the banks becoming more confident and bringing Libor down,” said Oaktree’s Pavlik.
Earnings
As U.S. investors still try to gauge how deep an economic recession at home and abroad might be, they will look out for any outlooks from key companies reporting quarterly results next week.
On tap will be Intel (INTC:
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INTC 15.19, -0.41, -2.6%) , Johnson and Johnson (JNJ:
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PEP 57.80, -1.72, -2.9%) Tuesday; JP Morgan Chase (JPM:
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WFC 28.31, +1.06, +3.9%) , Coca Cola (KO:
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KO 41.50, -1.80, -4.2%) and eBay (EBAY:
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EBAY 16.73, +0.77, +4.8%) Wednesday; Merrill Lynch (MER:
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MER 15.75, +2.43, +18.2%) , IBM (IBM:
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IBM 87.75, -1.25, -1.4%) , Google (GOOG:
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SLB 60.50, -0.05, -0.1%) on Friday. End of Story

The following are just comments. Please leave your views afterwards:

when it’s time to destroy, he goes it alone. When it’s time to clean up and repair, he’s all about the community.

If you are talking about the President, I will remind you that Iraq dified 27 or so UN sanctions. They were shooting at our air force jets in violation of the treaty of the first Gulf war. All good reasons to have the UN do the job, but they did not, nor were they willing.
These clowns are way behind the eighth ball. Timing is everything and the damage has already been done.

One more thing. In the name of national interest, do you think these clowns will work together this time? I say, fire them all.
Why isn’t ‘the rescue that works’ just letting the world markets correct so we can then “invest” with confidence? If that is even possible anymore?

The governments of the world by propping up assets with little or no value, are ripping off taxpayers and creating even more global debt, and will make that final crash that much harder and longer.

This is exactly what they did that prolonged the Great Depression.
Get out of the way politicians - let the markets find a bottom fast.
The sad part is that the politicians are talking about (in fact acting as well) punishing corporate executives but themselves.

I say, put the guilty politicians and the corporate executives on trial SIMULTANEOUSLY. How about starting with Barney Frank?
We thought Last Week was a Roller Coaster….we haven’t even begun to climb the first Hill yet…

The fact that they really dont know what to do, and cant even present themselves well enough to “fake it till they make it” will be plenty enough for the Mice and Elephants to scatter….stepping on / bumping into / trampling each other next week when the market re-opens.

7K here we come….Be ready….get your plan of action together this weekend…and hold on tight!

The talking heads on CNBC talk about LIBOR alot like a siver bullit. If wordwide everything is slowing down and the consumer doesn’t need debt,and upside down in home loans—will lowering the LIBOR rate and banks lending to one another just help the economy $$ flow–but not the one fix that stock market is looking for?
“We won’t know if the G7 statement was enough until next week, when the finance ministers have conferred with their heads of state and legislatures to draw up their own specifics. If they act quickly, the markets will probably calm down. But if they dawdle, the crisis will only intensify.
–Rex Nutting, Washington bureau chief”

The above is a quote from a related Marketwatch article. The thrust of that article errs by forgeting that it was the genius Alexander Hamilton, the first U. S. Treasury Secretary under the genius President Washington who invented the Federalist Banks, that now has the last laugh. The private banking system of today resulted from President Jackson’s deliberate destruction of the Federalist Banks; since that time, one money panic calamity after another has ensued, including the Great Depression; the current notion of nationalizing the private banks being undertaken by England and considered by America moves back toward the Hamiltonian concept, not the Marxist concept as stated in the above article!!

Moreover, the only action that will save the world from a Recession at this G-20 meeting is if the U. S. and Japan agree to immediately reduce their Central Banks interest rate to 0.0%, so that all other Central Banks in the world can reduce their interest rates by at least 1% about two weeks later; this action would generate huge numbers of desperately needed jobs all over the world so that people can afford to buy the goods they produce. Otherwise, the dialectic of the genius Karl Marx will rear its head again just as it did when the Great Depression was created by the U. S. FRB repeatedly raising U. S. interest rates in order to protect the U. S. Dollar.

Why hasn’t Paulson, Bernanke, and Bush advocated the above solution today? They are afraid that the U. S. Dollar will fall back to 71.25 “floor”!! The recent timid drop in the Fed Funds Rate of 0.5% by the FRB was obviously too little too late!! They are gambling that their approach of “Rome burned while Nero fiddled.” will work this time. What a joke!! The Gold market will not wait on His Majesty!!
If rates go to zero…Karl Marx becomes an “investment banker” with real estate holdings, we re-invent wall strasse with Krystallnacht and turn time square into a towering inferno with a friendly group of unemployed college degree street people in a soup kitchen feeding all our 3rd world immigration BROS… all carrying GUNS!!!

Sounds like a plan!
I’m agree with you guys that 7,000pts is critical support for the DOW as it’s Primary trend support level. Though, from my personal feeling, I think it won’t hold cuz the world has yet fully price in the recession. If you look at Baltic Dry Index, this thing has fallen from 15,000pts to primary trend support at 3,000pts. Sadly, it already breached that level and fell sharply on Friday 11% more. I see oil is coming down to $40 as well. Don’t talk about U.S. earnings multiple but you should think about Book Value. I think it’s much more conservative. Right now, the DOW is trading at somewhere around 2.6 times Fwd P/BV multiples. Pacific rims is already trading at around 1 time BV of its own. All things count, I think DOW will eventually come to 3,000 to 4,000 level. I’m a chartist; but I do respect fundamental since the chart doesn’t tell you whether the company will go bankrupt or not. Did you know??? Moscow market halt-traded 12 times last week, Jakarta closed market since Wednesday and will open again on Monday. Nikkei, Thailand, Iceland halt-traded last week as well. Next week, I see VIX is going the same way as OIL flirted to $147 a barrel. I see more force-selling is coming cuz margin account will be asked to sell theri stuff given that DOW already fell somewhere around 50% from high. If they decided to pour money in to maintain their position; other who can’t afford to do so will sell their shares. Im not pessimistic; but that’s the reality that happened in ASIA last week and I suspect that will happen in the U.S. as well. I’ve been visit this site quite a while already; but never post any thing down then saw both of you want to go for bargain so just drop by to forewarn you guys. It’s just my personal opinion; hope this board will give me a warm welcome. Safe trades to all….^_^
The creation and collapse of the sub prime loan market has caused grave damage to our economy as well as the worldwide economy. The problem did not arise overnight, but if the clear warnings of the coming disaster had been heeded a year or two earlier, this disaster could have been averted. Here is the list of the Senate and House Legislative committees that are responsible for the “failed economic policies” that Obama likes to bring up over and over and over. The chairman(woman) of each committee and sub committee decides what will be discussed, what will be voted on and what will be ignored. Can you detect what these people have in common?

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Financial Crisis on world stage: Bush and global financial leaders vow to fight the growing financial meltdown. News from NEW YORK — World leaders, warning of a global economic downturn, pledged Saturday to work together to find solutions to what is unfolding as the worst financial crisis since the Great Depression.

President Bush and finance officials from the Group of Seven, Group of 20 and the International Monetary Fund - gathering in the nation’s capital - vowed vigilance in helping economies around the world on the road to recovery.

Concerns about the solvency of banks and financial institutions in recent weeks “had pushed the global financial system to the brink of systemic meltdown,” said Dominique Strauss-Kahn, IMF managing director.

Strauss-Kahn said steps taken so far by the United States and European nations hadn’t been fully effective and that more would be necessary in “the coming months.”

For his part, President Bush did not announce any new actions to stem the financial panic gripping the world, but reiterated measures world leaders are taking to strengthen financial systems.

“We recognize that the turmoil in the financial markets is affecting all our citizens,” Bush said early Saturday morning. “All of us recognize this is a serious global crisis that requires a serious global response for the good of our people.”

Both Bush and U.S. Treasury Secretary Henry Paulson spoke about the latest step being contemplated by the United States - injecting much-needed capital into banks.

“In recent weeks, financial market turmoil intensified throughout the world and credit markets froze, causing a chain reaction resulting in non-financial companies experiencing difficulty in financing normal business operations.” Paulson told an IMF meeting.

The Bush administration is considering whether to use the authority granted in the $700 billion rescue plan enacted on Oct. 3 to take ownership stakes in financial institutions to stabilize and restore confidence in them.

Other countries are also taking action to inject liquidity, protect citizens’ savings and strengthen financial institutions in their own nations, he said.

Finance leaders from the world’s top economies, the Group of Seven, pledged Friday night to take steps to keep leading institutions afloat, unfreeze credit, ensure banks have enough capital to kick start lending and safeguard depositors’ funds and restart the secondary markets for mortgages and other securitized assets.

Bush said that it is vital that countries work together so that their actions don’t undermine others. He pointed to the emergency interest rate cut enacted this week as an example of a coordinated effort.

He plans to expand discussions beyond the G-7 ministers - representing the United States, Britain, Canada, France, Germany, Italy, and Japan - to the leaders of the G-20 emerging market and industrialized nations.

“We’re in this together, we’ll come through this together,” the president said.

But Bush warned that it will take time to see the results. So far, all the measures world leaders have taken have done little to calm jittery markets. “The benefits will not be realized overnight,” he said.

Bush made a surprise visit Saturday at a G-20 meeting of finance ministers and central bankers.

Officials of the G-20 issued a statement late Saturday saying that the “global implications” of the crisis required international cooperation.

The G-20 is made up of rich and emerging nations that produce 90 percent of the world’s economic output. The meeting in Washington came at Paulson’s request. Federal Reserve Chairman Ben Bernanke was also in attendance.
IMF backs G-7 commitment

The International Monetary Fund endorsed the G-7’s commitment to do everything possible to jumpstart the world’s economies.

The IMF’s Monetary and Finance Committee said in a statement that it “recognizes that the depth and systemic nature of the crisis call for exceptional vigilance, coordination, and readiness to take bold action.”

Strauss-Kahn of the IMF said the downturn could be worse than anticipated.

“The world economy is now entering a major slowdown as a result of the most severe shock to mature financial markets since the 1930s, adding to pressure on global economies from high prices for oil and other commodities,” Strauss-Kahn said.

The International Monetary and Finance Committee - the steering arm of the IMF - began its 18th fall meeting Saturday. The 185-nation IMF was created in 1945 to coordinate international financial stability efforts, aiming to avoid financial collapses.

The World Bank, which is a similar organization with a slightly different mandate, also started its fall meeting Saturday. It focuses on longer-term aid for troubled countries, investing in such things as infrastructure development.
Week of fear

The meetings in Washington cap a week in which fear gripped financial markets worldwide. The Dow Jones industrial average had its worst week ever, falling just over 1,874 points, or 18%. Wall Street lost roughly $2.4 trillion in market value during the week, according to losses in the Dow Jones Wilshire 5000, the broadest measure of the market.

Since the mid-September collapse of Lehman Brothers sparked the latest chaos in the financial markets, Bush has repeatedly tried to reassure the Americans.

“We can solve this crisis - and we will,” said Bush, in a speech at the White House Friday, his 27th commentary on the nation’s financial health. “Here’s what the American people need to know: The U.S. government is acting, and we will continue to act, to resolve this crisis and return stability to our markets,” he said.

The government has started taking a number of steps to attack the crisis, Bush said Friday. These include helping homeowners to refinance into more affordable mortgages; cutting the target for the federal funds rate; unveiling a plan to support the market for commercial paper; and offering government insurance for money market mutual funds.

The plan will authorize the Treasury to buy bad mortgage-related investments from finance companies, unfreezing the credit markets by freeing up banks and finance firms to lend once again.

Crisis on world stage: Bush and global financial leaders vow to fight the growing financial meltdown. News from NEW YORK — World leaders, warning of a global economic downturn, pledged Saturday to work together to find solutions to what is unfolding as the worst financial crisis since the Great Depression. Editing by James Smith

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Houston may lose economic cushion, Area becomes more vulnerable to downturn if oil prices continue to decline, economist says.

Oil prices that have slumped to barely half of last summer’s record highs could make Houston more vulnerable to the economic woes afflicting the rest of the country, a top local economist predicts.

Houston isn’t facing a repeat of the 1980s oil bust that gutted a city then so dependent on such a cyclical business, said Barton Smith, the University of Houston economic guru who saw that slump coming when most others didn’t.

But now that crude has fallen 47 percent from its summer highs north of $140 a barrel, he predicted, Houston’s pain will be more like everyone else’s.

“A global recession translates into weakness in demand for oil, and that’s the danger for Houston,” Smith said.

Crude for November delivery closed down 10 percent at $77.70 a barrel Friday on the New York Mercantile Exchange. Natural gas tumbled by 4.2 percent to $6.535 per million British thermal units on the Nymex.

“It took some 22 years of crude oil futures trading to realize the first WTI settlement price of over $60 a barrel. Consider then, that in the last 90 days, the value of sweet crude has dropped by in excess of $62 a barrel,” Tom Kloza, chief oil analyst for the Oil Price Information Service, said of West Texas Intermediate crude.

When crude reached $77 a barrel in July 2007, it was about halfway up the climb to this summer’s all-time highs. The rise helped fuel a boom in exploration and production spending, from deeper waters to Canada’s oil sands to more expensive efforts to squeeze more oil from existing wells.

At first, crude rose despite growing economic worries, even as U.S. demand started shrinking when oil at $145 translated into gasoline at $4 and above.

Demand remained robust then in emerging economies of China, India and the Middle East. That reduced the sting on Houston’s energy hub — which has much of the world’s exploration and production expertise.

But the demand from those emerging regions began shrinking, too, as the financial crisis spread. Banks in the U.S. and elsewhere started failing or getting bailouts. Investors started running for the exits.

The Dow Jones industrial average on Friday closed out its most volatile week ever, down more than 18 percent, while stocks in Great Britain, Germany, Japan and France were nursing bruises as well. The federal government’s $700 billion bailout and interest cuts by the Federal Reserve and central banks in other nations have yet to thaw frozen credit markets or restore frazzled investor confidence.

In addition, energy stocks took a beating throughout the week. Shares of Exxon Mobil slid nearly 13 percent Friday even though it has $40 billion in cash on hand — a boon in times of tight credit.

And suddenly predictions of $200 oil from members of the Organization of the Petroleum Exporting Countries and others became a memory.

Simmons & Company International projected in a note to investors Friday that continuing economic troubles next year will cause “the first contraction in oil demand since the early ’80s.”

That removes some of energy-centric Houston’s cushion and throws it in with the rest of the struggling crowd.

Before the oil bust of the 1980s, 82 percent of Houston’s job market was connected to energy. Now it’s just over half. That protected Houston when low oil prices in 1999 prompted the loss of 25,000 energy jobs while the nonenergy sector gained 50,000.

In a worst-case scenario of the current slide, energy job growth that has ranged from 2.25 percent to 2.5 percent could flatten, Smith said.

While that wouldn’t mirror job losses in other areas, “I’m talking about losing the competitive advantage that allowed us to be above the other big urban areas of the country,” Smith said.

This week OPEC scheduled a meeting for Nov. 18, a month ahead of its regular meeting in December, to consider cutting production to stem crude’s slide. Most analysts believe the cartel wants to squeeze supply enough to keep crude at $80 a barrel or more.

But Smith said that would simply increase OPEC’s spare capacity. A few months ago analysts said OPEC had about 2.5 million barrels a day to fill the gap if other production was disrupted, compared with 10 million barrels more than 20 years ago.

Increased spare capacity would take some of the pressure off oil companies and governments of oil-rich nations to find and produce more, Smith said.

“With prices weak and OPEC struggling to prop them up, it’s not going to be an attractive environment to make the investments we’ve seen over the last two or three years,” Smith said.

Still, analysts said lower crude prices and economic woes don’t erase the future need for increasing production. With economic recovery will come renewed demand, particularly in emerging countries, and revived pressure to find more oil and gas.

“The world is hardly awash in oil,” Kloza said.

The following are just comments. Please leave your views afterwards:

The new economy: Sell a product or a service that is wanted or needed instead of gimmicks, tricks and get rich quick schemes.
“Houston isn’t facing a repeat of the 1980s oil bust that gutted a city then so dependent on such a cyclical business, said Barton Smith, the University of Houston economic guru who saw that slump coming when most others didn’t.
But now that crude has fallen 47 percent from its summer highs north of $140 a barrel, he predicted, Houston’s pain will be more like everyone else’s.”
In 1986 when I asked an executive of a major oil company in Houston, if the oil industry was really losing money or were they just not making as much as they thought they would, he told me they were just not making as much as they thought they would. So much for the oil bust of the 80s. Makes a person wonder how real this one is. Can I take a capitol loss on my taxes because I did not get the raise I wanted?

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Wall Street Stock Markets: Give us a financial help to over credit crisis. If Wall Street wanted to keep the pressure on world leaders for another huge government-led bailout of the global financial system, maybe the rally in the final hour today wasn’t the right strategy.

Nonetheless, hope for a rescue that will finally turn the tide helped pull stocks up sharply from their lows. Some market sectors even scored significant gains for the day — although they barely made a dent in the week’s losses.

The Dow Jones industrials finished off 128 points, or 1.5%, at 8,451.19, after being down as much as 695 points, or 8.1%, at the start of trading.

So we were on our way to Black Friday — for about six minutes. That was followed by a rally that briefly lifted the Dow into positive territory (up about 90 points), then another sell-off, then a major rally in the final hour, then another pullback.

Just another day of insane volatility, except this one was even more insane than usual: The Dow’s intraday swing spanned 1,006 points from its low to its high — the first time that has ever happened.

 For the week, the Dow lost 18.2%, the biggest percentage drop in the index’s 112-year history. The New York Stock Exchange composite plunged 19.5%.

“It’s got to end somewhere,” said Michael Mainwald, head of trading at Lek Securities in New York.

But whether this was it — with the Dow, at its low for the day, off 44.3% from its record high one year ago this week — only the market knows for sure. And it isn’t giving many clues.

A rally in bank stocks set the tone for the day’s recovery, traders said: Everybody was expecting the Group of 7 industrialized nations this weekend to put forth some new package of fixes for global credit markets, which remain largely frozen.

Banks could be the major beneficiaries of any new moves. Treasury Secretary Henry M. Paulson said after trading ended today that the U.S. would move ahead with a plan to inject capital directly into banks and other financial institutions, taking non-voting shares in return. This would be part of the $700-billion bailout Congress approved last week.

In regular trading, JPMorgan Chase & Co. jumped $4.96 to $41.64; Citigroup rose $1.18 to $14.11.

Awaiting concrete action by policymakers, financial institutions and other investors continued to hoard cash early today. The annualized yield on three-month Treasury bills sank to 0.19% from 0.52% on Thursday as buyers swarmed.

Many analysts believe that G-7 finance chiefs have gotten the message, after the mammoth losses in stock markets worldwide this week. Yet the statement policymakers put out this afternoon was filled with generalities. Markets will want something more specific — or else.

“The G-7 has to come up with some really new and profound ideas for lubricating the world’s banking system and restoring the flow of credit to the private sector,” said Carl Weinberg, chief economist at High Frequency Economics in Valhalla, N.Y.

“Otherwise, the ensuing liquidity trap will lock up the world economy and throw us into a recession within a matter of days and weeks, not months and years.”

See economist Nouriel Roubini’s proposals for massive government intervention in this earlier post.

The following are just comments. Please leave your views afterwards:

It is interesting to note what the financial powers that be are willing to acknowledge and what they seem to be unable to disclose. There is a crisis in the credit market, made quite visible mostly by the way the equity market is imploding.

Businesses that do not retain earnings to fund future operations rely on new lending all the time (not particularly wise), but are not able to sell commercial paper. Home buyers with the best credit rating are not granted decent-rate mortgages. What has happened? Why are investors dumping bank stocks? Why are people buying gold and silver? People don’t know whether to put their money under the mattress or spend it as fast as it comes in. Does this mean that bankers are becoming wiser and ordinary people becoming more stupid?

No. This means that reputations, or the credibility of the borrowers of the world are in question, and that the fiat currencies are failing. Our money, after all is based on debt. Moreover, the consequences of this leads to a contradictory mix of communications.

What is being disclosed is that it is a bit more difficult to get a loan. Interest rates “suggested” by central banks are being lowered at the very time that actual rates for new loans can hardly be discussed (if you must ask, you cannot afford it). What are we not told?

Among the things that the financial powers seem unable to disclose are the true consumer price index (CPI: is it the mere official 5.9% or the over 14%, to which the growth of the money supply leads?), the true growth of the national debt or the current deficit, the fact that the income tax is a ruse to hide the true legalized theft of monetary debasement, the true GDP (now negative), the effect of past government regulations that caused the bubbles of the last two decades (CRA and Fair Lending).

The G7 is meeting with the ultimate monetary questions of the table. Now no one is safe. You could wake up Monday morning with financial markets closed for days, with a new world currency, linked in some way to precious metals. If you own gold you may not benefit from this. Who knows what these self-designated geniuses will come up with?

We may now expect any of a variety of desperate measures to mask these government failures that are blamed on the market: massive creation of credit through the Federal Reserve, a new war, censorship, martial law, who knows. The banking-government complex insists on ultimate victory. I, my family and you all are just collateral damage.

We were not expecting to get out of this alive or to take it all with us anyway.
Let it burn, let it all burn! I live in a simple house which I can afford. I take what I can pay for and have no credit card debt. There is one for sale sign in my neighborhood. Drive one minute to the next neighborhood over, with homes in the $500,000 range. Why are their 10 times the amount of homes in foreclosure here? The answer is simple. People got greedy and simply bought too much house. These people CHOSE not to live within their means and now the government is going to wipe their tears away by reaching into my pocket. I meanwhile will keep making my payments with no help. That is what I get for making “smart decisions”. Perhaps I’ll go ahead an make some “bad choices” since following the rules apparently doesn’t pay off.

…”ripping off the poor and middle class to fund the wealthy”??

I am a volunteer tax prepreparer for low and moderate income earners - mostly minorities and seniors. They don’t pay any taxes, thanks to the Bush tax cuts, so it’s not their money that’s going to bail out our credit system. In fact, if they’re under 65, many of them get the Earned Income Credit, another form of government welfare, which BO wants to expand.

Wall Street goes up and down based on imagination and people make a living imagining what it all means. It’s all enough to let your imagination run wild.

$750 billion added to a $10 trillion national debt and the lala land politics that created it is good material for another Golden Compass type movie with Nicole Kidman. Imagine climbing a stack of dollar bills that reaches into space over three times the distance to the moon on your way to magic land.

The only problem is that, this time, imaginations have turned into madness. It’s time to pull the plug on this fantasy movie.

Four homes around me were sold to them whom could not afford them, I do hope they are lost, as they are being run down, that devalue my home, In a 2003 speech BUSH took full credit for the sale with no down payment of homes, i do not fell well about the bailout. it is like paying to have your home wrecked.

Any sane person would realize the markets crashed BECAUSE the bailout passed.

First, it was proposed and the markets went way down. Then the house nixed it and the markets went back up. Then the senate and house passed it and the markets collapsed.

Every sane investor realizes the only thing the government can do is damage, in the form of Paulson ensuring that his buddies at big investment firms are made whole at the expense of the rest of us. So the only sane things to do are sell everything you have right away, or bet on Paulson not being able to actually conduct the rescue due to political harassment.

This reasonable fear that the government is going to save the big institutions at the expense of the rest of us is greatly amplified by the very overt media invovlement in political lobbying to make the bailout happen, and to protect the big institutions that need to be liquidated for the market to recover.

The real way the media can help stabilize the markets is to go over Paulson, his associates, and what he proposes to do with a fine tooth comb so people have some confidence they understand what is going to happen and why. Without confidence based on actual knowledge the only rational presumption is a lot of the stocks I hold are worth zero, because the stocks Paulson’s buddies at Goldman Sachs bought are going to pumped up by government intervention.

What the markets are saying in response to all the “rescue” plans is that no matter how many hundreds of billions of dollars governments conjure out of thin air to give to the corporations that give them the biggest bribes — uh, campaign contributions — that money isn’t going to make it to shareholders, and the shareholders have figured that out. The “rescues” just add to the burden of the typical shareholder/taxpayer. They might reduce pain in the short term, but they increase it in the long term.

How about giving us a plan to become energy independent. Very little is being said about the link of our dependence on foreign oil and it’s exorbitant price and the rapid decline of our economy. The high cost of fuel drives up the cost of food and EVERY consumer product. Families are suffering tremendously from filling up the car to paying electric and heating bills to the rising cost of food. There is little to no money left over to save or invest. Jobs and homes are being lost at a record rate with no end in site. We need to utilize natural sources of energy such as wind and solar as well as integrate all modern technology such as hybrid cars, plug in cars, bio fuels etc. We have the technology and knowledge what our nation seems to lack is a plan of action. We are drowning in our dependence on foreign oil. We need to wake up, educate ourselves and be proactive in demanding our elected officials do everything in their power as leaders of our nation to extract us from the iron grip of our dependence on foreign oil. I just read a book called “The Manhattan Project of 2009″ by Jeff Wilson. I think maybe we should elect him for president! he is brilliant so is his book

The Federal Government is likely to own the banks, the domestic auto companies, some hedge funds, and who knows what else. So, in the future you better only pick investments which are likely to receive government guarantees or funds in a pinch. In China, those specific companies which are politically connected get all the long term contracts, amounting to billions and billions of dollars in business. The government allocates capital. This is our future, as well.

i think the best thing for governments to do is to initiate massive tax increases on those who are able to pay them. this will reduce the ‘crazy money’ out there and will take some of the speculation out of the market place, where greed has driven this market into what we’re seeing now.
with these tax revenues governments should invest in massive public works projects to revitalize nations’ infrastructures, education systems and health systems. this will keep people working and will inject money into circulation and from this a new economy will emerge.
then, governments should initiate policies to reduce market place speculation (such as imposing high taxes on investments sold before a defined time period and a minimal tax on all buys and sells).
next, governments should make a big effort to pay down debt, a real drag on all economies. those lately who have claimed the ‘fundamentals of the economy are strong’ were complete idiots: how can ‘fundamentals’ be strong when governments don’t make an effort to pay their debts.
I would argue that the current measures being taken by the Bush administration and the larger group of “finance ministers” from the G7, are demonstrating an underlying truth which would be impossible for any of them to admit: this melt-down is not a crisis of confidence in the US economy, it is a recognition by investors at large that the global financial industry, lead by the major firms on Wall Street, have constructed a rigged game, the rules of which limit the upside potential of all investors. On the downside, the rules are such that the operators of the game can speculate with the assets entrusted to them, and when their schemes go wrong, tacitly hold their governments hostage to the corrosive effects of near-term financial losses, and thereby effect bail-outs of many varieties in order to sustain the canard that the game itself is honest.

What should a President do about it? I believe he should consider an aggressive investigation into the individuals who perpetrated the sub-prime mortgage irregularities, and use whatever legal means available to expose their malfeasance, and recover assets they have acquried with the compensation they have extracted over the entire course of this loosely understood “racket” they have been operating. He should also draw upon expertise from those who are not part of the racket, but who understand how it works. Two good examples: David M. Walker, former Comptroller General of the GAO, and William Isaac, former head of the FDIC under Ronald Reagan.

The current crisis and the measures being taken give the appearance that Secretary Paulson is willing to spend an unlimited amount of money, as long as the solution protects the status quo in terms of who actually holds power on Wall Street, and their cohorts in Congress. The reason so many voters opposed the bailout was precisely because we wanted to see the manipulators and opportunists flushed out of the system. Until that happens, no one with any sense is going to rely upon Wall Street for anything. It’s clearly a rigged game, the sub-prime mortgage episode has left a massive e-paper trail which substantiates that.

The middle class is the heartbeat of this great nation. When the middle class can’t afford to buy a house, we have real problems. Home values are over inflated in Florida and they SHOULD come way down. I don’t think the houseing market is necessarily “crashing”. Nor do I think capitalism is broken. On the contrary I believe capitalism is working, driving the prices of homes BACK to where they should have been to begin with.

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Great Depression on Wall Street? US Markets Make for worse, and cry for help. Economic policymakers of the G-7 industrialized nations meet in Washington this weekend. If they don’t have their own blueprint for action, Roubini just gave them one.

If ever there was a setup for a Black Friday on Wall Street, this is it.

We can hope it doesn’t happen. But better that investors are realistic about the risks. Global markets and the world economy are at a dangerous point in this debt-fueled debacle, and anyone who says otherwise is a liar.

On Thursday the U.S. stock market suffered its seventh straight loss, and the 7.3% drop in the Dow Jones industrial average — down 678.91 points to a five-year low of 8,579.19 — was the biggest yet in this latest sell-off.

In other words, the get-me-out-at-any-price mentality is more intense than even a few days ago. Many people are morose, demoralized, desperate. They can’t take any more.

 ”Investors are in survival mode,” said Robert Bissell, chief investment officer at Wells Capital Management in Los Angeles. “Stocks of major companies are at ridiculous prices,” he said, but no one cares. “This is what panics are all about.”

Much of the selling now is forced: Hedge fund managers may not want to let stocks go at these prices, but their clients want their money back. Ditto for mutual fund managers, who are facing a surge in redemptions. Selling begets more selling.

There wasn’t much new in U.S. markets Thursday, and that was the problem. Credit markets remain mostly frozen, as wary banks still refuse to lend to one another despite the federal government’s attempts to break that logjam.

The plan for the Treasury to buy up $700 billion in bad loans from banks now is roundly viewed as too little, too late, or just wrong-headed. Critics say it won’t get the banks to lend again any time soon.

New reports from Washington on Thursday said the Treasury might try another approach: injecting capital directly into banks. Yet that revelation also failed to lift market sentiment.

Coordinated, but modest, interest rate cuts by the world’s major central banks Wednesday didn’t work either.

Maybe it’s time to start listening to people other than the same ones who let things get to this point.

Nouriel Roubini, an economics professor at New York University and head of Roubini Global Economics, over the last two years has predicted much of what has since come to pass. His critics dismissed him as Dr. Doom; now they wish they had heeded him.

Roubini is warning that the world has reached the brink of financial and economic calamity. This is from an e-mail he sent to clients late Thursday:

At this point the risk of an imminent stock market crash — like the one-day collapse of 20%-plus in U.S. stock prices in 1987 — cannot be ruled out as the financial system is breaking down, panic and lack of confidence in any counterparty is sharply rising and the investors have totally lost faith in the ability of policy authorities to control this meltdown.

When in markets that are clearly way oversold, even the most radical policy actions don’t provide rallies or relief to market participants. You know that you are one step away from a market crash and a systemic financial sector and corporate sector collapse. A vicious circle of deleveraging, asset collapses, margin calls and cascading falls in asset prices well below falling fundamentals, and panic is now underway.

He says governments have no choice but to take much more dramatic steps — in unison — to try to restore confidence. His list includes:

– another round of interest rates cuts by central banks, at least 1.5 percentage points in size.

– a temporary blanket guarantee of all bank deposits.

– a “rapid reduction of the debt burden of insolvent households preceded by a temporary freeze on all foreclosures.”

– a “massive direct government fiscal stimulus package that includes public works, infrastructure spending, unemployment benefits, tax rebates to lower income households and provision of grants to strapped and crunched state and local government.”

– government recapitalization of financial institutions and a reduction of the debt burden of distressed borrowers.

Economic policymakers of the G-7 industrialized nations meet in Washington this weekend. If they don’t have their own blueprint for action, Roubini just gave them one.

The following are just comments. Please leave your views afterwards:

My comment/question here the other day about Jim Cramer calling a bottom was perhaps made out of ignorance, of which I have plenty.

Here’s my question now: For those who have been in cash for quite some time now, what’s the best way to get into the market as a bottom nears?

Dollar cost average in — into what? Individual stocks? ETFs, mutual funds?

Whom to ask for help? Most people have no idea where to begin.

Vanguard, for instance, will do a cookie-cutter plan, for a fee that depends on how much you have with them. Some experts would say that a cookie plan from Vanguard is much better than doing nothing or sticking with a stock broker. Is it?

Mr. Petruno is the one financial journalist I trust with this question.

I SAW A COMMENT WHERE YOU BLAMED THIS ON THE ELECTION? ARE YOU OUT OF YOUR MIND!!!! GREED IS THE PROBLEM. THE MARKET IS JUST BALANCING ITSELF OUT FROM YEARS OF RIDING THE BULL BUT TO CLAIM SOMEONE IS A MARXIST AND A MESSIAH IN THE SAME PHRASE IS ABSOLUTE STUPIDITY. OUR INFRASTUCTURE IS NOT SOUND! AND THE QUICKER WE INVEST IN REVAMPING IT, THE MORE JOBS, MONEY AND BETTER THE US WOULD BE. I CAN’T BELIEVE YOU WOULD BLAME SOMEONE WHO SUPPOSE TO BE “A NEW KID” ON THE SCENE FOR THIS MESS. HOW ABOUT THE POLITIANS WHO HAVE MAJOR INVESTMENTS IN EXXON, JPM, AIG, CITI, WHO CAN’T BARE TO SAY THE TRUTH B/C THEY KNOW THEY WOULDN’T HAVE A FIGHTING CHANCE. HOW ABOUT THE POLICTIANS WHO WERE TEXTING THEIR BUDDIES(CEO’S OF MAJOR COMPANIES) LETTING THEM KNOW THEY CAN BREATH B/C THE BAILOUT IS GOING THROUGH. OUR GOVERNMENT WASN’T BASED UPON VALUES, IT WAS BASED UPON CORRUPTION. AND IT IS ABOUT TIME THAT WE HAVE SOME ACTUAL PEOPLE IN OFFICE AND NOT PUPPETS.

“freeze on all consumer debt payments including mortgages” - are you kidding me? We are in this mess because people spend money they don’t have. New car every year - big screen TV - the McMansion. The people living beyond their means should be allowed to crash and burn. I don’t have a new car each year and live in a house I can afford - why should I have to pay for the toys of the reckless spenders now that they can’t pay for them on their own.

Ahhh, so NOW the media starts paying attention to Roubini. Shame it didn’t start back at the BEGINNING of the crisis - instead of just labeling him Dr Doom and mocking him. Maybe the politicos will finally even consider asking him for advice, rather than simply relying on the people who got us to this state….

The inexorable laws of economics are leading us to worthless money, no-value assets and debt that is unimaginable and unpayable! Half-measures like bailouts will merely prolong the ever-deepening agony. UN should convene a new Bretton Woods Conference of G8 plus China, India, IMF, World Bank and WTO. With a global economic freeze to calm things -temporarily nationalising everything without payment and cancellling all debts- we can start again with a new agreed international basis for currency, markets, business, international relations, international law and trade. The new basis of value cannot rely on the dollar which has been wantonly destroyed. The new basis must be the value of the one thing that is permanent and indestructible - all the land on earth.

The free market was like a drunken party — out of control. Cutting off the flow of booze, throwing out the most rowdy players, and if necessary imposing a curfew is not necessarily the end of life as we know it… or the end of partying.

Some things don’t work. Credit to uncreditworthy borrowers, for example. Duh.

It was past time for a “get real” wake-up call, painful as it is. The fear will stop when it becomes clear that there are basics still there we can count on. You know, supply, demand. Rules that cut off the liquor to the drunkest guests. We’ll still have a hangover but we’ll get over it.

Thanks GW, it could be worse, just imagine if we would of taken the brilliant idea of GW and replace SS with the stock market, there would be riots in the street by now. I am a Republican and please vote this illiterate pathetic moron and McCain the same out of office. Please send him back to Texas where he blends.

FINANCIAL CRISIS: THE MUSICAL
The economy is no laughing matter. But this parody about the economy is.
Windfall had a lot of it right with a few exceptions. Bush did not practice diversity by allowing the unqualified to receive loans because of affirmative action. He, Rove, and Cheney directed Greenspan to reduce interest rates so that the booming economy of the 90’s, fueled by computers and the internet, would not decline under a Republican. This encouraged the housing industry to do anything and everything they wanted including making some very bad lending decisions.

As far as Obama being a Marxist, that seems a little simplistic. Maybe he is, maybe not. What I have seen, though, is that all Presidents seem to do about the same thing, no matter what party they belong to, in response to events they encounter. It has been a very long time since we have had a leader who knows where he is going and takes us with him.

THE DEMOCRATICS ARE 100% THE BLAME FOR THIS GLOBAL MARKET
CRASH,BY PLAYING GAMES FOR 2 WEEKS WITH THE 700 BILLION BAILOUT. I HAVE BEEN A DEMORCRAT VOTER FOR THE LAST 30 YEARS.
THIS YEAR I AM GOING TO VOTE REPUBLICAN ALL THE WAY!!!!!!!!!!!!
I HAVE LOST MY LIFE SAVING BECAUSE OF THE DEMORCRATS!If the gov’t waves its magic wand and dismisses all consumer debt, does this mean that consumers have to give back the Range Rovers, flat-screens, Jimmy Choo’s, and all the other assorted bling they’ve padded their (now underwater) nests with for the past 8+ years?

Yes, we are soon rid of the feeble-minded simpleton bush, and the repub neo-convicts (oh, how we WISH!!!) but then, I look and see Pelosi, Reid, Blarney Frank, Chris Dodd, LIEberman, Boxer and Feinstein….THIS will be better?????

We have 1 chance to truly express our wrath; VOTE AGAINST EVERY INCUMBENT! (Sorry, Waxman….but ‘YOUR’ Party is GUILTY as ‘ell, too!) The dems have had too much power for far too long; anyone over 35 KNOWS how far Calif has sunk into an abyss, created by sniveling dems. How many welfare recipients now have Govt jobs? How many got a Govt credit card for ‘expenses?’ And how many Detroit garbage scows are they driving, on YOUR taxpayer dollar??? We shudder, to think about THAT!!!

Capitalism, the impostor of universal wealth creation and where it has to be replaced with a universal humane and sustainable value system

Isn’t it now perfectly clear that governments do not run the world but the rich and powerful? For now as investors (the rich) pull out their capital from stock markets all around the world, the global economy is in free-fall, punishing most of humanity in the process. Therefore the ‘capitalist’ system as an economic system is highly unstable and volatile. For what they do affects us all through capitalism and super-capitalism (globalization) and the effects brought about by them alone. This system is therefore bankrupt in human development terms, as when it goes wrong it harms everyone on this planet except the very few rich who undeniably perpetrate this harm on humanity. Therefore when we are all over this human disaster, governments around the world have to change the economics of the world from basically just being there for the rich to that of human sustainability and need. If we do not, the world will continue to be enslaved by capitalism, which makes the very few rich beyond their wildest dreams and the majority unsustainable. In this respect over half the world is still living in poverty and more will be doing so in the future due to the dictates of the capitalist market system. It is the majority of humankind therefore who really suffer when things in this system fail, go so very wrong and where the few who instigated the problem get off scot-free. At the end of this month, if anyone is interested, the WIFC is publishing the ‘independent’ reasoning of some of the world’s most eminent independent thinkers on what can replace our present economic system. It will be published on Press TV. But overall, we have to change completely for our own good, our mere existence and for the lives that our young will now inherit, or may be not.

Dr David Hill
World Innovation Foundation Charity (WIFC)
Bern, Switzerland

Ps. To show that the system is so good for the few I noticed today that Aston martin’s new One-77, the most expensive road car in the world at $2 million a go, is oversubscribed already although it has only just been unveiled this week at the Paris motor show. this shows the system for what it really is and where the rich have no problems and we the majority have them all.

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