Free Internet Press Newsletter - Tuesday September 23 2008 - (813)

Tuesday September 23 2008 edition
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White House Refuses To Change Bailout Plan 2008-09-23 03:55:58 Democratic leaders said they were near agreement with the Bush administration yesterday on key provisions of a massive plan to revive the U.S. financial system, but the two sides remained at odds over other issues and were struggling to gain the support of rank-and-file lawmakers on both sides of the aisle. Although the White House has warned of severe consequences if the bailout plan is not approved by Friday, lawmakers crafting the measure said their work may well stretch past that deadline. The Bush administration is resisting changes to the measure being sought by Democratic leaders and many Republicans, including one that would grant the government authority to cut executive pay at firms that participate in the bailout and another that would guarantee that taxpayers share in the profits if those firms recover financially. Meanwhile, rank-and-file lawmakers - returning to Washington after a weekend in their districts - voiced outrage that taxpayers were being asked to pay for the excesses of Wall Street and that Congress was being prodded to rubber-stamp the biggest federal intervention in the private market since the Great Depression. While Democratic leaders said they could embrace the bailout plan with certain modifications, a growing minority of lawmakers were starting to question the very premise of the Treasury Department's proposal. Sen. Richard C. Shelby (Alabama), the ranking Republican on the Senate banking committee, Monday issued a statement saying he was "concerned" that the bailout plan was "neither workable nor comprehensive, despite its enormous price tag. Read The Full Story Melting Arctic Ice Brings Competition For Resources 2008-09-23 03:55:29 Climate change is freeing the Arctic of ice - spurring a global competition for the natural resources stored beneath. Countries that border the sea are staking new territorial claims and oil giants are dispatching geologists - but what will the tug-of-war mean for the indigenous people and wildlife? Bo Madsen, a climate researcher, is plagued by a simple question: How heavy is the world's largest island? More importantly, Madsen wants to know how quickly its weight is changing. "This is no academic question," the Dane, a scientist at the National Space Institute and the Technical University of Denmark, yells over the whipping of the rotor blades. "The answer will determine the fate of millions of people." Greenland's majestic landscape glides by beneath the helicopter. A mottled gray-and-white glacier tongue winds its way down a series of mountain slopes. Farther up, the jagged terrain gives way to a smooth, seemingly endless expanse of white, capped by a glistening aura that makes it difficult to distinguish between the sky and the surface of the ice cap. The scientists have spent the last two hours flying over the edge of the inland ice in their Super Puma helicopter. The gigantic ice cap is close to three kilometers (1.86 miles) thick. If it were to melt, sea levels worldwide would rise by seven meters (23 feet), spelling the end for many coastal cities. "Did we load the cordless screwdriver?" the 53-year-old Madsen asks his partner, American scientist Eric Kendrick. There is tension in the air, almost as heavy as the metallic chirping of the chopper's drive shafts. How does one measure the recession of an ice cap? A lone mountain peak protrudes from the glacier ice. This is where the Danish and American geophysicists plan to set up their measuring equipment. Their project, called GNET, will be part of a formidable scientific observation network, an early warning system of measuring stations and satellites designed to monitor the Greenland ice cap. "The stations measure the height of the mountain tops once every 30 seconds," Madsen explains, "down to the nearest half a millimeter." This precision is made possible by the radio signals emitted by GPS navigation satellites orbiting the earth. The data give the scientists an indirect gauge of how fast the ice is melting, because rising land means, simply, that the weight of the ice resting on it is decreasing. The researchers have already installed two dozen of these stations all over Greenland, and they have been transmitting data for the past year. According to initial calculations, Greenland has lost 150 billion tons of ice a year in the last four years. This is five times the size of the Aletsch Glacier, the largest glacier in the Alps. GNET will provide certainty, for the first time, on one of the most important questions of global warming: How quickly is the Greenland ice cap melting? Will it take hundreds of years? Or is the ice melting faster than that? "Soon we will be able to tell mankind by how much sea levels will actually rise in the next 100 years." Read The Full Story Anxiety Over Bailout Plan Leads Stocks To Tumble, Oil To Rise 2008-09-22 20:58:56 Jittery investors send U.S. stocks tumbling and oil prices surging Monday as congressional leaders began unveiling their version of a financial industry bailout. Rep. Barney Frank (D-Massachusetts), chairman of the House Financial Services Committee, said House and Senate Democrats along with the Treasury Department have agreed on the basic principles of a bailout plan Monday, but sticking points remain, he said. Democrats in Congress and the Bush administration are expected to clash on a provision to limit the executive compensation packages of firms that receive government help and another proposal that would allow bankruptcy judges to modify mortgages of distressed homeowners - a plan long fought by the mortgage industry. The continued uncertainty about the final version of the plan, which is expected to cost $700 billion, appears to have investors nervous, sending the Dow Jones industrial average down more than 300 points. Meanwhile, oil prices spiked as much as $25 a barrel on the declining value of the dollar and fears that the financial rescue plan, which is expected to cost about $700 billion, could cause inflation. "They realize that even if the bill is successful there are a lot of hurdles to come," said Doug Roberts, chief investment strategist for New Jersey-based Channel Capital Research. "People are coming to realize this might be a stop gap measure. There is a long way to go." Read The Full Story Older Americans Hardest Hit By Financial Markets Turmoil 2008-09-22 20:58:13 Older Americans with investments are among the hardest hit by the turmoil in the financial markets and have the least opportunity to recover. As companies have switched from fixed pensions to 401(k) accounts, retirees risk losing big chunks of their wealth and income in a single day’s trading, as many have in the last month. “There’s a terrified older population out there,” said Alicia H. Munnell, director of the Center for Retirement Research at Boston College.“If you’re 45 and the market goes down, it bothers you, but it comes back. But if you’re retired or about to retire, you might have to sell your assets before they have a chance to recover. And people don’t have the luxury of being in bonds because they don’t yield enough for how long we live.” Today’s retirees have less money in savings, longer life expectancies and greater exposure to market risk than any retirees since World War II. Even before the last week of turmoil, 39 percent of retirees said they expected to outlive their savings, up from 29 percent in 2007, according to a survey by the Employee Benefit Research Institute, an industry-sponsored group in Washington. “This really highlights the new world of retirement,” said Richard Johnson, a principal research associate at the Urban Institute in Washington. “It’s a much riskier world for retirees, because people don’t have defined-benefit plans. They have pots of money and they have to worry about making it last.” Read The Full Story Taro Aso Selected As Japan's Next Prime Minister 2008-09-22 20:57:27 Taro Aso, a former foreign minister who delivers snappy speeches, reads Japanese "manga" comics and talks tough about China, was selected Monday to be Japan's next prime minister. When his selection by the ruling Liberal Democratic Party (LDP) is formalized Wednesday in parliament, Aso, 68, a blue-blooded party stalwart whose grandfather was a prime minister, will be the third Japanese leader in two years chosen by party members without input from the country's voters. "Who else but our party can achieve policies in order to address the public's concerns?" Aso said after easily winning a party vote that had been viewed as a sure thing from the moment Prime Minister Yasuo Fukuda abruptly announced on Sept. 1 that he would quit. As prime minister, Aso will not have to call an election until the fall of next year. But Japan's economy is on the brink of recession, parliament is deadlocked and there is widespread public dissatisfaction with the ruling party. As a result, Aso might quickly dissolve parliament and schedule a nationwide election before his personal popularity dissipates. Recent polls show his approval ratings are slightly above 40 percent. Read The Full Story	Merkel Says Washington Helped Drag Europe Into The Credit Crisis 2008-09-23 03:55:45 Response to Washington's multibillion-dollar Wall Street bailout has involved a lot of skeptical grumbling in Germany and the U.K. German Chancellor Angela Merkel says the Bush Administration has mishandled Wall Street, and that its refusal to adopt stricter rules led to the current crisis. The United States government is campaigning around the world for support for its multibillion-dollar Wall Street rescue package. The reaction has been skeptical at best - and in Europe the plan has been met with bare-knuckled criticism. German Chancellor Angela Merkel has accused the U.S. government of serious failures which she believes contributed to the current credit crisis. In particular she blamed Washington for resisting stricter regulation. On Monday she also said the crisis could hurt the German economy. "The whole thing is going to set the pace for the economy in the coming months and perhaps years," Merkel said at a meeting of her party, the conservative Christian Democrats. Over the weekend the U.S. said it would provide $700 billion to cover bad debt on Wall Street and ensure the survival of some financial institutions. On Sunday U.S. Treasury Secretary Henry Paulson then called on foreign governments to launch similar bailouts for their own banks. "We are talking very aggressively with other countries around the world and encouraging them to do similar things and I believe a number of them will," Paulson told ABC News. Yet the governments of Germany and Great Britain have shaken their heads. Read The Full Story London's Met Office Says Climate Change Deniers Are Deluded 2008-09-23 03:54:57 Climate change skeptics such as Nigel Lawson who argue that global warming has stopped have their "heads in the sand", according to the Met Office in London, England. A recent dip in global temperatures is down to natural changes in weather systems, a new analysis shows, and does not alter the long-term warming trend. The office says average temperatures have continued to rise in the last decade, and that humans are to blame. In a statement published on its website, it says: "Anyone who thinks global warming has stopped has their head in the sand. The evidence is clear, the long-term trend in global temperatures is rising, and humans are largely responsible for this rise. Global warming does not mean that each year will be warmer than the last." The new research confirms that the world has cooled slightly since 2005, but says this is down to a weather phenomena called La Niña, when cold water rises to the surface of the Pacific Ocean. Despite this effect, the office says, 11 of the last 13 years were the warmest ever recorded. Read The Full Story Europe, Japan Balk At U.S. Bank Aid Request 2008-09-22 20:58:43 Europe and Japan turned a cold shoulder on Monday toward a American request that they bail out banks in the manner now being proposed in the United States. The German chancellor, Angela Merkel, also took the opportunity to criticize the United States and Britain for opposing German efforts to put greater regulation, or at least reviews, of the financial sector on the international agenda last year, when she was chairwoman of the Group of 7 industrialized nations. “Everyone who produces a real product knows what it looks like and what standards it is up to,” said Merkel. “One also needs to know with a financial product what’s involved. Otherwise, these sorts of things happen that we then all have to pay for.” After an overnight conference call of finance ministries and central banks, the G-7 industrialized nations welcomed Wednesday’s bailout program and pledged in a statement to “enhance international cooperation.” The G-7 also indicated that countries were free to go their own way in grappling with what has become the worst financial crisis since the 1930s. Read The Full Story Crude Oil Prices Jump By $25 A Barrel 2008-09-22 20:57:48 Oil prices posted their biggest one-day gain on Monday, jumping more than $25 a barrel as investors dashed into commodities on concerns about the government’s plan to bail out the financial system. After a wild last hour of trading, crude oil futures surged as high as $130 a barrel before finally settling at $120.92, a record jump of $16.37. In the last four days, oil prices have risen $29. The dollar also weakened on Monday, creating an incentive for commodities to serve as a currency hedge. Gold, silver and copper all posted strong gains. The rise in oil led a general flight to the perceived safety of commodities as investors seemed to question whether the $700 billion plan to buy troubled mortgage assets would help spur the economy to a quicker rebound. President Bush urged Congress to pass the plan quickly, while Democrats were working on proposals that would include help to homeowners. Monday’s volatility in the oil market was worsened by the fact that the October contract expired at the end of the day. Prices commonly rise when a contract is scheduled to expire as traders rush to cover positions. The New York Mercantile Exchange, briefly halted electronic crude oil trading after prices breached the $10 daily limit, but trading resumed a short time later after the limit was increased to $20. In recent weeks, oil prices had been falling from records reached this summer as slowing economic growth hurt oil consumption. The price of oil fell to a seven-month low when it hit $91.50 on Tuesday. It also traded under $100-a-barrel for the first time since March. But the relief appears to have been short-lived. Read The Full Story
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