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Friday, October 10, 2008

Free Internet Press Newsletter - Friday October 10 2008 - (813)

Friday October 10 2008 edition
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GM, Ford Fight For Survival
2008-10-10 03:28:47

America's biggest car manufacturers, General Motors and Ford, are facing a long, hard battle for survival tonight after Wall Street abruptly lost confidence in their financial stability in the face of plummeting vehicle sales.

In the course of a few hours, GM's shares crashed by 31% to close at $4.76, their lowest level since 1950, while Ford's stock plunged by 21% to a 20-year low of $2.08 on mounting concern that both companies are at risk of bankruptcy.

The Detroit-based car makers, which have been the mainstays of U.S. motor manufacturing for more than a century, are struggling to cope with an evaporation of bank funding for car loans to enable customers to purchase new vehicles.

In a severe blow to their financial credibility, Standard & Poor's said it was considering downgrading its credit ratings for both GM and Ford, citing "the rapidly weakening state of most global automotive markets".

Both are already rated as offering "junk" debt, meaning that they are high-risk prospects for lenders, and a further reduction will make it even harder for them to borrow money. GM's sprawling empire includes brands such as Cadillac, Chevrolet, Saab and Vauxhall. It has traditionally been the largest of Detroit's "big three" car makers, ahead of Ford and privately owned Chrysler.

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Fears Of Recession Take Hold On Wall Street
2008-10-10 03:28:18
ear and foreboding took hold on Wall Street Thursday, as the stock market again plunged and investors became convinced that the nation is on the verge of a deep and prolonged recession. The rout continued in Japan, where stocks plummeted in early trading.

The government took steps toward an extraordinary public investment in U.S. banks and General Motors stock fell to its lowest price since 1950 on fears it will not be able to weather the downturn. Share prices fell across every industry and for each of the 30 stocks in the Dow Jones industrial average, which was down 679 points, or 7.3 percent, to 8579.19.

The plummeting stock market could not be blamed on any single piece of horrible news - there were no additional bank failures or government bailouts or corporate bankruptcies.

"I've never seen a panic like this," said David Wyss, chief economist at Standard & Poor's. "I've seen stock market drops, but not an overall panic."

The broad Standard & Poor's 500 fell 7.6 percent, the seventh consecutive day of misery on Wall Street. The index has now fallen 42 percent from its all-time high one year ago yesterday and 22 percent this month alone. Stocks are on track for their worst calendar year since 1937.

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Stocks Plunge Again, Dow Under 8,600
2008-10-09 18:24:54

Stocks fell sharply in late afternoon trading in New York on Thursday as concerns about the global financial system mounted and investors priced in a deep recession.

The Standard & Poor’s 500 stock index was down nearly 7.6 percent and the Dow Jones industrial average was down 678.91 points, or about 7.3 percent, both posting one of their worst days in post-war history. The Nasdaq composite was down 5.4 percent.

Wells Fargo, Morgan Stanley and other bank stocks were among the biggest losers and the financial sector as a whole was down nearly 11 percent in late afternoon trading, but the major indexes were also pulled down by big drops in stocks like Exxon Mobil, General Electric and Chevron. 

The sell-off suggests investors are pricing in a much deeper recession than the markets had previously thought was likely. New data released on Thursday also showed that retail investors were withdrawing tens of billions of dollars from stock mutual funds - a sign that the panic on Wall Street was spreading.

Thursday’s decline came after the Treasury Department signaled that it would move quickly to inject money directly into big financial firms in addition to buying up to $700 billion in troubled loans and securities from the companies.

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U.S. Weighs Ownership In Banks
2008-10-09 18:24:31
News that the Bush administration is considering taking part ownership in a number of U.S. banks helped restore a relative calm over global financial markets Thursday.

The aim of such a move would be to thaw the lending freeze that threatens to push the world's economy into recession. It comes after rampant fear about the global economy sent investors scurrying on Tuesday for safety in U.S. government securities despite an orchestrated round of rate cuts by the world's central banks.

Investors also were hoping that selling, which gave the Dow its sixth straight day of losses, was overdone. Wall Street began the day higher, but then slid after declines in some blue chip names like General Motors Corp. weighed on the markets.

In an effort to show that governments around the world were focusing intently on ways to resolve the crisis, the administration announced that President Bush would meet with finance officials from the Group of Seven major industrial countries at the White House on Saturday.

"The president will have the opportunity to hear directly from the finance ministers about how the financial crisis is affecting their respective economies and the steps they are taking to deal with these challenges both individually and collectively," presidential press secretary Dana Perino told reporters.
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Suicide Bomber Targets Pakistan's Anti-Terror Police
2008-10-09 18:24:06
A suicide bomber bearing a box of sweets managed to penetrate the most heavily secured police enclave in the capital today, wrecking a residential building that housed anti-terrorism police and injuring half a dozen officers.

Elsewhere in the country, 10 people were killed when a roadside bomb, apparently planted by insurgents, hit a police bus transporting prisoners.

By the standard of recent attacks in Pakistani cities and towns, the toll in the bombing of the police barracks was light: The bomber was the only fatality. But the bold strike against such a well-fortified target was seen as an emphatic show of defiance by Islamic militants.

The box of sweets, delivered just before the blast was set off, contained a note demanding an end to military offensives in the tribal lands along the Afghan border where Al Qaeda and Taliban militants have found sanctuary, intelligence officials said. The note was written in Pashtu, the language spoken in the tribal areas.

The attack, which sheared the corner walls off the three-story brick barracks deep inside the sprawling police compound, was symbolic not only in location but timing. It came as Pakistani lawmakers were receiving a second day of closed-door briefings from senior military officials about Pakistan's ongoing confrontation with insurgents.

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States' Actions To Block Voters Appear Illegal
2008-10-09 03:39:36

Tens of thousands of eligible voters in at least six swing states have been removed from the rolls or have been blocked from registering in ways that appear to violate federal law, according to a review of state records and Social Security data by the New York Times.

The actions do not seem to be coordinated by one party or the other, nor do they appear to be the result of election officials intentionally breaking rules, but are apparently the result of mistakes in the handling of the registrations and voter files as the states tried to comply with a 2002 federal law, intended to overhaul the way elections are run.

Still, because Democrats have been more aggressive at registering new voters this year, according to state election officials, any heightened screening of new applications may affect their party’s supporters disproportionately. The screening or trimming of voter registration lists in the six states - Colorado, Indiana, Ohio, Michigan, Nevada and North Carolina - could also result in problems at the polls on Election Day: people who have been removed from the rolls are likely to show up only to be challenged by political party officials or election workers, resulting in confusion, long lines and heated tempers.

Some states allow such voters to cast provisional ballots, but they are often not counted because they require added verification.

Although much attention this year has been focused on the millions of new voters being added to the rolls by the candidacy of Senator Barack Obama, there has been far less notice given to the number of voters being dropped from those same rolls.

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In Britain: Staring Into The Abyss
2008-10-09 03:39:11

The most concerted effort yet by global authorities to bring an end to the 14-month credit crunch, using every weapon in their arsenal, failed to restore battered confidence Wednesday night. Stock markets tumbled despite a £500 billion  ($1 trillion) bank rescue package from the British government and unprecedented interest rate cuts from the world's key central banks.

The prime minister, Gordon Brown, put his government's credibility on the line as he risked potentially vast sums of public money to save the U.K.'s banking system. "This is not a time for outdated thinking or conventional dogma. Extraordinary times call for bold and far-reaching solutions," he said, promising that the plan would "show that we have led the world in changing the terms and conditions on which we can help to renew the flow of money in the system."

The plan was generally welcomed by the City, but investors were concerned about the lack of detail, which reflected the speed with which it had been drawn up. Investors fear that if the plan does not work, they are staring into the abyss of a possible collapse of the banking system.

Wednesday's dramatic actions included:

-- Britain pledging £50 billion ($100 billion) to buy stakes in its major banks.

-- A further £450 billion ($900 billion) allocated to underpin banks' finances.

-- Unprecedented coordinated rate cuts made by central banks.

-- The International Monetary Fund warning of global recession.

In London, £57 billion ($114 billion) was wiped off the value of shares after the Bank of England cut its key interest rate by half a point to 4.5%, a move matched by seven other central banks, including the U.S. Federal Reserve and European Central Bank.

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U.S. Allegedly Listened In On Calls Of Americans Abroad
2008-10-10 03:28:35

The chairman of the Senate intelligence committee is looking into allegations that a U.S. spy agency improperly eavesdropped on the phone calls of hundreds of Americans overseas, including aid workers and U.S. military  personnel talking to their spouses at home.

The allegations, by two former military intercept officers assigned to the National Security Agency (NSA), include claims that U.S. spies routinely listened in on intimate conversations and sometimes shared the recordings with each other. At least some of the snooping was done under relaxed eavesdropping rules approved by the Bush administration to facilitate spying on terrorists.

The chairman of the Senate intelligence committee, Sen. John D. Rockefeller IV (D-West Virginia), Thursday termed the accusations "extremely disturbing" and said his staff had begun gathering information and may consider holding hearings. "Any time there is an allegation regarding abuse of the privacy and civil liberties of Americans, it is a very serious matter," he said.

The alleged intercepts were described by two linguists who said they witnessed the activity while assigned to the NSA's giant eavesdropping station known as Back Hall at Fort Gordon, Georgia. Adrienne Kinne, 31, a former Army reservist, was an intercept operator at the site from 2001 to 2003, while Navy linguist David Murphee Faulk, 39, held a similar position from 2003 to 2007. Both provided accounts to investigative journalist James Bamford for his book "The Shadow Factory," due for release next week, and also in interviews with ABC News.

Both said the NSA's intercept program was intended to pick up intelligence about terrorists and their plans - which sometimes happened. But the operators also would frequently tap into phone calls by Americans living abroad -  usually satellite phone calls made from the Middle East, or routine calls made by U.S. military personnel from phones in Baghdad's Green Zone, they said in interviews broadcast Thursday.

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Prosecution Rests In Trial Of U.S. Sen. Ted Stevens
2008-10-10 03:27:49

A Democratic senator who has been a longtime friend of Sen. Ted Stevens took the witness stand Thursday to defend the integrity of the powerful Alaska Republican, who is battling corruption charges.

Sen. Daniel K. Inouye (D-Hawaii) testified that he liked and admired Stevens from the moment he met him in the 1960s because of their common experiences as World War II veterans.

"I have never heard of him lying under oath," said Inouye. "I have never known him to lie."

"I can assure you his word is good enough to take to the bank," the senator from Hawaii testified.

The testimony came as defense lawyers began producing a steam of witnesses they intend to call to attest to Stevens'  character, including former secretary of state Colin L. Powell.

Prosecutors rested their case Thursday against Stevens on charges that he lied on financial disclosure forms to hide more than $250,000 in gifts, including renovations to his home in Girdwood, Alaska, from 1999 through 2006. The government alleges that most of those gifts and renovations were provided by Bill Allen, the chief executive of Veco, a now-defunct oil services company that was one of Alaska's largest private employers.

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Federal Debt-Purchasing Program May Exclude States
2008-10-09 18:24:42
Exclusion deal a blow to California as it prepares to issue $4 billion in IOUs.

A new federal program designed to ease credit by purchasing short-term business debt probably won't be available to California and other beleaguered state and local governments, Treasurer Bill Lockyer said Wednesday.

Although the New York Federal Reserve Bank hasn't ruled out helping agencies sell tax-free bonds, Lockyer said the Commercial Paper Funding Facility set up this week by the government to help corporations hobbled by the credit crunch was unlikely to provide any assistance to municipal bond issuers.

"I'm saying, gee, you need to adjust the scope of the program so it includes municipal commercial paper," Lockyer said. "We have a problem, and we don't know how you can care about business and not care about state and local government."

California needs help, and quickly, said Lockyer. Next week, California plans to offer $4 billion worth of short-term revenue anticipation notes for sale.

If the IOUs don't sell, the state could run out of money to pay for many routine expenses by month's end.

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U.S. Military Chief Gives Grim View Of Afghanistan
2008-10-09 18:24:15
With security and economic conditions in Afghanistan already in dire straits, the chairman of the Joint Chiefs of Staff  said Thursday that the situation there would probably only worsen next year.

“The trends across the board are not going in the right direction,” the chairman, Adm. Mike Mullen, told reporters. “And I would anticipate next year would be a tougher year.”

Admiral Mullen said Afghanistan was likely to continue what a new intelligence assessment calls “a downward spiral” barring rapid, major improvements to curb Afghanistan’s booming heroin trade, bolster district and tribal leaders to offset a weak central government in Kabul, breathe life into a flagging economy, and stem the flow of militants who are carrying out increasingly sophisticated attacks from safe havens in Pakistan.

Admiral Mullen struck a pessimistic note when asked about the likelihood of those badly needed changes falling into place. “Both the trends and the status specifically of where we are on those other things right now would indicate that the trends are going to continue,” he said.

The sobering forecast comes as a draft report by American intelligence agencies casts serious doubt on the ability of the Afghan government to stem the rise in the Taliban's influence there, and as the Bush administration has initiated a major review of its Afghanistan policy.

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French Writer Wins Nobel Prize In Literature
2008-10-09 18:23:50
The French writer Jean-Marie Gustave Le Clezio, whose work reflects a seemingly insatiable restlessness and sense of wonder about other places and other cultures, won the 2008 Nobel Prize in Literature on Thursday. In its citation, the Swedish Academy praised Le Clezio, 68, as the “author of new departures, poetic adventure and sensual ecstasy, explorer of a humanity beyond and below the reigning civilization.”

Le Clezio’s work defies easy characterization, but in more than 40 essays, novels and children’s books, he has written of exile and self-discovery, of cultural dislocation and globalization, of the clash between modern civilization and traditional cultures. Having lived and taught in many parts of the world, he writes as fluently about North African immigrants in France, native Indians in Mexico and islanders in the Indian Ocean as he does about his own past.

Le Clezio is not well known in the United States, where few of his books are available in translation, but he is considered a major figure in European literature and has long been mentioned as a possible laureate. The awards ceremony is scheduled to be on Dec. 10 in Stockholm, and, as the winner, Le Clezio will receive 10 million Swedish kronor, or about $1.4 million.

At an impromptu news conference in Paris at the headquarters of his publisher, Editions Gallimard, Le Clezio seemed unperturbed by all the attention. He said he had received the telephone call telling him about the prize while he was reading “Dicatorship of Sorrow,” by the 1940s Swedish writer Stig Dagerman.

“I am very happy, and I am also very moved because I wasn’t expecting this at all,” he said. “Many other names were mentioned, names of people for whom I have a lot of esteem. I was in good company. Luck, or destiny, or maybe other reasons, other motives, had it so that I got it. But it could have been someone else.”

In a news conference in Stockholm after the announcement, Horace Engdahl, the permanent secretary of the Swedish Academy, which awards the prize each year, described Le Clezio as a cosmopolitan author, “a traveler, a citizen of the world, a nomad.”

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Survey: Tuesday's Debate Moved Undecideds To Obama
2008-10-09 03:39:22
Barack Obama beat John McCain in Tuesday night's debate in the eyes of undecided voters by 61 to 39 percent, according to a new online Ipsos/McClatchy poll.

Before the debate, the 389 undecided voters favored McCain by 55-45, but after it they shifted to favor Obama over McCain by 57-43 percent.

The online survey's value is like that of a large focus group; it is not a scientific random sample of the population, and so it has no statistical margin of error. Still, its results are illustrative of how many undecided voters perceived the debate.

While 57 percent said their opinion of each candidate wasn't changed much by the debate, 31 percent said it made them more favorable toward Obama, while only 18 percent said that about McCain.

McCain was judged more mean-spirited and disrespectful by 62 percent, to 38 percent who thought that about Obama. Fifty seven percent of the voters polled thought McCain demonstrated that he was tough enough to be president, while only 43 percent said that about Obama.

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Judge Assails Evidence In Stevens Trial
2008-10-09 03:38:53

A federal judge ruled Wednesday that he would tell jurors to ignore two pieces of evidence that he said were tainted by government bungling in the trial of U.S. Sen. Ted Stevens on corruption charges.

It was the third time that U.S. District Judge Emmet G. Sullivan has chastised Justice Department prosecutors over their handling of witnesses or evidence in the trial.

Stevens (R-Alaska) is charged with lying on financial disclosure forms to disguise accepting more than $250,000 in gifts and renovations to his house in Girdwood, Alaska. Prosecutors allege that most of those gifts and renovations were provided by Bill Allen, the former chief executive of Veco, a now-defunct oil services firm that specialized in maintaining oil rigs.

Sullivan said he would tell jurors to ignore evidence concerning the hours worked by two Veco workers on Stevens'  house because prosecutors knew the information "was not true." One of the employees was in another state when Veco records - introduced as evidence by prosecutors - showed him working on the house. Defense lawyers did not learn that information until they reviewed documents that prosecutors disclosed a few days ago in response to another evidentiary ruling.

"Something smells here," said Sullivan.

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Blogger william said...

Panic has spread to stock markets around the world. A massive sell-off, which began when Henry Paulson announced a $700 billion bailout for the banking system, has turned into a global stampede. Shares fell sharply across Europe and Asia for fifth straight day following a 679 drop on the Dow Jones.
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