Free Internet Press Newsletter - Saturday October 25 2008 - (813)

Saturday October 25 2008 edition
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Signs Of Economic Slowdown Spiral Around The World 2008-10-25 02:11:07 Pessimism about the global economy deepened yesterday as fresh evidence of a worldwide slowdown showed up in feeble corporate profit reports from Asia, sinking commodities prices, and a scramble by emerging economies to prop up their sagging currencies and avert credit defaults. The signs of trouble popped up around the globe. Japanese giants Sony and Toyota, as well as South Korea's Samsung, the world's largest maker of memory chips, flat-screen televisions and liquid crystal displays, posted weakened profits and sales outlooks. Toyota's quarterly sales fell for the first time in seven years. Britain reported its first economic contraction since 1992. Gloom about economic growth translated to low expectations for oil consumption. The Organization of the Petroleum Exporting Countries (OPEC) Friday announced a cut of 1.5 million barrels a day in output - a move that still failed to arrest the slide in crude prices. Meanwhile, copper prices fell to a three-year low. Investors around the world fled stocks and rushed to the relative safety of the U.S. dollar by pouring money into 30-year Treasury bonds, a refuge in times of uncertainty. That drove down the value of foreign currencies, from the ruble to the rupee and the zloty to the peso, forcing central banks to spend billions of dollars to prevent even further deterioration. The turmoil in currency markets threatened to reorder trade relations and complicate recovery efforts. "I think we're moving into a new stage," said Simon Johnson, former chief economist at the International Monetary Fund and now a professor at the Massachusetts Institute of Technology. "There is the danger of ever-widening spheres of disruption." Read The Full Story U.S. Hedge Fund Admits 35 Percent Plunge In Value Since Downturn 2008-10-25 02:10:44 One of the world's biggest hedge fund managers, Citadel, told clients last night that two of its main funds have lost 35% of their value this year after rumors swept the market about its financial position. The Chicago-based firm, which has $20 billion (£12.5 billion) of funds under management, blamed "panic" and "dislocation" on global exchanges for its predicament. Citadel is run by 40-year-old billionaire Kenneth Griffin, an investment prodigy who was married at Versailles palace and who once spent a reported $60 million on a Cezanne painting. On a conference call with investors, Citadel's executives said the firm's liquidity remained strong, with $8 billion of unused credit lines available. "We've made it through 18 years," said Griffin. "We will make it through the next six to eight weeks." Read The Full Story It's Official: The U.K. Economy Is Shrinking 2008-10-25 02:10:12 The Bank of England was under intense pressure Friday night to cut interest rates after new figures showed the economy had contracted for the first time in 16 years as it head into recession. The news hammered the FTSE 100 index, which lost as much as 9% of its value at one point, wiping £90 billion off the value of leading shares. It also clobbered the pound, which suffered its biggest fall against the dollar since 1992, to below $1.53 - a six-year low. As recently as July, the pound would buy $2, but it has been falling rapidly on evidence that the economy is slumping. The pound also hit a record low against the euro Friday of just under 82 pence. Official data showed gross domestic product contracted by 0.5% in the July to September period - a much bigger amount than expected, the first fall since early 1992 and the biggest drop since the fourth quarter of 1990. "It's a big shock that the decline is so large. It is truly dire," said Philip Shaw, chief economist at Investec. Barring a miraculous bounce in the current quarter, the economy will fulfil the technical definition of a recession - two quarters of contraction. Economists expect at least four more quarters of shrinkage in a row, which would be as bad as the recessions of the early 1990s or early 1980s. Read The Full Story Radioactive Scrap From India Used To Make Elevator Buttons In France 2008-10-25 02:09:15 India's nuclear authorities have admitted radioactive scrap was exported from the country to make lift buttons in France. French firm Mafelec sent thousands of lift buttons to the elevator maker Otis, which put them in hundreds of lifts in the country over the summer. Otis said it removed the buttons after France's nuclear safety authority (ASN) announced this week that 20 workers who handled them were exposed to doses of radioactivity ranging from 1 to 3 millisievert (mSv). The French legal limit for people who do not work in the nuclear industry is 1mSv per year. The ASN said it had classified the incident at Mafelec as level two on the international nuclear event scale. The scale goes from zero, which means no safety risk, to seven, which means a major accident. The safety agency said the buttons contained traces of radioactive cobalt-60. Four Indian firms made the components, an Indian official said. It was unclear where the contaminated scrap originated â€" although metal was traced to a foundry in the western state of Maharashtra. Read The Full Story Russia Decries U.S. Sanctions On Arms Exporting Company 2008-10-25 02:08:38 Russia reacted angrily Friday to U.S. sanctions leveled this week against an arms trading company, calling them an "arrogant application" of American laws abroad. Foreign Minister Sergei V. Lavrov said the U.S. move to ban government agencies from dealing with Rosoboronexport, a state-owned company managed by a close friend of Russian Prime Minister Vladimir Putin, was "absolutely incompatible with the new realities in the current world structure." In addition to the Russian firm, the U.S. State Department imposed sanctions against companies in China, South Korea, Sudan, Venezuela and the United Arab Emirates for allegedly selling technology to Iran, North Korea and Syria that could lead to weapons of mass destruction. The U.S. has stepped up its international efforts to apply diplomatic pressure on Iran to make it halt the development of nuclear materials that might eventually be used in a bomb. "If somebody in Washington thinks that in this way the United States will make Russia more accommodating in accepting the U.S. approach to the solution of the Iran nuclear problem, this is a mistake," Lavrov told reporters Friday. Read The Full Story Commentary: Republicans Summon Ugly Old Ghosts 2008-10-25 02:06:54 Intellpuke: This commentary was written by Joseph L. Galloway and appeared on the McClatchy Newspapers website edition for Friday, October 24, 2008. This is an autumn of great discontent as not just the United States, but the entire world trembles on the brink of an economic recession that may bring the kind of pain that's known only to the oldest among us. With days to go before Election Day, the nation watches as a presidential candidate and his political party unravel, frantically dragging every ugly ghost out of the closet in an attempt not only to fool everyone, but also to scare everyone. They appeal to the worst remnants of racism that cling like kudzu to a dying magnolia. Their robot phone dialers intrude on millions of uneasy citizens with messages of hate and fear and envy and greed. They try to paper their opponent with guilt by association: He associated with a man who, decades before they ever met, belonged to a group of wild-eyed student revolutionaries. They and their forces of darkness falsely claim that he's a Muslim at the same time they attack him for belonging to a Christian church whose black minister aimed angry sermons at white America. Read The Full Story World Looks To Beijing For Financial Crisis Help 2008-10-24 20:11:28 Dozens of world leaders are gathered in Beijing, China, for the Asia-Europe summit this week. The question on everyone's mind is: Will China cooperate in facing down the global financial crisis? On the coffee table of presidential suite 1718 in the Grand Hyatt Hotel in Beijing sits a vase full of red roses next to a picture book about Chinese jade. Everything in the room was perfectly prepared on Thursday afternoon for German Chancellor Angela Merkel for when she returned to her room from her meeting with China's premier, Wen Jiabao. She was received in style, with a 19 gun salute from the People's Liberation Army on Tiananmen Square in the heart of the city. On Friday, Merkel moved on to a meeting with Chinese President Hu Jintao and the two came up with a common position in preparation for the world finance summit scheduled for the middle of November in the U.S. China, Merkel said following the meeting, supports the idea that global financial markets need to be re-examined in the wake of the ongoing crisis. Merkel is in good spirits. The Chinese-German relationship has become civil again after many long months of frost, stemming from a meeting between Merkel and the Dalai Lama last autumn. Things have normalized to the point that Merkel can say that her meeting with Wen was "friendly and open." Both sides, said Merkel, "are, despite differences of opinion, intent on working together." Read The Full Story Germany Shies Away From 'Peeping Tom' Airport Scanners 2008-10-24 20:10:54 German government ministers have voiced outrage at European Union plans to adopt controversial full-body scanners, joining a chorus of criticism of the so-called "strip scanners", which aim to deter hijackers. Berlin is not amused. Plans by the European Union to introduce full-body scanners at airports are going a step too far, government ministers said on Friday. "Naturally any device that produces such images won't be used in Germany," Interior Minister Wolfgang Schäuble said on the sidelines of a meetings of European Union Interior ministers in Brussels. The Christian Democrat stressed that national security shouldn't be made to look "farcical" to the general public. "I won't let the German police be thought of as peeping toms - which they are not," he said. A spokeswoman for Schauble's office had already emphasized the government's position during an earlier press conference. "I can tell you with complete clarity that we are not going to cooperate in this mischief," she said. The body scanners are already being tested in some U.S. airports, as well as London's Heathrow and Amsterdam's Schiphol. But German politicians of all stripes backed up the government's position on Friday. "This demand is below the belt, in the truest sense," said Ulla Jelpke of the Left Party. "An airport is not a nude beach." Read The Full Story Europe Feels Thunderclap, Recession Looms 2008-10-24 17:04:23 Stocks sank, the pound and euro plunged, and company after company delivered bad profit news Friday as Europe got another severe jolt from the global financial crisis. From London to Warsaw, an economic thunderclap has sounded across the continent, serving notice that the looming recession everyone was worried about is making its entrance. The pain was acute on stock exchanges. Germany's DAX index slid as much as 10 percent at one point Friday, its lowest level since October 1989, although it recovered somewhat to close down 5 percent. In London, the FTSE 100 index of leading British stocks was as low as 8 percent before finishing down 5 percent, while France's CAC 40 was off 3.5 percent. And that won't be the end of it. The European Union said its monthly purchasing manager's index slid to 44.6 in October, its lowest since the benchmark was created in 1998, and indicating recession. It was down from 46.9 in September. ''It could be big steps down now, and very ugly in the next days,'' said analyst Dirk Mueller, of MWB Fairtrade in Frankfurt, Germany. Read The Full Story U.S. Treasury To Extend Bailout To Insurers 2008-10-24 17:04:01 The Treasury Department is working on ways to broaden its $700 billion bank rescue program to help insurance companies that are a critical backstop to a wide range of deals, bond issues and leasing arrangements, sources familiar with the matter said. Treasury is worried that insurance companies, many of which report earnings next week, could face similar fates as American International Groupas the credit crisis worsens, triggering a new wave of problems for the financial markets. AIG nearly collapsed last month when it was overwhelmed by losses from real estate investments and derivatives, requiring massive government loans of more than $123 billion. It has already burned three-quarters of that money. Treasury officials said today that insurance companies organized as thrift holding companies are eligible to receive money from the government because they are regulated by the Office of Thrift Supervision. Treasury has formed a team to specifically examine mounting trouble within the insurance industry. Industry sources said that Treasury is also looking at ways to aid insurance companies that have no federal regulator. Many of these companies are subject to oversight by state authorities. Concerns about insurers grew this week when Metro and other public transit agencies faced demands to pay billions of dollars to their banks as years-old financing deals unraveled. Read The Full Story Judge Suspends Jury Deliberations In Sen. Stevens' Trial 2008-10-24 17:01:35 Jury deliberations in the corruption trial of Sen. Ted Stevens (R-Alaska) were halted Friday and may not resume until Tuesday to accommodate a juror whose father died, according to the federal judge presiding over the case. U.S. District Judge Emmet G. Sullivan ordered the halt to deliberations after learning that the juror's father died in California Thursday. He said from the bench that he would speak with the juror on Sunday night by telephone to determine whether she would be able to resume deliberations on Monday. If she cannot, Sullivan said he may replace her with an alternate juror, who was excused with other alternates on Wednesday when deliberations began. The halt was the latest snag to hit deliberations in the month-long trial of Stevens, one of the most powerful Republicans in the Senate, on charges he lied on financial disclosure forms to hide more than $250,000 in gifts and renovations to his Alaska home. Prosecutors allege that many of the gifts and remodeling work were financed by an oil services company and its top executive, a close friend of Stevens'. On Wednesday, after deliberating for only four hours, the jury foreman sent Sullivan a note asking for jurors to be released early because conditions had become "stressful." Read The Full Story	Guantanamo Official Targeted In Two Investigations 2008-10-25 02:10:54 A Pentagon official overseeing the Guantanamo war crimes tribunals is the subject of two investigations into his conduct, including one wide-ranging ethics examination into whether he abused his power and improperly influenced the prosecutions of enemy combatants. An internal Air Force investigation into the activities of Brig. Gen. Thomas W. Hartmann appears to be the more significant of the two probes because it was launched only after a preliminary inquiry found sufficient grounds to move forward, said military officials. The Air Force is reviewing allegations that Hartmann bullied prosecutors, logistics officials and others at Guantanamo - resulting in cases going to trial that were not ready and the prosecution of at least one individual on charges that were unwarranted - and assertions that he advocated using coerced evidence despite prosecutors' objections. It also is looking into allegations that Hartmann made intentionally misleading statements, both in public and during the Guantanamo tribunal proceedings, in an effort to downplay the direct role that he played in the overall prosecution effort and in several cases, according to interviews with military lawyers. A second investigation, being conducted by the Department of Defense's Office of the Inspector General, was sparked by the complaints of at least two military officials about Hartmann's allegedly abusive and retaliatory behavior toward them within the Office of Military Commissions. That office oversees the prosecutors and defense lawyers in the terrorism trials taking place at the U.S. naval base at Guantanamo Bay, Cuba. Read The Full Story Veterans: Candidates Agree That The Veterans Administration Is Broken 2008-10-25 02:10:31 Even as the country heads into an era of tighter budgets, John McCain and Barack Obama are united on giving more help to the nation's veterans and overhauling the agency that cares for them. McCain, one of the nation's most celebrated veterans, and Obama, who never served in uniform but became an advocate for veterans issues soon after entering the U.S. Senate, generally agree that the Department of Veterans Affairs does some things well and other things quite poorly. While veterans issues have come into the limelight only briefly during this election, the two campaigns have sparred over how best to improve access to the V.A.'s health-care system. "We expect whoever becomes president to take care of America's veterans," said Joe Davis, a spokesman for the Veterans of Foreign Wars, the oldest major veterans' advocacy group in the country. Read The Full Story Iraq's Prime Minister Won't Sign Troop Deal 2008-10-25 02:09:39 Fearing political division in the parliament and in his country, Iraqi Prime Minister Nouri al Maliki won't sign the just-completed agreement on the status of U.S. forces in Iraq, a leading lawmaker said Friday. The new accord's demise would be a major setback for the Bush administration, which has been seeking to establish a legal basis for the extended presence of the 151,000 U.S. troops in this country, and for Iraq, which won notable concessions in the draft accord reached a week ago. "No, he will not" submit the agreement to the parliament, Sheikh Jalal al Din al Sagheer, the deputy head of the Shiite Muslim Islamic Supreme Council of Iraq, told McClatchy. "For this matter, we need national consensus." Instead, Sagheer said, Iraq's political leaders are considering seeking an extension of the United Nations mandate for the presence of U.S. troops, which will expire on Dec. 31. Russia, a permanent member of the U.N. Security Council, has assured Iraq that it wouldn't veto an extension, he said, adding that one was likely to last between six months and a year. Ali al Adeeb, the chief of staff of Maliki's Dawa party, said Wednesday that the Iraqi parliament "cannot approve this pact in its current form." Read The Full Story Comedian Franken Becomes Serious Contender 2008-10-25 02:08:58 Al Franken settled into the Wagon Wheel Cafe and for 45 uninterrupted minutes talked with a handful of Minnesota farmers about the promise of cellulosic ethanol, the impact of the sinking dollar on crop prices and his pledge to secure a seat on the Agriculture Committee if he is elected to the U.S. Senate. Then the Democrat worked the diner crowd, shaking hands and asking for support like a seasoned statesman, betraying no hint that he was once a longtime writer and actor on "Saturday Night Live" and a sharp-tongued liberal talk-radio host. Nevertheless, after Franken left, Jodi Dickey dismissed his candidacy, saying it was "like Tina Fey running for office." Then the undecided voter thought a bit more about the state of the country and reconsidered. "Actually, maybe that's not such a bad idea." The political climate this year is such that Franken - best known for starring in an "SNL" skit in which his character stares into a mirror and attempts to reassure himself that, doggone it, people like him - has pulled ahead in his Senate race against Republican Sen. Norm Coleman. Read The Full Story Wolf Advocates Protest Bush Administration Move 2008-10-25 02:08:23 The Bush administration is trying again to take the gray wolf of the northern Rockies off the federal endangered species list. Having lost in court this summer in a legal battle with conservationists, the U.S. Fish and Wildlife Service has decided to reopen for public comment its 2007 proposal to delist the wolves. "The position of the service is, we think the wolves no longer need the protection of the Endangered Species Act. We're asking the public to weigh in to that," Ed Bangs, wolf recovery coordinator for Fish and Wildlife, said in an interview Friday. Wolf advocates immediately protested. "This is the Bush administration's last-gasp attempt to remove protections for wolves," said Louisa Wilcox, a senior wildlife advocate for the Natural Resources Defense Council in Livingston, Montana. Read The Full Story Foreign Currency Debt Troubles Mount 2008-10-24 20:11:41 Foreign-dominated debt is squeezing countries from Romania to South Korea as their local currencies falter. When Daniel Ion bought his first home last year, his monthly mortgage payment was $704 (€552). Now it's $939 - and rising. "We wanted so much to have our own house, but now we are really starting to feel the burden," says Ion. Soon, he frets, his salary as a manager at a toy factory may not be sufficient to cover the payments. Another subprime hard-luck story? Not exactly. Ion lives in Bucharest, and his plight illustrates one reason emerging markets such as Romania are in trouble. Like U.S. subprime borrowers, Ion was lured by a mortgage with easy up-front terms. But a bigger problem is that his loan is in euros while his salary is in lei, the Romanian currency, which is off by 12 percent against the euro in the past year. Foreign-currency loans are popular in developing countries because they offer lower interest rates than those in local currencies. In Romania, for instance, foreign currency loans run as low as 8 percent, vs. 10 percent or more for loans in lei. All told, borrowers in emerging markets owe some $4.7 trillion in foreign-denominated debt, up 38 percent over the past two years. Many developing countries still look strong on paper, with big foreign reserves and healthy trade surpluses. But the statistics can mask heavy dependence on offshore loans to keep economies buoyant. "It's amazing that people don't pay attention," says Mark Mobius, head of Templeton Emerging Markets Fund (EMF). Borrowers have been taking out "mortgages in yen and Swiss francs because they thought the money was so cheap." Governments and international lending agencies are scrambling to rescue the hardest-hit countries. The hundreds of billions of dollars the U.S. and Europe are pumping into frozen credit markets also will help. For some countries, it's already too late to avoid a painful hangover, says Morgan Stanley's (MS) Ronny Rehn in London. "There will be extreme repercussions," he says. Read The Full Story German Libraries Hold Thousands Of Looted Volumes 2008-10-24 20:11:11 Hundreds of thousands of books stolen by the Nazis are still in German libraries. A few librarians are acting like detectives, searching for the books and hoping to return them to their former owners or their families. However, many libraries have shown little interest in the troubling legacy tucked away on their shelves. Book, books, nothing but books. Detlef Bockenkamm is walking along a long shelf in the storage room at Berlin's Central and Regional Library. Suddenly he stops and says: "This is where we have the Accession J collection." The letter J refers to Jews. The curator has collected more than 1,000 books here, enough to stretch almost 40 meters (130 feet) if they were lined up next to each other. Bockenkamm and a colleague combed through old documents, checked files and studied records documenting the receipt of books. They eventually discovered that these volumes were stored at the City Pawn Office in Berlin in the spring of 1943. The records indicate that the city library purchased "more than 40,000 volumes from the private libraries of evacuated Jews" through this office. And, this being Germany, the librarians maintained meticulous record books to keep track of their purchases - even though parts of the German capital were already in ruins. As always, preserving order was paramount. The librarians signed each volume and gave it an accession number, beginning with the letter J. Read The Full Story OPEC Orders Cut In Oil Production 2008-10-24 17:04:34 Stung by what it called “a dramatic collapse” in crude prices, the OPEC cartel said Friday that it would reduce output by a steeper-than-expected 1.5 million barrels a day, and suggested more production cuts are coming as the global economic slowdown crimps oil demand. The announcement was made after a brief emergency meeting here Friday morning. While it marks the deepest production cut since 2003, OPEC’s move failed to establish the price floor that members wanted. Oil fell as much as $5 a barrel by midday Friday and was trading below $65 in New York, down from $145 in July. The cartel is not scheduled to meet again until Dec. 17 in Algeria, but OPEC’s president, Chakib Khelil, the Algerian oil minister, said “there will definitely be another cut” at that meeting or possibly earlier, if crude keeps falling. “The fundamentals are not good,” Khelil said in an interview after the meeting. “This is a crisis situation.” Read The Full Story Stocks Plummet As Fears Of Global Recession Intensify 2008-10-24 17:04:15 U.S. stocks plummeted Friday before recovering slightly this afternoon, as investors' fears of a global economic recession intensified. After losing nearly 500 points in early trading, by 3 p.m. the Dow Jones industrial average was down about 2 percent, or 180 points, while the broader Standards & Poor's 500 stock index was down 2 percent or 19 points. The tech-heavy Nasdaq was down 2 percent, or 33 points. In early trading, all three indexes were down more than 4 percent. After climbing somewhat, the Dow Jones industrial average dipped back down by 2:10 p.m., with a loss of 408 points, or 4.7 percent. The broader Standard & Poor's 500-stock index was down about 4.8 percent, or 43 points, while the tech-heavy Nasdaq was down 3.9 percent, or 62 points. Wall Street appeared to be flirting with the possibility of following overseas markets into a major sell-off. The FTSE in London closed down 6.5 percent, after data showed the economy in Britain contracted for the first time in 16 years. The Dax in Germany fell 7 percent, while Paris's CAC 40 lost 5.7 percent. The news was also dour in Asia. The Nikkei in Japan fell 9.6 percent, after Sony reported dismal earnings indicating a difficult road ahead for exports. Still, trading is not as bad as feared before the markets opened and futures trading was halted on the S&P. Futures trading is essentially a bet on what will happen when the markets open. Some traders on the floor of the New York Stock Exchange were disappointed that the market does not appear to be heading toward a full-blown capitulation level. That would unleash bargain hunters waiting for the market to hit bottom. Read The Full Story U.S. Special Counsel Bloch Resigns Under Pressure 2008-10-24 17:01:59 Office of Special Counsel chief Scott J. Bloch resigned under pressure after meeting with White House officials yesterday, five months after the FBIraided his home and his government office as part of an ongoing obstruction of justice probe. Bloch had refused persistent demands from lawmakers and his own employees to leave before the end of the Bush administration, writing to the president on Monday that he would fulfill his five-year term and exit in January. Citing the Greek playwright Sophocles and defending his tenure at the office designed to protect whistleblowers, Bloch wrote that "doing the right thing can result in much criticism and controversy from every side." Employees learned of Bloch's removal at a hastily called 4 p.m. meeting when they were instructed not to accept his phone calls and told that he no longer had access to the office. The interim chief will be William E. Reukauf, a career employee, according to a White House news release. In recent weeks several of Bloch's top deputies have left the office, blaming untenable workplace conditions and distractions that stemmed from the criminal investigation. Read The Full Story Political Blog: Top Salary In McCain Camp? Gov. Palin's Stylist 2008-10-24 17:01:22 Who was the highest paid individual in Senator John McCain’s presidential campaign during the first half of October as it headed down the homestretch? Not Randy Scheunemann, McCain’s chief foreign policy adviser; not Nicolle Wallace, his senior communications staffer. It was Amy Strozzi, Gov. Sarah Palin’s traveling makeup artist, according to a new filing with the Federal Election Commission on Thursday night. Strozzi, who was nominated for an Emmy award for her makeup work on the television show “So You Think You Can Dance?”, was paid $22,800 for the first two weeks of October alone, according to the records. The campaign categorized Strozzi’s payment as “Personnel Svc/Equipment.” In addition, Angela Lew, who is Palin’s traveling hair stylist, got $10,000 for “Communications Consulting” in the first half of October. Lew’s address listed in F.E.C. records traces to an Angela M. Lew in Thousands Oaks, California,  which matches with a license issued by the California Board of Barbering and Cosmetology. The board said Lew works at a salon called Hair Grove in Westlake Village, California. Read The Full Story
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