Free Internet Press Newsletter - Thursday October 23 2008 - (813)

Thursday October 23 2008 edition
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Dow Drops 514 Points As Markets Plummet In Final Hour Of Trading 2008-10-22 21:22:13 Poor corporate earnings sent stocks tumbling Wednesday and crude oil prices to a new low for the year as nervous investors contemplated a global recession. The Dow Jones industrial average, an index of 30 blue-chip stocks, dropped nearly 700 points during the final hour of trading, a time that has become especially vulnerable to volatile shifts during the recent financial crisis. It regained some of that loss in final moments and closed down about 5.7 percent, or 514 points. The Standard & Poor's 500, a broader index watched by market professionals, fell 6 percent, or 58 points. The tech-heavy Nasdaq lost 4.8 percent, or 81 points. "The market is trying to figure out the depth of a global recession as commodity prices continue to fall out of bed," said Peter Cardillo, chief market economist with New York-based Avalon Partners. Investors have grown increasingly worried about the impact of the financial crisis on corporate balance sheets as firms announce plans to lay off thousands of workers and predict poor earnings through the rest of the year, analysts said. The financial turmoil and the dollar's strength against the euro sent crude oil prices to new lows for the year. That has offset building evidence that government efforts to thaw the credit markets and encourage banks to lend to each other may be taking hold. "This is part of the recuperation process," said Matt McCormick, portfolio manager and banking analyst at Bahl & Gaynor Investment Counsel in Cincinnati. "People would like to believe the worst is behind us, but they realize there is still going to be some hurdles in front of us." Read The Full Story U.N.: Wealth Gap Creating A Social Time-Bomb 2008-10-22 21:21:52 Growing inequality in U.S. cities could lead to widespread social unrest and increased mortality, says a new United Nations report on the urban environment. In a survey of 120 major cities New York was found to be the ninth most unequal in the world and Atlanta, Georgia, New Orleans, Louisiana, Washington, D.C., and Miami, Florida, had similar inequality levels to those of Nairobi, Kenya and Abidjan, Ivory Coast. Many were above an internationally recognized acceptable "alert" line used to warn governments. "High levels of inequality can lead to negative social, economic and political consequences that have a destabilizing effect on societies," said the report. "[They] create social and political fractures that can develop into social unrest and insecurity." According to the annual State of the World's cities report from U.N.-Habitat, race is one of the most important factors determining levels of inequality in the U.S. and Canada. "In western New York state nearly 40% of the black, Hispanic and mixed-race households earned less than $15,000 compared with 15% of white households. The life expectancy of African-Americans in the U.S. is about the same as that of people living in China and some states of India, despite the fact that the U.S. is far richer than the other two countries," it said. Read The Full Story Security Ratings Agencies Come Under Fire In Congress 2008-10-22 21:21:13 The head of one of the three largest U.S. credit rating companies told a congressional panel today that competition in the industry could have led the companies to lower standards and give higher ratings to securities than they merited. Raymond W. McDaniel, Jr., chairman of Moody's, said he told Moody's directors last year, "Maintaining our standards may conflict with maintaining market share." The comments came during a hearing of the House Oversight and Government Reform Committee, which is investigating the current financial crisis and whether securities backed by subprime mortgages were fairly valued by the three major credit rating companies - Moody's, Standard & Poor's and Fitch - which made huge profits rating those securities. Investors depend on such agencies for accurate ratings on the credit-worthiness of everything from bonds to securities. McDaniel defended his statement, saying "raising these kinds of tough questions" with the Moody's board is "exactly the job I should be doing." Read The Full Story After Allies Refuse Funds, Pakistan Takes $5 Billion Bailout From IMF 2008-10-22 21:20:26 Pakistan has sought an emergency bail-out from the International Monetary Fund (IMF), a humiliating step forced on Islamabad after allies refused to come up with cash to prevent the country going bust. The IMF confirmed Wednesday that Pakistan had sought funds to meet balance of payments difficulties. It is expected to provide $5 billion (about £3 billion) or more for the coming year, with billions more for subsequent years. Pakistan's finance minister, Shaukat Tareen, said recently that going to the IMF was his "plan C", but Islamabad has been stung by rebuffs from its closest international partners - China, the U.S. and Saudi Arabia - leaving it with few choices. Past IMF programs, requiring Pakistan to agree to austerity measures, were deeply unpopular. The previous regime, of President Pervez Musharraf, had trumpeted its break from this source of finance. "Musharraf, everyone, celebrated that Pakistan had graduated out of IMF programs. He said he had 'broken the begging bowl'," said Faisal Bari, a professor of economics at the Lahore University of Management Sciences. "Going back to the IMF means that the country is carrying the begging bowl again, that it is not on a path of sustainable growth." Pakistan's foreign exchange reserves will run out within about seven weeks, meaning that it will not be able to meet external debt payments, making it bankrupt. The restoration of democracy, with elections in February, coincided with an economic collapse that has sent inflation soaring and the rupee plunging. Islamabad had hoped that, as a front-line state in the "war on terror", allies would come to its aid, as a bankrupt country would not be able to fight the Taliban and al-Qaeda. Read The Full Story Analysis: Expensive Wardrobe Goes Against McCain-Palin Story Line 2008-10-22 21:19:47 If politicos weren't so snide and dismissive of fashionistas, the McCain-Palin campaign wouldn't be in the awkward position of having to explain the $150,000 tab for shopping trips, hairstyling and beauty makeovers for Republican vice presidential nominee Sarah Palin. How do you sell someone as a no-frills hockey mom who sold the state plane, fired the official cook and turned down travel per diem for her family and then try to explain wardrobing her in clothes from Neiman Marcus - a store occasionally referred to by aggrieved, frugal shoppers as Needless Markup? How do you, in barely two months, lavish her with fashion swag worthy of a starlet and valued at more than her annual governor's salary of $125,000? That's not careless. That's just plain stupid. Or to use this election cycle's phrase of choice: That's some seriously bad judgment. Read The Full Story Foreclosure Crisis Falls Hard On U.S. Veterans 2008-10-22 15:28:48 It was always hard for him to make the house payment. James Wilson, a disabled veteran of the Iraq War, knows his monthly mortgage payment of $532 doesn’t sound like much. But living on a fixed income with a family to support caused difficulties he had not anticipated. Now he is more than three months behind on his mortgage. “I’m still working with the lender,” Wilson, 30, said. “They’re friendly, but they want their money.” Wilson, who survived an ambush and separate car and truck explosions in Iraq, joins other veterans who have found themselves caught in the mortgage crisis. Although solid numbers on veteran foreclosures are not available, RealtyTrac, a Web site that follows foreclosures nationwide, reported earlier this year that areas with large numbers of military personnel have foreclosures at a rate four times the national average. For some of the veterans, like Wilson, disability is a major factor. But even veterans without disabilities are having trouble for a variety of reasons: unemployment and repeated calls to duty, frequent relocations that limit the chance to build equity, and low pay for active service members. Read The Full Story Bush Authorizes Record $611 Billion Defense Budget 2008-10-22 15:28:26 Last week, Bush signed the 2009 Defense Authorization Act, allowing $611 billion to be spent this fiscal year on defense. Though the number was not a surprise - the money in the bill had already been appropriated over the last few months - this bill makes it official, placing ceilings on spending, granting authority on who gets to spend what, and nailing the 2009 defense budget into place. It is the highest defense budget since World War II, and Pentagon officials estimate that it will increase by $450 billion over the next five years. Coming in the midst of global economic chaos, the defense authorization bill casts a sharp light on the U.S.'s budgetary priorities. A report by the nonpartisan think tank Foreign Policy in Focus (FPIF), released in late September, notes that an increasing number of experts, both inside and outside of government, have favored a rebalancing of defense funds: spending less on military projects and more on nonmilitary, preventative security efforts. The FPIF report, titled "A Unified Security Budget," outlines $61 billion that could be trimmed from military programs without compromising national security. Even Defense Secretary Robert Gates has encouraged this mentality, stating last November, "Funding for non-military foreign affairs programs … remains disproportionately small relative to what we spend on the military." Yet, the Bush administration's 2009 defense budget actually increased the imbalance between military and nonmilitary spending, and, as the fiscal year's budget is finalized, Congress has done little to alter the administration's plans. If public opinion had its way, Congress would rein in the military budget, according to Kate Gould, legislative program assistant at the Friends Committee on National Legislation, citing a February 2008 Gallup poll. "A majority of Americans who identify as both Republicans and Democrats believe that military spending should be capped at current levels or cut - and those polls were taken before the financial crisis captured global attention," Gould told Truthout. However, she noted, both presidential candidates support an increase in military spending, and Congress has consistently approved the Bush administration's bloated defense budgets, year after year. Read The Full Story Nine Afghan Soldiers Killed In Friendly Fire Incident 2008-10-22 15:27:48 Reporting from Kabul, Afghanistan - In the most lethal "friendly fire" incident in more than a year, Afghan authorities said coalition forces accidentally bombed an Afghan army checkpoint Wednesday, killing nine Afghan soldiers and injuring three others. U.S. military officials acknowledged in a statement that American troops "may have mistakenly killed or injured" Afghan soldiers in Khost province, southeast of the capital, Kabul. The incident is under investigation, said a spokesman, Lt. Cmdr. Walter Matthews. The strike took place before dawn, as a U.S. convoy was returning to base from a nighttime mission. The American statement suggested that the convoy had previously come under fire, saying it was "involved in multiple engagements." Friendly fire incidents involving Afghan and Western forces are relatively rare, but do occur, sometimes involving multiple fatalities. Often, darkness is a contributing factor. Sixteen months ago, U.S. troops on an overnight operation encountered an Afghan police patrol, which mistook them for Taliban fighters. Seven Afghan police were killed in the resulting firefight. Read The Full Story Police Investigation Closes N.Y. Times Lobby 2008-10-22 15:27:17 The lobby of the New York Times’ headquarters building in Midtown Manhattan was closed to visitors around noon on Wednesday after an employee opened an envelope that contained a suspicious substance, officials at the newspaper said. Police officers were investigating the substance. Police officials said that three Times employees were asked to take showers as a precaution against contamination. The 13th floor, where the envelope was opened, was evacuated for several hours, but around 2 p.m., employees on that floor were permitted to return to their offices, according to Catherine J. Mathis, a spokeswoman for the Times. The letter was addressed to Andrew Rosenthal, the editorial page editor of the Times, according to Paul J. Browne, a spokesman for the Police Department. It was not immediately clear if the envelope had a return address or if there was a letter inside. Rosenthal’s executive secretary opened the envelope, and she and two other Times employees, including a mailroom worker, were being decontaminated as a precaution, said Browne. As part of the decontamination, the workers had to bag their clothing and take showers. Read The Full Story U.S. Erred In Contracts For Small Businesses 2008-10-22 01:09:40 U.S. government agencies made at least $5 billion in mistakes in their recent reports of contracts awarded to small businesses, with many claiming credit for awards to companies that long ago outgrew the designation or never qualified in the first place, a Washington Post analysis shows. The Post examined a sampling of the $89 billion in contracts the agencies classified as small-business awards, which help them satisfy a congressional mandate to award nearly a fourth of all government work to small firms. In the data the Post analyzed, federal agencies counted Lockheed Martin and its subsidiaries as "small" on 207 contracts worth $143 million. Dell Computer, a Fortune 500 company, was listed as a small business on $89 million in contracts. The Navy claimed that $60 million in work it gave to Digital System Resources, a division of General Dynamics, went to a small firm - a year after agencies were warned that DSR did not qualify. The Defense Department, which for a century has used Electric Boat to build submarines, labeled the firm as a small business for $1 million in supplies and services. The Department of Veterans Affairs said a computer glitch caused it to claim a $29 million payment to defense security giant CACI as a small-business award. Government officials questioned by the Washington Post acknowledged that mistakes are a long-standing problem, leading to exaggerated claims about the amount of federal work directed to a growing sector of the economy. The Small Business Administration, which annually reports on how agencies performed, said it thinks that many agency mistakes, including some the Post identified, have been corrected in a long-delayed report it plans to release Wednesday. The SBA has worked with agencies in the past several weeks to scrub errors from the data. Read The Full Story Sarkozy Calls For Partial Nationalization Of Key Industries 2008-10-22 01:09:08 French President Nicolas Sarkozy has used France's position as hold of the rotating European Union presidency to call for a massive expansion of the political bloc's economic coordination. In a speech before the European Parliament on Tuesday, French President Nicolas Sarkozy suggested that European countries establish their own sovereign wealth funds to take ownership stakes in key industries. He went on to suggest that European states should coordinate their industrial policies with each other. As the financial crisis morphs into a wider economic crisis, Sarkozy stressed the need for European states to sustain their coordinated approach. "The economic crisis is here," said the French president. Although Sarkozy argued strongly for a unified response to the problem, he stressed that this didn't mean that every country needed to pursue the same policy. "We don't all need to do the same thing, but we do need to coordinate amongst ourselves and come to an agreement on certain issues." Sarkozy underlined that it would require concerted action among E.U. countries to ensure that Europe is a place that continues to build "ships, planes and cars." In his speech Sarkozy called upon European states to set up sovereign wealth funds to help prop up companies listed on European stock exchanges. Otherwise, he said, there is a danger that tanking stock prices will result in a massive sell-off of European assets to foreigners. "I don't want European citizens to wake up in a few months and discover that European businesses are now owned in capitals outside of Europe." He added that the state funds could later sell their stakes at a profit. Sarkozy's use of the term "sovereign wealth funds" to describe his proposal was deliberate. Most sovereign wealth funds are controlled by petro-cash rich nations, like Russia and the Gulf states, and there are concerns in many European nations that with their amassed wealth, they could go on a shopping spree and snap up Europe's tradition-steeped companies. Read The Full Story Wells Fargo CEO Happy With Government Investment 2008-10-22 01:08:29 Wells Fargo & Co. Chairman Richard Kovacevich may not have initially wanted the U.S. government's $25 billion investment in his bank, but he dropped his resistance after realizing the infusion will provide the ailing economy with a vital shot in the arm. ''I have always believed that the system is more important than any individual company,'' said Kovacevich Tuesday night during a question-and-answer session at the Commonwealth Club. ''If that means a company has to sacrifice along the way, so be it.'' Wells Fargo is among first batch of banks being required to sell stakes to the U.S. government, which will invest up to $250 billion in the banking industry in hopes of ending the worst financial crisis since the stock market crash of 1929. When U.S. Treasury Secretary Henry Paulson laid out his plan to invest in Wells Fargo at a meeting last week, Kovacevich protested because he didn't think his San Francisco-based bank should be forced to sell stock that might dilute other shareholders, according to published reports in the New York Times and the Wall Street Journal. Wells Fargo so far has been able to avoid the staggering losses that have hit other major banks stemming from risky home loans made to borrowers with shoddy credit records or inadequate income to repay the debts after real estate prices began to plunge last year. Read The Full Story	Federal Pension Insurance Fund Loses More Than $1.2 Billion 2008-10-22 21:22:02 The government agency that insures private-sector pension plans for millions of Americans lost more than $3 billion in stock investments during the last fiscal year, Rep. George Miller (D-California) announced Wednesday. The Pension Benefit Guaranty Corp. (PBGC) lost $3.1 billion for the fiscal year through Aug. 31, according to preliminary unaudited figures released by the House Education and Labor Committee, which Miller chairs. The loss was offset by modest gains in other investment classes, resulting in a total loss of $1.2 billion. The agency has $68 billion in two pension funds, both of which are used to pay benefits to workers whose pension plans have failed. Read The Full Story Commentary: Green Routes To Growth 2008-10-22 21:21:33 Intellpuke: This commentary was written by Lord Nicholas Stern, IG Patel professor of economics and government at the London School of Economics and leader of the Stern Review 2006 on the economics of climate change. His commentary appeared in the Guardian edition for Thursday, October 23, 2008. Recession is the time to build a low carbon future with the investment vital for economy and the planet. There are two crucial lessons we must learn from the financial turbulence the world has been facing. First, this crisis has been 20 years in the making and shows very clearly that the longer risk is ignored the bigger will be the consequences; second, we shall face an extended period of recession in the rich countries and low growth for the world as a whole. Let us learn the lessons and take the opportunity of the coincidence of the crisis and the deepening awareness of the great danger of unmanaged climate change: now is the time to lay the foundations for a world of low-carbon growth. High-carbon growth - business as usual - will by mid-century have taken greenhouse gas concentrations to a point where a major climate disaster is very likely. We risk a transformation of the planet so radical that it would involve huge population movements and widespread conflict. Put simply, high-carbon growth will choke off growth. To manage the climate, we must cut world emissions by at least 50% by 2050, as recognized by the G8 earlier this year. Given that rich countries' emissions are far above the world average, their cuts should be at least 80%, acknowledged in Europe and the U.K., with the adoption of that target last week. In recent days, Bank of England governor Mervyn King and Gordon Brown have indicated that Britain is heading into recession. We do not know how long it will last, but it is unlikely to be short. The relevant policies are being put in place to avoid plunging the U.K. further into crisis and to start constructing a more robust financial system but, as banks rebuild balance sheets and look for higher capital ratios they will have to restrict lending. Monetary policy alone, important though it is, is unlikely to pull us out of the recession quickly: fiscal policy to expand demand must play a role. But increased government spending should be focused not just on boosting short-term demand. We must promote growth that can be sustained. The coming period of growth can be firmly based in the low-carbon infrastructure and investments that will not only be profitable, with the right policies, but also allow for a safer, cleaner and quieter economy and society. And if, as we must, we halt deforestation - the source of 20% of greenhouse gas emissions - at the same time we can also protect and enhance our biodiversity and water systems. Read The Full Story Homeland Security To Change U.S. Airline Boarding Process 2008-10-22 21:20:48 The U.S. Department of Homeland Security will take responsibility from airlines for checking passenger names against watch lists beginning in January and will require all commercial passengers for the first time to provide their full name, date of birth and gender as a condition of boarding a flight, U.S. officials said Wednesday. The changes will be phased in next year for the 2 million passengers each day aboard domestic and international flights to, from or over the United States. It marks the Bush administration's long-delayed fulfillment of a top aviation security priority identified after the Sept. 11, 2001 terrorist attacks, an effort that has long spurred privacy concerns. Speaking at Reagan National Airport, Homeland Security Secretary Michael Chertoff and Transportation Security Administration chief Kip Hawley said that by gathering more personal information from passengers, the government will dramatically cut down on instances of mistaken identity that have wrongly delayed travelers or kept them off flights. Over the years, countless travelers have faced difficulties because their names are similar to those on the agency's no-fly list or a second list of "selectees" identified for added questioning. They include infants and toddlers, Sen. Edward M. "Ted" Kennedy (D-Massachusetts), and the wife of Sen. Ted Stevens (R-Alaska), Catherine, whose name is similar to Cat Stevens, the former name of the watch-listed pop singer who converted to Islam. "We know that threats to our aviation system persist," said Chertoff. "Secure Flight will help us better protect the traveling public while creating a more consistent passenger pre-screening process, ultimately reducing the number of misidentification issues." Read The Full Story Police Raid 'Germany's Dumbest Bank' Over Lehman Transaction 2008-10-22 21:20:16 German prosecutors and police Wednesday raided the Frankfurt headquarters of state-owned bank KfW over suspected criminal breach of trust. Prosecutors said they had opened an investigation into whether the bank's executives acted criminally in allowing KfW to transfer €319 million (£248 million or about $460 million) to U.S. investment bank Lehman Brothers the day it went bankrupt. KfW was immediately dubbed "Germany's dumbest bank". Lehman, due to pay back $500 million in a swap arrangement, sent no money in return, causing KfW a net loss of €536 million when other charges are included. The investigation has been set up to establish whether executives breached fiduciary duties by failing to prevent the transfer when knowledge of Lehman's liquidity problems was in the public domain. Read The Full Story Stocks Down Sharply In Mid-Morning Trading 2008-10-22 15:28:58 Stocks were down sharply in mid-morning trading Wednesday after a rash of negative earnings reports renewed fears that economies in the U.S. and elsewhere are headed into a deep recession. At 10:40 a.m. Pacific time, the Dow Jones Industrial Average was down 395.06 points, or 4.4%, at 8,638.60. The Dow was down 411 points within minutes of the opening bell before rebounding, only to resume its slide as the session wore on. The Standard & Poor's 500 and the tech-heavy Nasdaq composite index were down 4.7% and 3.1%, respectively - still up from their worst levels of the morning. All 30 of the stocks in the Dow were lower, and losers outnumbered winners almost 8 to 1 on the New York Stock Exchange in the early going. Analysts blamed the selloff on a shift in investor focus from the global credit crisis - which continued to show signs of improvement today - to the prospects for a deep and protracted global recession. Late Tuesday, Citigroup analysts predicted that U.S. economic growth would be stalled for a year in one of the worst recessions since World War II. "Even if it weren't for the credit crisis we'd probably be looking toward a pretty tough recession anyway," John Thornton, co-portfolio manager at Stephens Investment Management Group, told the Associated Press. "The third-quarter earnings are kind of uninspiring but third quarter hasn't been the real concern of people. I think the concern is the depth and duration of the downturn and the effect it's going to have on earnings." Read The Full Story Editorial: Only Half A Bailout 2008-10-22 15:28:36 Intellpuke: This editorial appeared in the New York Times edition for Tuesday, October 21, 2008. A week into the big bailout, banks are beginning to charge each other less for loans and companies are finding it easier to borrow short term. The Dow has been up and down, but so far this week, it is back above 9,000. So has the worst passed? Probably not. The unfortunate reality is that as long as millions of Americans continue to default on their mortgages and housing prices continue to slide, banks will continue to suffer big losses. Unless something is done quickly to help American homeowners avoid foreclosure and stay in their homes, those losses could swamp the bailout effort by exceeding the sums being spent to rescue the banks. Despite the danger posed by foreclosures - to the bailout, homeowners, taxpayers and the economy - the Bush administration and Congress are still depending on banks and other participants in the mortgage industry to voluntarily modify troubled loans, say, by giving borrowers more time to pay or by reducing interest rates. The voluntary approach hasn’t been enough to stanch foreclosures. As things now stand, some 3.2 million homeowners will likely lose their homes to foreclosure this year and next, and millions more will struggle to catch up on delinquencies. Vacancies and defaults will continue to push house prices down; they have already fallen by 20 percent nationwide and are now expected to fall by at least another 10 percent. There is no time to waste to reverse the spiral. Read The Full Story Wachovia Posts $23.9 Billion Loss, Largest Ever For A U.S. Bank 2008-10-22 15:28:08 Wachovia posted a $23.9 billion quarterly loss, as its portfolio of loans deteriorated and deposits fled the bank, laying bare the serious financial straits the company was in before Wells Fargo announced it would buy it this month. The loss is the largest ever for a bank and, coming on top of $10 billion of losses earlier this year, wipes out nearly all the profits the firm has earned since the merger of two banks formed modern Wachovia in 2001. The quarterly report revealed that Wachovia was experiencing a run in September as speculation about whether the bank would survive the financial crisis intensified. Depositors pulled out 5 percent of their money, or $13.4 billion, a massive amount for a bank. San Francisco-based Wells Fargo is buying Charlotte-based Wachovia for $14 billion to form a bank that will have a combined 9,300 branches across the United States. Wells Fargo executives said Tuesday Wachovia's losses were in line with what they expected and won't affect their plans. "We believe that it was prudent for Wachovia to put these losses behind them," Howard Atkins, Wells Fargo's chief financial officer, said in a statement. "We're on track to complete the merger" by the end of the year. Read The Full Story Powder Mailed To Banks And FDIC Office 2008-10-22 15:27:25 The FBI is investigating a series of letters containing suspicious powder that were sent to more than two dozen J.P. Morgan Chase banks and other financial institutions this week, law enforcement officials said Tuesday. The bureau is working in concert with the U.S. Postal Inspection Service and state authorities to determine the source of the letters and the powdery substance they hold. FBI Special Agent Richard Kolko said that preliminary field tests on the substance have so far come up "negative" but that additional studies would be performed at local laboratories. "Even sending a hoax letter is a serious crime," said Kolko, who urged anyone with information to contact law enforcement officials. More than 30 threatening letters were mailed to Chase banks in Elgin, Illinois; Columbus, Ohio; Denver, Colorado;  Newark, New Jersey; and Oklahoma City, Oklahoma. The Federal Deposit Insurance Corp. office on North Fairfax Drive in Arlington, Virginia, received a similar missive. No injuries have been reported from exposure to the powder. Read The Full Story U.S. Banks Weighing Other Uses For Taxpayers' Dollars (a.k.a. The Bailout) 2008-10-22 01:09:49 Several major U.S. banks are leaning toward spending a portion of their federal rescue money on acquiring other financial firms rather than for issuing new loans, the primary purpose of the government's $250 billion initiative to invest in banks. J.P. Morgan Chase, BB&T, and Zions Bancorporation have all said in recent days that they are considering using some of their federal money to buy other banks. About 10 financial institutions belonging to the Financial Services Roundtable, which represents 100 of the nation's largest financial services firms, are also considering making acquisitions with the money, said Scott Talbott, the group's senior vice president. There is a growing consensus among Treasury and other federal officials that allowing healthy banks to use the money to acquire banks in jeopardy of failing could stabilize the economy and bolster confidence in banks. This could also save money for the Federal Deposit Insurance Corp. Treasury Secretary Henry M. Paulson, Jr., confirmed Tuesday that some banks may use the capital they receive through the Treasury program to buy weaker banks and that this could benefit the financial system. Read The Full Story E.U. Climate Stalemate Could End Global Deal 2008-10-22 01:09:23 Time is running out. If the European Union is unable to resolve internal differences over its ambitious emissions reductions plan, then global climate talks could suffer, say experts. The world needs European leadership. The vision is an admirable one. Last spring, the European Union announced ambitious new goals to radically cut CO2 emissions across the entire 27-nation bloc. Once the details of the reductions were agreed on, the European Union  would be in pole position going into the global climate discussions which kick off this December. An ambitious and exemplary Europe, so the concept went, would be able to use the moral high-ground to urge other major polluters in the world to mend their ways. That vision, though, may now be in danger. With just six weeks to go before representatives from around the globe gather in Poznan, Poland to work towards a successor to the Kyoto Protocol - a process known as the Copenhagen process after the location chosen for the 2009 climate summit - the European Union is having trouble passing a final version of its emissions reduction package. A number of E.U. members are demanding changes, exceptions or opt outs, meaning the bloc's role as a global climate protection leader could be compromised. "If the European Union does not get its act together on a clear climate agreement and it does not continue pressing ahead globally, that would relax a lot of pressure on the U.S.," Christian Egenhofer, a climate change expert who is a senior fellow at the Center for European Policy Studies, told Spiegel Online. "And that could very well lead to Copenhagen being a non-event." Read The Full Story German Economy Minister Urges Bankers To Give Up Bonuses 2008-10-22 01:08:54 German Economics Minister Michael Glos urged investment bankers on Tuesday to follow the example of Deutsche Bank Chief Executive Josef Ackermann and forego any bonus payments they may be due. "It would be fitting for the bankers who are responsible for this crisis to show more humility," Glos told the Passauer Neue Presse newspaper in an interview published on Tuesday. "A sign of remorse and transformation would perhaps restore some of the lost faith in the banks and their managers," said Glos. He said it would be a good signal "if many other investment bankers were to join Herr Ackermann and donate their bonuses to a good cause." Deutsche Bank, Germany's biggest bank, said last week its top executives will forego 2008 bonuses in response to the crisis, making it the first complete management board to take such a stance. The money given up by Ackermann and others will be used to prop up wages of other bank employees whose salaries are hit harder by the effects of the finance crisis, the bank said. Executives at other banks have also declined bonuses, including Morgan Stanley CEO John Mack, who passed up his 2007 bonus. Read The Full Story
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