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Tuesday, October 14, 2008

Free Internet Press Newsletter - Tuesday October 14 2008 - (813)

Tuesday October 14 2008 edition
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Commodity Prices Fall In Financial Crisis
2008-10-14 03:35:14
The global financial panic and the economic slowdown have put at least a temporary end to the commodity bull market of the last seven years, sending prices tumbling for many of the raw ingredients of the world economy.

Since the spring and early summer, when prices for many commodities peaked amid fears of permanent shortage, wheat and corn - two cereals at the base of the human food chain - have dropped more than 40 percent. Oil has dropped 44 percent. Metals like aluminum, copper and nickel have declined by a third or more.

The swift turnaround is the brightest economic news on the horizon for consumers, putting money into their pockets at a time they need it badly. Gasoline prices in the United States are falling precipitously - by about 24 cents over the last five days, to a national average of $3.21 a gallon on Monday - and analysts said they could go below $3 a gallon nationally this fall, down from a high of $4.11 a gallon in July.

Prices for most commodities remain elevated by past standards, and they rose a bit on Monday amid the broad market rally. The trend seems to be downward as traders weigh the prospect that the global economic crisis will lead to sharp drops in demand. The big question is whether prices will drop all the way to long-term norms or whether Asia’s continuing economic boom has set a floor.

The rapid commodity decline has eased fears of inflation, a reason central banks were able to lower interest rates around the world last week in an effort to salvage economic growth. It also represents a fundamental shift of view that is driving markets these days.

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Editorial: Mr. Paulson's Client
2008-10-14 03:34:48
Intellpuke: This editorial appeared in the New York Times edition for Monday, October 13, 2008.

Call it bailout, take two. With credit markets frozen and the financial system teetering on collapse, Treasury Secretary Henry Paulson has decided to invest $250 billion directly in the nation’s banks in exchange for an ownership stake. It is a bold move for a desperate time. But Mr. Paulson still has to do more to ensure that American taxpayers, whose money he is investing, get the best deal.

The hope is that new capital - along with a government guarantee for new bank debt issued over the next three years - will get the banks lending freely again. The approach - an about-face from Mr. Paulson’s earlier plan to buy up the banks’ bad assets - is more in line with European efforts. Coordination is essential to manage what has clearly become a global financial crisis.

By taking an equity stake, taxpayers could have a better chance of seeing an eventual return on their investment. If the banks do turn around, then the government, as a shareholder, reaps the benefits.

But we are disturbed that Mr. Paulson wants the government to be a passive investor with little say on how these banks are run, despite the billions of dollars at risk.

That means the banks’ current boards and current management - the same people who got the country into this mess - will still be making all of the decisions.

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Sex Scandal Shakes Florida Congressional Race
2008-10-14 03:34:01
The Florida congressman who succeeded Mark Foley after he resigned because of a sex scandal is now embroiled in a sex scandal of his own, and has requested a Congressional ethics investigation to clear his name.

The congressman, Tim Mahoney, a Democrat, agreed to a $121,000 settlement with a former mistress who worked on his staff and was threatening to sue him, said two Democratic staff members who have been briefed on the settlement.

The revelation, first reported by ABC News, could cost Mahoney his House seat. His South Florida district is conservative, and he was already in one of the most competitive races involving an incumbent Democrat.

Mahoney was elected two years ago after the resignation of Representative Foley, a Republican, whose lewd Internet messages to Congressional pages created a national outrage.

Without denying the accusations or explaining how he might benefit from an ethics investigation, Mahoney said the truth would vindicate him.

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Commentary: Now It's Wall Street's Turn
2008-10-14 03:33:17
Intellpuke: This commentary was written by Washington Post Business Columnist Steven Pearlstein. It appeared in the Post edition for Tuesday, October 14, 2008. Mr. Pearlstein's commentary follows.

The country has done for Wall Street. What is Wall Street willing to do for the country?

Now, what was that about Hank Paulson having blown it?

How he foolishly let Lehman Brothers go under and started a chain reaction that quickly turned into a financial meltdown?

How he was so focused on his cockamamie plan to buy up distressed mortgages and mortgage-backed securities, instead of injecting capital into banks in exchange for shares?

How he and the other finance ministers were so way behind the curve this past weekend in failing to come up with a detailed and coordinated plan to restore confidence in financial markets?

The truth is we were going to have a serious financial crisis no matter what Paulson did or didn't do, thanks to the incredible ineptitude of Wall Street and the nation's financial regulators over the past few years, whether an insolvent and mismanaged investment bank was rescued or not. Lehman was the veritable straw that finally broke the back of the financial camel overloaded with debt. If it hadn't been Lehman, it would have been something else.

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Commentary: This Stock Collapse Is Nothing When Compared To The Nature Crunch
2008-10-13 21:57:11
Intellpuke: This commentary was written by Prof. George Monbiot and appeared in the Guardian edition for Tuesday, October 14, 2008.

The financial crisis at least affords us an opportunity to now rethink our catastrophic ecological trajectory.

This is nothing. Well, nothing by comparison to what's coming. The financial crisis for which we must now pay so heavily prefigures the real collapse, when humanity bumps against its ecological limits.

As we goggle at the fluttering financial figures, a different set of numbers passes us by. On Friday, Pavan Sukhdev, the Deutsche Bank economist leading a European study on ecosystems, reported that we are losing natural capital worth between $2 trillion and $5 trillion every year as a result of deforestation alone. The losses incurred so far by the financial sector amount to between $1 trillion and $1.5 trillion. Sukhdev arrived at his figure by estimating the value of the services - such as locking up carbon and providing fresh water - that forests perform, and calculating the cost of either replacing them or living without them. The credit crunch is petty when compared to the nature crunch.

The two crises have the same cause. In both cases, those who exploit the resource have demanded impossible rates of return and invoked debts that can never be repaid. In both cases we denied the likely consequences. I used to believe that collective denial was peculiar to climate change. Now I know that it's the first response to every impending dislocation.

[British Prime Minister] Gordon Brown, for instance, was as much in denial about financial realities as any toxic debt trader. In June last year, during his Mansion House speech, he boasted that 40% of the world's foreign equities are now traded here. The financial sector's success had come about, he said, partly because the government had taken "a risk-based regulatory approach". In the same hall three years before, he pledged that "in budget after budget I want us to do even more to encourage the risk takers". Can anyone, surveying this mess, now doubt the value of the precautionary principle?

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Palin Mistakes Fans For Protesters
2008-10-13 21:56:44
Republican vice presidential candidate Sarah Palin mistook some of her own fans for hecklers Monday at a rally that drew thousands.

A massive crowd of at least 20,000 spread across the parking lot of Richmond International Raceway, and scores of people on the outer periphery more than 100 yards from the stage could not hear.

"Louder! Louder!" they began chanting, and the cry spread across the crowd to Palin's left. Some pointed skyward, urging that the volume be increased.

Palin stopped her remarks briefly and looked toward the commotion.

"I hope those protesters have the courage and honor to give veterans thanks for their right to protest," she said.

Some in the crowd tried to shout toward her what was really being said, but she couldn't hear them.

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Obama Proposes New Economic Measures
2008-10-13 17:41:35
Determined to keep the campaign spotlight on the economy, Sen. Barack Obama added $60 billion in new tax breaks and other benefits to his economic stimulus plan, and urged Congress to act quickly after the election to provide middle-class relief.

While his opponent, Sen. John McCain, has reportedly considered but not yet spelled out additional economic recovery steps, the Democratic nominee outlined several costly new proposals at a speech here this afternoon. They include:

-- A temporary tax credit for firms that create jobs in the U.S.

-- Penalty-free 401(k) and IRA withdrawals through 2009, to allow families to withdraw up to 15 percent of their savings, up to $10,000.

-- A 90-day foreclosure moratorium for homeowners making "good-faith efforts" to keep up with their mortgage payments.

-- Creating a new entity to lend to state and local governments, allowing for an effort similar to the liquidity assistance that the Federal Reserve recently extended to commercial banks.

-- The temporary elimination of taxes on unemployment insurance benefits.
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Commentary: Alaskan Independence Party: The Last Refuge Of A Scoundrel
2008-10-13 17:41:01
Intellpuke: This commentary was written by Robert F. Kennedy, Jr., and appeared in the Huffington Post online edition for Thursday, October 9, 2008.

 In 2004, America's malleable mainstream media allowed itself to be manipulated by artful Republican operatives into devoting weeks of broadcast attention and drums of ink to unfairly desecrating John Kerry's genuine Vietnam heroics while obligingly muzzling serious discussion of George W. Bush's shameful wartime record of evasion and cowardice.

Last week found the American media once again boarding Republican swift boats against this season's Democratic candidate armed with unfair and hypocritical attacks artfully designed by GOP strategists to distract attention from the cataclysmic outcomes of Republican governance. Vice Presidential hopeful Sarah Palin has taken to faulting Senator Barack Obama for his casual acquaintance with a respected Illinois educator Bill Ayers, who forty years ago was a member of the Weathermen, a movement active when Obama was eight and which he has denounced as "detestable." Palin argues that the relationship proves that Obama sees "America as being so imperfect that he is palling around with terrorists who would target their own country."

The Times dedicated a page one article to Obama's relations with Ayers and CNN's Anderson Cooper obliged Palin by rewarding her reckless accusations about Obama's patriotism with a major investigative report. Fox, meanwhile, is still riveting its audience with wall to wall coverage of this pressing irrelevancy.

If McCarthy-era guilt-by-association is once again a valid political consideration, Palin, it would seem, has more to lose than Obama. Palin, it could be argued, following her own logic, thinks so little of America's perfection that she continues to "pal around" with a man - her husband, actually - who only recently terminated his seven-year membership in the Alaskan Independence Party. Putting plunder above patriotism, the members of this treasonous cabal aim to break our country into pieces and walk away with Alaska's rich federal oil fields and one-fifth of America's land base - an area three-fourths the size of the Civil War Confederacy.

AIP's charter commits the party "to the ultimate independence of Alaska," from the United States which it refers to as "the colonial bureaucracy in Washington." It proclaims Alaska's 1959 induction as a state "as illegal and in violation of the United Nations charter and international law."

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Hindu Threat To Christians: Convert Or Flee
2008-10-13 14:30:34
The family of Solomon Digal was summoned by neighbors to what serves as a public square in front of the village tea shop.

They were ordered to get on their knees and bow before the portrait of a Hindu preacher. They were told to turn over their Bibles, hymnals and the two brightly colored calendar images of Christ that hung on their wall. Then, Digal, 45, a Christian since childhood, was forced to watch his Hindu neighbors set the items on fire.

“ â€˜Embrace Hinduism, and your house will not be demolished’,” Digal recalled being told on that Wednesday afternoon in September. “ â€˜Otherwise, you will be killed, or you will be thrown out of the village’.”

India, the world’s most populous democracy and officially a secular nation, is today haunted by a stark assault on one of its fundamental freedoms. Here in eastern Orissa State, riven by six weeks of religious clashes, Christian families like the Digals say they are being forced to abandon their faith in exchange for their safety.

The forced conversions come amid widening attacks on Christians here and in at least five other states across the country, as India prepares for national elections next spring.

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Stock Slump Imperils Putin's Effort To Pump Up Russian Wealth, And His Legacy
2008-10-13 14:30:06
The stock market here has swooned so often in recent weeks that regulators have repeatedly shut it down, as if Russia, which aspires to be a financial powerhouse, has become just another bumbling backwater. The oligarchs, those Kremlin-connected magnates who once dazzled the world with their riches, are reeling. Vladimir V. Putin is facing a threat to his legacy of bringing growth, stability and a renewed swagger to this nation.

The global financial crisis has not spared Russia, wiping out roughly a trillion dollars in wealth and forcing the government to adopt a broad rescue plan to shore up banks. At stake is the country’s robust economy over much of the last decade, which has for the first time given many Russians a taste of comforts long enjoyed in the West.

For now, the damage has been largely limited to the Russian elite. While Russia’s stock market has plummeted by about two-thirds since May, more than those in the United States and Western Europe, the country has not yet developed a broad investor class, and most people have not squirreled away their savings in the market.

As a result, though the stock market here had soared to $1.5 trillion in value, making it one of the world’s biggest, it had a very narrow base of investors. It was dominated by foreign and Russian investment funds, which sprinted for the exit when things started turning bad.

The Kremlin has also sought to contain the fallout from the crisis by having the major Russian television networks, which it controls, play down or even ignore the stock market collapse here. The network news programs have instead focused on financial troubles in the United States and Europe.

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Morgan Stanley Agrees To Revise Mitsubishi Deal
2008-10-13 14:29:26

The embattled investment bank Morgan Stanley announced Monday morning that it had closed its deal to sell a 21 percent stake to a large Japanese bank, securing a $9 billion lifeline.

The deal had fallen into question last week as Morgan Stanley’s stock lost about 59 percent of its value. It completion was considered a crucial step in the federal government’s strategy for revitalizing the financial system by luring outside investment while it considers buying stock in banks directly.

Mitsubishi UFJ, the world’s second-largest bank, invested $9 billion in Morgan Stanley as planned, but the Japanese bank demanded better terms. The two banks spent the weekend in negotiations to come up with a plan that could be announced before the markets opened on Monday morning. The hope is that Mitsubishi’s backing will stem the tide of doubt about Morgan Stanley’s future.

The original terms said that Mitsubishi would purchase $3 billion in common stock and $6 billion in convertible preferred stock. In the new deal, all of the investment is in preferred stock. Though the total investment remains the same, the Japanese bank is paying lower prices per share - $25.25 instead of $31.25. Morgan Stanley will pay Mitsubishi a 10 percent dividend on the entire investment instead of paying a dividend on only part of the investment, as previously planned.

A portion of the Japanese investment is now in nonconvertible preferred stock, a departure from the previous plan to issue common equity and convertible preferred stock.

Morgan Stanley shares were up 74 percent on Monday, to $16.93.

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U.S. Backs Mitsubishi's $9 Billion Stake In Morgan Stanley
2008-10-14 03:34:59
U.S. Backs Mitsubishi's $9 Billion Stake In Morgan Stanley

U.S. officials paved the way Monday for a private $9 billion investment into Morgan Stanley by Japan's largest financial firm by promising to protect its stake in the struggling Wall Street bank in the event of a government bailout.

Mitsubishi UFJ Financial is throwing a lifeline to Morgan Stanley in exchange for 21 percent of the company. The deal bolsters the capital position of the Wall Street firm, whose shares had declined sharply over the past few weeks as some traders bet it would collapse. Monday, Morgan Stanley's shares jumped 87 percent, or $8.42, to close at $18.10.

Mitsubishi had said last month it would make an investment in Morgan Stanley, but questions emerged about whether the deal would go through after Morgan Stanley's shares plunged and the Japanese stock market tanked. The new deal is more generous to Mitsubishi, offering the Japanese bank preferred stock paying a 10 percent dividend rather than a mix of common and preferred shares.

Mitsubishi also was concerned about a U.S. government plan to take equity stakes in banks, perhaps wiping out existing shareholders. Treasury officials assuaged those concerns over the weekend, pledging that if the government did make investments in banks, Mitsubishi wouldn't see its investment disappear, according to a person familiar with the conversations.

A Morgan Stanley official said company executives believed throughout the process that the bank doesn't need a capital injection from the government.

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Iraq Opens Bidding On Oil Fields
2008-10-14 03:34:36
Iraq opened bidding Monday on the first round of contracts to develop its oil fields since the fall of Saddam Hussein,  a move intended to jump-start a sector crucial to the country's rebuilding.

Iraq has the world's third-largest oil reserves. Yet, despite five years of efforts and $2.7 billion in U.S. reconstruction funds, Iraqi production is still well below the frequently cited U.S. goal of 3 million barrels per day.

Oil fields have been looted and attacked by insurgents since the 2003 U.S.-led invasion, technical experts have fled abroad because of violence and the infrastructure is creaky after years of international sanctions and neglect. Iraq needs billions of dollars of investment to increase production, experts say.

"Current production is by no means meeting demand for the reconstruction of the country," Iraq's oil minister, Hussein al-Shahristani, told reporters after meeting Monday in London with representatives of three dozen international oil companies. "International companies are needed to fast-track development. The response was fairly encouraging."

Vera de Ladoucette, director of Middle East research for Cambridge Energy Research Associates, noted that the first round of bidding involves fields representing a third of known Iraqi oil reserves.

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U.S., Iraq Seek Plan B On Allowing U.S. Troops To Stay Beyond Dec. 31 Deadline
2008-10-14 03:33:44

With time running out for the conclusion of an agreement governing American forces in Iraq, nervous negotiators have begun examining alternatives that would allow U.S. troops to stay beyond the Dec. 31 deadline, according to U.S. and Iraqi officials.

Neither side finds the options attractive. One possibility is an extension of the United Nations mandate that expires at the end of the year. That would require a Security Council vote that both governments believe could be complicated by Russia or others opposed to the U.S.-led war. Another alternative would amount to a simple handshake agreement between Iraqi Prime Minister Nouri al-Maliki and President Bush to leave things as they are until a new deal, under a new U.S. administration, can be negotiated.

Negotiators have been stuck for months on the question of legal jurisdiction over U.S. troops and immunity for possible crimes. Even if the sides reach a deal in the next few days or weeks, it is not clear that a formal status-of-forces agreement could be approved by the end of the year. Maliki has pledged to submit an accord to Iraq's divided parliament before he signs it - a promise he reaffirmed last week during a visit to Grand Ayatollah Ali Sistani, Iraq's most influential Shiite cleric. Sistani has said he will not endorse any document without the support of Iraq's population and political factions.

If the parliament refuses, Maliki would have "no choice" but to request a U.N. extension "because the American forces will lose their legal cover on Dec. 31," he told the Times of London in a weekend interview. "If that happens, according to international law, Iraqi law and American law, the U.S. forces will be confined to their bases and have to withdraw from Iraq," said Maliki.

U.S. officials do not dispute that the absence of an agreement would probably require an immediate end to combat operations and, at a minimum, confinement to bases on Jan. 1. Officials refused to discuss the sensitive issue on the record while negotiations are ongoing.

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Global Warming Efforts Chilled By Economic Woes
2008-10-13 21:57:23
The economic free fall gripping the U.S. may bring down one of the main environmental objectives: capping the greenhouse gases that are blamed for global warming.

Democratic leaders in the House and the Senate, and both presidential candidates, continue to rank tackling global warming as a chief goal next year, but the focus on stabilizing the economy probably will make it more difficult to pass a law to reduce carbon dioxide and other greenhouse gases. At the very least, it will push back when the reductions would have to start.

As one Republican senator put it, the green bubble has burst.

"Clearly it is somewhere down the totem pole given the economic realities we are facing," said Tom Williams, a spokesman for Duke Energy Corp., an electricity producer that has supported federal mandates on greenhouse gases. Duke is a member of the U.S. Climate Action Partnership, an association of businesses and nonprofit groups that has lobbied Congress to act.

Just months ago, chances for legislation passing in the next Congress and becoming law looked promising. The presidential candidates support mandatory cuts and a Democratic majority is ready to act on the problem after years of the Bush administration's resisting federal controls.

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Commentary: 'State Intervention Is A Confession Of Failure'
2008-10-13 21:56:57
Intellpuke: This commentary was written by Christopher Glazek and appeared in Spiegel's column "The World From Berlin" on Monday, October 13, 2008.

Following Sunday's emergency meeting of European leaders in Paris, Germany announced a 500 billion euro financial sector rescue plan. German commentators are split in their response to the latest move.

European leaders met for an emergency summit in Paris on Sunday to discuss a coordinated approach for addressing the financial crisis in the euro zone countries where Europe's common currency is used. At the summit, convened by French President Nicolas Sarkozy, European leaders pledged to broadly pursue a bailout policy based on the direct infusion of capital into ailing banks. In accordance with the principles agreed upon at the emergency summit, German Chancellor Angela Merkel on Monday unveiled plans for a €500 billion ($679 billion) rescue fund to help shore up the German banking system.

Markets rallied on the news, with the German DAX posting strong gains in trading after the market opening and rising by 8.01 percent by Monday afternoon. This is the first time European leaders have come together to articulate a shared strategy for dealing with the crisis.

German commentators have responded to the emergency summit with a mixture of praise and criticism. Some laud European governments for finally coming up with a coordinated response, warning that state intervention may be the only way to stop the crisis, while others argue that though inevitable, the move is tantamount to admitting failure.

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Dow Snaps 8-Day Losing Streak
2008-10-13 17:41:45

Wall Street, taking note of U.S. and world regulators' efforts to combat the financial crisis, rebounded today from last week's debacle with a massive rally that propelled the Dow Jones industrial average to its largest daily point gain ever and the largest percentage increase since the depths of the Depression.

After posting their worst week in history, the Dow Jones industrial average and the Standard & Poor's 500-stock index both posted big gains today. The Dow closed up 11 percent, or 936 points. It was the Dow's largest single-day point gain, far surpassing the jump of 499 points on March 16, 2000.

Only four other days - all during the late 1920s and early 1030s - have seen larger percentage gains for the Dow.

The S&P was up 11.6 percent, or 104 points, in its best one-day gain since 1939. The tech-heavy Nasdaq was up 11.8 percent, or 195 points.

Stocks snapped an eight-day losing streak fueled by deepening concerns of a global recession. The Dow and S&P both lost 18 percent of their value last week, the worst week in Wall Street history.

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Poll: Barack Obama Leads By 10 Points As McCain's Favorable Ratings Fall
2008-10-13 17:41:25

With just over three weeks until Election Day, the two presidential nominees appear to be on opposite trajectories, with Sen. Barack Obama gaining momentum and Sen. John McCain stalled or losing ground on a range of issues and personal traits, according to a new Washington Post-ABC News poll.

Overall, Obama is leading 53 percent to 43 percent among likely voters, and for the first time in the general-election campaign, voters gave the Democrat a clear edge on tax policy and providing strong leadership.

McCain has made little headway in his attempts to convince voters that Obama is too "risky" or too "liberal." Rather, recent strategic shifts may have hurt the Republican nominee, who now has higher negative ratings than his rival and is seen as mostly attacking his opponent rather than addressing the issues that voters care about. Even McCain's supporters are now less enthusiastic about his candidacy, returning to levels not seen since before the Republican National Convention.

Conversely, Obama's pitch to the middle class on taxes is beginning to sink in; nearly as many said they think their taxes would go up under a McCain administration as under an Obama presidency, and more see their burdens easing with the Democrat in the White House.

The poll was conducted after Tuesday night's debate, which most voters said did not sway their opinions much. Still, voters' impressions of Obama are up, and views of McCain have slipped.

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Stock Prices Rise As Governments Pledge Bank Aid
2008-10-13 14:30:42
Stock prices surged Monday morning amid hope that aggressive new steps by central banks around the world would prop up the global banking system and thaw out troubled credit markets.

After suffering the worst weekly loss in its 112-year history last week, the Dow Jones industrial average leaped more than 500 points on the expectation that the U.S. government will follow some of its European counterparts in taking direct equity stakes in battered financial institutions.

As of 9:20 a.m. PDT, the Dow was up 545.75 points, or 6.46%, at 8,996.94.

The Dow and other major indexes were up more than 6%.

The market has been overdue for a rebound after brutal two weeks, including eight consecutive losing days that dragged the Dow down almost 2,400 points.

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Europe Pledge Billions For Banks
2008-10-13 14:30:21
After a weekend of crisis talks on both sides of the Atlantic, European nations and the United States unveiled on Monday a staggering and coordinated series of multibillion-dollar rescue packages to shore up teetering banks and guarantee credit to free up lending between them.

While the broad outlines of some of the deals represented a concerted response to plummeting stock markets and frozen credit markets, the leading European economies also embraced some individual steps, underlining the differences of approach they have sought to bury in the face of the worst financial crisis of the post-war era.

On Sunday, European leaders agreed to act at a national level from what officials called a “toolbox” of measures fitting their individual requirements.

“The time of everyone moving alone is over,” French President Nicolas Sarkozy told a news conference in Paris.

The sweeping measures began early Monday as Britain pledged to spend billions in taxpayer money to shore up battered banks. The British treasury said the initial steps could be worth $64 billion to three banks. In effect, the moves mean the partial nationalization of those institutions - the Royal Bank of Scotland, HBOS and Lloyds TSB.

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Milan Kundera Denies Claims He Informed On Spy
2008-10-13 14:29:52
A document written by the Czech Communist police claims that author Milan Kundera informed on a purported Western spy in the 1950s, a state-sponsored institute said Monday. Kundera quickly denied the claims.

The Institute for the Study of Totalitarian Regimes said a team of historians and researchers found a document written by the SNB, or Czech Communist police, that identified Kundera as the person who informed on a man who was later imprisoned for 14 years.

The usually reclusive Kundera, author of ''The Unbearable Lightness of Being,'' rushed to reject the charge.

''I am totally astonished by something that I did not expect, about which I knew nothing only yesterday, and that did not happen. I did not know the man at all,'' Kundera was quoted as saying by the CTK news agency.

Kundera accused the institute and the media of ''the assassination of an author.''

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Paul Krugman Wins Nobel Prize For Economics
2008-10-13 14:28:52

Paul Krugman, a professor at Princeton University and an Op-Ed page columnist for the New York Times, was awarded the Nobel Memorial Prize in Economic Sciences on Monday.

“It’s been an extremely weird day, but weird in a positive way,” Krugman said in an interview on his way to a Washington, D.C., meeting for the Group of 30, an international body from the public and private sectors that discusses international economics. He said he was mostly “preoccupied with the hassles” of trying to make all his scheduled meetings on Monday and answer a constantly ringing cellphone.

Krugman received the award for his work on international trade and economic geography. In particular, the prize committee lauded his work for “having shown the effects of economies of scale on trade patterns and on the location of economic activity.”

He has developed models that explain observed patterns of trade between countries, as well as what goods are produced where and why. Traditional trade theory assumes that countries are different and will exchange different kinds of goods; Krugman’s theories have explained why worldwide trade is dominated by a few countries that are similar to each other, and why some countries might import the same kinds of goods that it exports.

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