Free Internet Press Newsletter - Wednesday October 29 2008 - (813)

Wednesday October 29 2008 edition
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Bargains Spark Late Rally On Wall Street 2008-10-28 17:18:05 Investors shrugged off downbeat reports on home prices and consumer confidence to fuel a late session rally that was poised to push the Dow Jones industrial average to its biggest one-day gain in more than two weeks. As of 11:50 a.m. PDT, the Dow was up 424.12 points, or 5%, at 8,599.89. The broader Standard & Poor's 500 index was up 5% and the tech-laden Nasdaq composite was up 4.3%. If it holds to those gains, it would be the Dow's biggest advance since it jumped 936 points on Oct. 13. A report showing a steep plunge in consumer confidence threw Wall Street into reverse earlier in the morning, erasing much of an early 300-point rally in the Dow. But investors apparently decided to go bargain-hunting after a two-day stretch that saw the Dow fall 500 points. The Conference Board, a private research group, said its gauge of consumer sentiment fell to 38 in October. That was well below analysts' expectations and down from a revised 61.4 in September. It was the lowest reading since the group began tracking consumer sentiment in 1967 and is a bad omen for consumer spending, which makes up about two-thirds of U.S. economic activity. It also reinforced worries that the nation is sliding into a potentially lengthy recession. Investors were also reacting to a steep drop in the Standard & Poor's/Case-Shiller index of housing prices, which dropped 16.6% in August compared with a year earlier. Disarray in the U.S. housing market has been a major driver of the current global credit crisis. Read The Full Story New York Governor Warns Of Big Deficit, 'Painful Cuts' 2008-10-28 17:17:45 New York Gov. David A. Paterson said Tuesday that the state’s financial health has worsened considerably in recent weeks, swelling next year’s projected budget deficit to the largest ever forecast. In a speech from the governor’s office in Manhattan, Paterson said that New York State's budget division now expects the budget gap for next year to be $12.5 billion - nearly double what it projected a few months ago, and that the deficit for this year’s budget has reached $1.5 billion. But Paterson pointedly declined to say how he would address the mounting problems, saying he preferred to wait until legislators make their own proposals at a special session next month. “I don’t want to get ahead of them and start marking out specific areas,” he said after the address. The forecast Paterson laid out through 2012 was even more grim. According to the state’s estimates, the budget deficit would expand to $15.8 billion for the fiscal year starting in 2010 and $17.2 billion in 2011 - for a total of $47 billion of projected shortfalls including next year’s gap. Read The Full Story Should Republicans Cut McCain Loose To Mitigate Their Losses? 2008-10-28 17:17:18 With each passing day the political outlook seems to worsen for Republicans. Barack Obama appears to be consolidating his electoral college edge over John McCain while Republicans are playing defense in the Senate and the House. Neutral observers are now predicting Republican losses of eight or more seats in the Senate and 20-plus seats in the House. Faced with such a dire landscape, David Frum, a former speechwriter for President Bush and now a resident fellow at the American Enterprise Institute, penned an op-ed in the Washington Post's Outlook section on Sunday that made the case that the party must throw McCain over the side to save itself. Writes Frum: "In these last days before the vote, Republicans need to face some strategic realities. Our resources are limited, and our message is failing. We cannot fight on all fronts. We are cannibalizing races that we must win and probably can win in order to help a national campaign that is almost certainly lost. In these final 10 days, our goal should be: senators first." Read The Full Story Day Of Reckoning Dawns For Denizens Of Hedge-Fund Heaven 2008-10-28 17:16:38 Greenwich, Connecticut. It isn't easy to get the super-rich to discuss their money woes, and the Rev. Chuck Davis, who runs the Stanwich Church here in the hedge-fund capital of the world, has tried. His flock includes the mandarins of finance who've lost fortunes in the stock market debacle. In a recent sermon, he urged parishioners to simply admit that they're enduring a terrible ordeal. "C'mon, let's us talk about it, right now," he said from the pulpit. "There's fear. I've never seen this kind of fear in people. There's concern. Our world has been rocked in some ways. I think we've come to realize that we've lived an illusion for a little while, haven't we?" This isn't an "Amen!" kind of place, but listeners were rapt. "And we've been shocked," he continued, "even though it was an illusion and it wasn't a reality, coming back to reality, we still want to know that God's in the midst of it. Because darkness would seem to drown out our hope and sense of well-being." Uplifting words, and delivered to a group that you have to assume could use a hug. But if there is darkness here in Greenwich, it's not visible, at least not yet. The impeccably kept home to scores of suddenly unemployed and just barely employed investment bankers, Greenwich is the most famous of the money towns of Fairfield County - along with Darien, New Canaan and others - where some 28,000 millionaires resided the last time anyone counted. The area has just suffered its version of a Category 5 hurricane. If there was a FEMA for portfolio devastation, Greenwich would be swarming with feds. Read The Full Story Christian Science Monitor To End Daily Publication 2008-10-28 17:15:50 The Christian Science Monitor said Tuesday it will become the first national newspaper to drop its daily print edition and focus on publishing online, succumbing to the financial pressure squeezing its industry harder than ever. Come April, the Boston, Massachusetts-based general-interest paper - founded in 1908 and the winner of seven Pulitzer Prizes - will print only a weekend edition after struggling financially for decades, its editor announced Tuesday. The Monitor's circulation has fallen from a peak of 230,000 in 1970 to about 50,000 now, while its online traffic has soared. The newspaper gets about 5 million page-views per month, compared with about 4 million five years ago and 1 million a decade ago. The Monitor was one of the first newspapers in the country to put content online, beginning in 1995, when correspondent David Rohde was taken prisoner in Bosnia. "Obviously, this is going to help with our costs, but it also enables us to put much more emphasis on the Web and basically put our reporting assets and our editorial assets where we think growth will be in a very tough industry in the future, which we think is the Web," said Editor John Yemma, who was the Boston Globe's multimedia editor before he moved to the Monitor in June. Read The Full Story U.S. Treasury Dept. To Use Bailout Money For Auto Industry 2008-10-28 03:23:36 The Bush administration is in negotiations to broaden its $700 billion financial rescue plan to include U.S. auto companies, potentially opening the door to an array of industries to seek federal aid. Detroit's Big Three are eligible for aid under a broad interpretation of the law that authorized the $700 billion financial rescue, Treasury Department officials said Monday, but they declined to discuss the details of any assistance. "The law grants the secretary broad authority to purchase troubled assets that he deems important to improving financial stability," said Treasury spokeswoman Jennifer Zuccarelli. Ford and General Motors are eligible because they are both chartered as thrift holding companies, so they can establish banks to make car loans nationwide. Other businesses, such as General Electric, Nordstrom, John Deere and Macy's, are chartered in the same way to issue credit cards or make loans to their customers. Chrysler would also be eligible, said Treasury officials. Helping such businesses could put the Treasury in the tricky situation of picking winners and losers within the economy, a far cry from restoring the free flow of credit in the financial system, which was the original intention of the rescue package, some analysts said. It could lead to a long line of companies heading to the Treasury for aid, especially if the holiday shopping season is as disastrous as retailers are forecasting. Read The Full Story Syria Vows To Defend Territory Against Attack 2008-10-28 03:22:58 Syria Monday condemned the U.S. for launching "criminal and terrorist aggression" on its soil, while the Iraqi government defended action against foreign jihadis amid warnings it might complicate plans for a controversial security agreement between Baghdad and Washington. Walid al-Muallem, Syria's foreign minister, used a visit to London to lambast the U.S. for its "cowboy politics" and hinted that Sunday's raid was designed to halt Syria's gradually improving relations with the European Union and Britain. Iran and Russia also condemned the U.S. for aggravating tensions in the region. Syria reported that U.S. troops, backed by helicopters, launched the attack five miles into its territory, killing eight people, including four children. At the funerals of the victims, where angry crowds chanted anti-American slogans, an Associated Press photographer said he saw the bodies of seven men. Read The Full Story	U.S. Consumer Confidence Plunges To Record Low 2008-10-28 17:17:56 Layoffs, plunging home prices and tumbling investments have pushed consumer pessimism to record levels in October, a private research group said today. Wall Street shook it off, though, focusing instead on higher global markets amid optimism the Federal Reserve will ease interest rates further. The Conference Board said the consumer confidence index fell to 38, down from a revised 61.4 in September and significantly below analysts' expectations of 52. That's the lowest level for the index since the Conference Board began tracking consumer sentiment in 1967, and the third-steepest drop. A year ago, the index stood at 95.2. Wall Street, which has come to expect bad news on the economy, took the report in stride. The Dow gave up some of its early gains but was still up about 2 percent in midday trading, while the broader S&P 500 index rose 1.7 percent. Investors are expecting the Federal Reserve to cut its target interest rate Wednesday by up to one-half a percentage point to 1 percent after its two-day meeting that began Tuesday. Read The Full Story FBI Breaks Up A Dozen Juvenile Sex Rings 2008-10-28 17:17:34 Federal authorities rescued 47 juveniles and arrested scores of pimps as part of a wide-scale effort to crack down on child prostitution and sex trafficking rings in the U.S. The sweep across more than two dozen cities over the weekend marks the latest in a series of efforts by the FBI and Justice Department,working in concert with state and local police departments in task forces dubbed "Innocence Lost". Ten of the children taken into protective custody appeared on a registry operated by the National Center for Missing and Exploited Children, including youths from Texas, Ohio, Michigan and California, FBI Deputy Director John S. Pistole said at a news conference Monday. Using tips and informants, agents patrolled truck stops, Web sites and streets of such local cities as Alexandria, Virginia, Baltimore and College Park, Maryland. In one operation in Prince William County, FBI investigators worked with county police to draw customers to hotels, said Melissa S. Morrow, the supervisory special agent in the child exploitation squad at the bureau's Washington field office. In all, investigators dismantled a dozen organized prostitution rings nationwide and seized firearms, vehicles and drugs as part of the raids. Seventy-three pimps and more than 500 other adults were arrested. Read The Full Story Political Blog: McCain Calls For Sen. Stevens To Quite, Palin Doesn't Go That Far 2008-10-28 17:17:06 Intellpuke: The following political blog was written by Don Frederick and appeared in the Los Angeles Times edition for Tuesday, October 28, 2008. Sens. Ted Stevens and John McCain caucused together as Republicans, but as lawmakers they marched to very different beats. Stevens specialized in funneling every federal dollar he could find to his home state of Alaska (most notoriously the "bridge to nowhere"); McCain, of course, battled "pork-barrel spending" whenever and wherever. So it's no surprise that following Stevens' conviction Monday on corruption-related charges, McCain would call for his colleague to resign his office. What's intriguing is that Sarah Palin, who as governor of Alaska could be part of a potentially tangled scenario involving Stevens, issued a more cautious comment. McCain, in a statement Tuesday, called the verdict against Stevens "a sign of the health of our democracy that the people continue to hold their representatives to account for improper or illegal conduct." He added: "It is clear that Senator Stevens has broken his trust with the people and that he should now step down. I hope that my colleagues in the Senate will be spurred by these events to redouble their efforts to end this kind of corruption once and for all." Read The Full Story Retaliating For U.S. Raid, Syria Orders American School Closed 2008-10-28 17:16:06 The Syrian cabinet decided on Tuesday to close the American School and an American cultural center in Damascus, the capital, after a raid into Syria on Sunday by United States Special Operations forces, the official SANA news agency said. The decision was the first retaliation against the United States by Syria, which has accused it of “terrorist aggression” in the raid. Syria said eight civilians were killed in the attack. But American officials said the raid by American helicopter-borne forces killed an Iraqi militant responsible for running weapons, money and foreign fighters across the border into Iraq, and that all the people killed in the assault were militants. A senior American official said and that women and children living with the militants had not been harmed. The strike into Syria was by far the boldest by American commandos in the five years since the United States invaded Iraq and began to condemn Syria’s role in stoking the Iraqi insurgency. Read The Full Story Central Banks Slashing Rates As Investors Flee 2008-10-28 03:23:47 Central banks around the world are moving to further slash interest rates as they seek to contain the damage from the bursting of the biggest credit bubble in history. The Federal Reserve is poised to cut its benchmark rate for the second time in two weeks at a pivotal meeting in Washington, D.C., on Wednesday, and the European Central Bank Monday suggested that it would do the same next week. South Korea announced a dramatic rate cut Monday, by three-fourths of a percentage point. Governments worldwide have already approved massive bailouts and stimulus packages to halt financial meltdowns, but the trouble spots in the United States and abroad continue to multiply. Monday, there were growing signs that the U.S. Treasury Department was close to extending its $700 billion rescue program to cover the ailing auto industry. Analysts said governments are trying to manage what has become the biggest threat to the global financial system - a massive pullout by panicked investors from any holding they see as remotely risky. From consumers to multibillion-dollar hedge funds, investors are cashing out to cover losses or guard against further damage by moving into safe havens such as U.S. Treasurys. Rate cuts, however, are not packing their usual punch. Normally, when central banks cut rates, it becomes cheaper for businesses and consumers to borrow money. Now, with banks and other financial institutions experiencing a severe crisis, lenders have been reluctant to extend credit at any price. Read The Full Story In U.S., Foreclosures Open Door To Disorder 2008-10-28 03:23:16 Among the many harsh lessons for mortgage lenders in the housing bust is this one about evictions: Selling a house is far easier than taking it back. Clever opportunists and struggling families have figured this out, too, and the result is a rapidly evolving free-for-all coursing through the Washington, D.C., region's worst foreclosure-racked suburbs. Defaulting homeowners are taking advantage of banking chaos to live mortgage-free for six months or longer, dragging out the eviction process, according to lenders and real estate agents. Unscrupulous landlords are collecting rent but withholding mortgage payments, leaving a rude surprise for their tenants when repossession comes. And banks are so eager to avoid the hassle of eviction that they are paying occupants $5,000 or more simply to hand over the keys and move out without a fight. Then there are the illegal squatters, appliance thieves and miscellaneous animals - wild and domestic - that abound amid the disorder. Someone has to sort out the mess, and that's where people such as John Zampino, a deputy with the Prince William County Sheriff's Office, come in. Zampino is one of hundreds of deputies across the region who increasingly function as the armed couriers of the real estate meltdown, delivering court documents, serving repossession orders and, when necessary, carrying out evictions. He estimates that he has conducted more than 100 evictions this year, up from two in 2006. "We're never happy about kicking people out of their homes," said Zampino, 36. Read The Full Story
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