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Thursday, November 27, 2008

Free Internet Press Newsletter - Thursday November 27 2008 - (813)

Thursday November 27 2008 edition
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U.S. Stock Markets Rise, Dow Up 247 Points
2008-11-26 19:17:20
Stocks gained for the fourth straight day as optimism about the Obama administration's handling of the economy outweighed a flurry of discouraging economic data.

Investors began to unwind defensive bets in drug makers and consumer staples stocks, and moved back into shares of home builders, automakers and other companies that had been badly beaten down in recent months.

The Dow Jones industrial average jumped 2.9 percent, or 247 points, to 8727, as the blue-chip index pared losses from early in the session and closed above 8500 for the first time in almost two weeks.

The broader Standard & Poor's 500-stock index rose 3.5 percent, or 30 points, to 888, while the technology-heavy Nasdaq rallied 4.6 percent, or 67 points, to 1532.

The last time stocks rose four days in a row was in April.

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Federal Judge Sets Hearing Into Letter By Witness In Sen. Stevens' Trial
2008-11-26 19:16:47

A federal judge Tuesday scheduled "a brief hearing" into a witness's allegations that he received extensive help from prosecutors and lied on the stand about an immunity deal in the corruption trial of Sen. Ted Stevens (R-Alaska) last month.

U.S. District Judge Emmet G. Sullivan scheduled the hearing for Monday to consider a defense request to question the witness, David Anderson,and others who might know about the allegations.

In court documents filed last week, Stevens' attorneys accused prosecutors of "suborning perjury and making intentionally false statements" tied to Anderson's testimony.

Stevens was convicted last month of seven felony counts of lying on financial disclosure forms to hide about $250,000 in gifts and free renovations to his house in Girdwood, Alaska. He accepted much of the largess from the oil services firm Veco and its top executive, Bill Allen, say prosecutors say.

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As Mortgages Went Bad, Executives Cashed Out
2008-11-26 15:21:18
The subprime lending industry was starting to buckle under the weight of bad loans in November 2006, when executives at Irvine-based New Century Financial Corp. held a conference call to release their latest earnings.

Loan volume was down and defaults were up, the earnings report showed, and in recent weeks at least five stock analysts had downgraded the company's shares. Moreover, four executives had sold nearly $20 million in stock in the last four months, six times as much as they had sold over the previous 12 months.

That led one analyst to ask whether there was anything investors should know.

"It's just part of their personal financial diversification plan," Chief Executive Brad A. Morrice said in response to the question during the Nov. 2 earnings call.

Those executive stock sales, however, have emerged as a central element in the Justice Department's criminal investigation of New Century, according to a person familiar with the inquiry who was not authorized to speak publicly.

No charges have been filed, and attorneys for the company's former top executives say that none of the executives sold stock based on information that had not been disclosed to the public and that the executives retained most of their shares when the company went under.
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FDA Finds Traces Of Melamine In Infant Formula Sold In U.S.
2008-11-26 15:20:50
Traces of the industrial chemical melamine have been detected in samples of top-selling U.S. infant formula, but federal regulators insist the products are safe.

The U.S. Food and Drug Administration (FDA) said last month it was unable to identify any melamine exposure level as safe for infants, but a top official said it would be a "dangerous overreaction" for parents to stop feeding infant formula to babies who depend on it.

"The levels that we are detecting are extremely low," said Dr. Stephen Sundlof, director of the FDA's Center for Food Safety and Applied Nutrition. "They should not be changing the diet. If they've been feeding a particular product, they should continue to feed that product. That's in the best interest of the baby."

Melamine is the chemical found in Chinese infant formula - in far larger concentrations - that has been blamed for killing at least three babies and making at least 50,000 others ill.

Previously undisclosed tests, obtained by the Associated Press under the Freedom of Information Act, show that the FDA has detected melamine in a sample of one popular formula and the presence of cyanuric acid, a chemical relative of melamine, in the formula of a second manufacturer.

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China, Europe Plan New Steps To Help Economy
2008-11-26 15:20:14

Responding to rapidly deteriorating economic conditions, officials on two continents announced major steps on Wednesday to try to pump some life back into their economies. The European Commission proposed a sweeping stimulus-spending package totaling 200 billion euros, or $256 billion, while officials in China cut interest rates there by more than a percentage point.

The plan in Europe, which is likely to have the more immediate impact, will be critical to bolstering growth and employment in the European Union's 27 member countries, said officials with the commission, which is the Union’s executive arm. On Tuesday, the Organization for Economic Cooperation and Development predicted that the 15 economies that have adopted the euro as their currency would contract next year by 0.6 percent overall, and economists have begun speaking of 2009 as a “lost year.”

Officials in China are also worried about a slowdown. The central bank’s decision to cut benchmark rates by 1.08 percentage points on Wednesday represents its largest rate reduction since the Asian financial crisis of a decade ago. It came just one day after a violent protest near Hong Kong in which hundreds of jobless workers attacked police vehicles, and five days after top Chinese officials warned in Beijing that the economy was still deteriorating and that dissent and threats to social stability would be crushed.

In recent years, the Chinese Communist Party has based its claim to legitimacy to a considerable extent on its ability to deliver strong economic growth. The party has watched with alarm as growth has slowed sharply, mainly because of a deceleration in exports and a downturn in the real estate market. The actions in Europe and Asia on Wednesday were fresh evidence of the deepening global crisis, and a sign that the governments are trying to stem the bleeding as swiftly as possible.

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UPDATE: Coordinated Attacks In India Kill At Least 80 People, 200 Injured
2008-11-26 19:17:12
Gunmen appear to target foreigners in assaults on seven sites.

At least 80 people were killed and more than 200 injured Wednesday night in seven synchronized attacks in Mumbai, India's commercial capital, said police.

A senior police official in the city said gunmen were holding hostages at two luxury hotels.

Television news footage later showed flames shooting out of the top floor of the renowned Taj Mahal Palace and Tower Hotel and black smoke billowing up from near the structure's distinctive central dome after what was described as a massive explosion.

The shootings and explosions took place in the heart of the city's affluent southern section. At least two of the attacks targeted five-star hotels.

Three top police officers, including the chief of Mumbai's anti-terrorist squad, Hemant Karkare, died in operations at the hotels.

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Obama Names Paul Volcker To Lead Economic Advisory Board
2008-11-26 15:21:28
President-elect Barack Obama today announced the creation of an advisory team aimed at providing him with outside guidance on revitalizing the nation's troubled economy and calming its financial markets, headed by former Federal Reserve Chairman Paul Volcker.

Obama also defended his reliance on members of the former Clinton White House as appointees in his administration, despite a campaign theme of bringing change to Washington.

Obama's comments came during his third news conference in three days regarding economic appointments to his upcoming administration - a highly visible signal that the president-elect wants to show he is taking aggressive steps to deal with the nation's financial crisis in the weeks before he takes office.

He said his focus on economic issues not only reflects the turbulent financial times, but also a frustration in Washington's failure to address the nation's long-term problems.

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Officials Warn Of Terror Plotting Against New York City Subway System
2008-11-26 15:21:05
Federal authorities are warning law enforcement personnel of a possible terror plot against the New York City subway and train systems during the holiday season, and police are beefing up security in preparation.

An internal memo obtained by the Associated Press says the FBI has received a "plausible but unsubstantiated" report that al-Qaeda terrorists in late September may have discussed attacking the subway system.

A person briefed on the matter, speaking on condition of anonymity because of the sensitivity of the intelligence-gathering work, said the threat may also be directed at the passenger rail lines running through New York, such as Amtrak and the Long Island Rail Road, which are particularly busy with Thanksgiving holiday travelers.

A U.S. counterterror official, also speaking on condition of anonymity, said senior government officials have been briefed because the FBI very recently received credible information about possible attacks over the holiday season, and authorities are particularly concerned about this long holiday weekend.

FBI spokesman Richard Kolko confirmed only that his agency and the Homeland Security Department issued a bulletin Tuesday night to state and local authorities, and the information is being reviewed.

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Data Show Battered U.S. Economy
2008-11-26 15:20:38

Household spending and investment in big-ticket items plummeted in October in the United States, as major world economies announced new plans to try to boost demand to fight a deepening economic downturn.

New U.S. data showed a continuing decline in both consumer and business spending - the dynamic that prompted the Federal Reserve and Treasury to announce on Tuesday an $800 billion plan to lower home loan mortgage rates and ensure households and small businesses have access to adequate credit. The European Commission today proposed its own $260 billion plan to rekindle growth, while China slashed a benchmark interest rate by the most since the Asian financial crisis in the 1990s.

In the United States, the Commerce Department said that orders for durable goods fell a quicker-than-expected 6.2 percent in October. Excluding volatile aircraft and defense purchases, capital investment by business was down 4 percent compared with the month before. Over the past three months, capital investment has fallen at a nearly 33 percent annualized rate, according to an analysis by the High Frequency Economics consulting firm - a figure the company's chief U.S. economist, Ian Shepherdson, termed "terrifying."

Personal spending, meanwhile, dropped 1 percent in October compared with the month before - the steepest one month decline since the Sept. 2001 terrorist attacks. A drop in the rate of inflation, helped by falling energy prices, put more money in people's pockets: Real disposable personal income, the amount of earnings left after taxes and adjusted for inflation, increased by 1 percent in October.

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Coordinated Attacks Kill At Least 16 People In Mumbai, India
2008-11-26 15:19:56
At least 16 people were killed and 50 were injured in seven synchronized attacks in Mumbai, India's commercial capital, late Wednesday night, said police.

The shootings and explosions took place in the heart of the city's affluent southern section, with at least two of the incidents occurring near five-star hotels. There were also reports of two explosions.

About 10:30 p.m., witnesses told reporters, two men fired automatic weapons outside the Cafe Leopold restaurant, which is popular with foreigners, then moved toward the five-star Taj Majal hotel while continuing to fire indiscriminately. The gunmen also reached the city's main Chhatrapati Shivaji Terminus station and a hospital.

Witnesses said the gunmen initially asked for British and American nationals. About 10 Americans and Britons were believed to be trapped in the hotel late Wednesday.

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