Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Mon 10.27.2008
Economic Basics and Today’s Gold Market A viewer was good enough to write and ask me about my claim that there either has to be currency appreciation or depreciation (deflation or inflation in today’s lingo). Can’t we have something like an inflationary depression? That indeed was what several of the people he regards as authorities are predicting. That is a good question because it leads to some very definite conclusions about whether to buy or to sell here in late October 2008. But first, let us step back and establish some basic ground rules.
Gold Drops as Stock Plunge Prompts Investors to Switch to Cash Gold fell in Asia as investors sold the precious metal for cash after equities extended a slump on concern the global economic slowdown is deepening and government measures won't be enough to stimulate growth. Asia's benchmark MSCI Asia Pacific Index fell for a fourth day, by as much as 6.2 percent, even after the Bank of Korea cut borrowing costs by an unprecedented 75 basis points and Japan said it will compile a package of measures to support the country's stock market.
Jim Rogers says gold is still in a bull market - he's BUYING and that people are turning this crisis into a depression because they won't let anyone fail.
Nouriel Roubini: I fear the worst is yet to come When this man predicted a global financial crisis more than a year ago, people laughed. Not any more... As stock markets headed off a cliff again last week, closely followed by currencies, and as meltdown threatened entire countries such as Hungary and Iceland, one voice was in demand above all others to steer us through the gloom: that of Dr Doom. For years Dr Doom toiled in relative obscurity as a New York University economics professor under his alias, Nouriel Roubini. But after making a series of uncannily accurate predictions about the global meltdown, Roubini has become the prophet of his age, jetting around the world dispensing his advice and latest prognostications to politicians and businessmen desperate to know what happens next – and for any answer to the crisis.
The Bet That Blew Up Wall Street Steve Kroft On Credit Default Swaps And Their Central Role In The Unfolding Economic Crisis The world's financial system teetered on the edge again last week, and anyone with more than a passing interest in their shrinking 401(k) knows it's because of a global credit crisis. It began with the collapse of the U.S. housing market and has been magnified worldwide by what Warren Buffet once called "financial weapons of mass destruction."
October Surprise: Preparing for Something Unexpected? At a news conference on October 22, 2008, U.S. Democratic presidential candidate Barak Obama was asked about a comment by his Vice Presidential running mate Joe Biden that Obama could expect to be tested within six months of the new presidential term by a "generated" international crisis that will force him to make unpopular decisions. Obama said the Delaware senator has occasionally engaged in "rhetorical flourishes," but the essential point was that the new President could expect to be challenged no matter who wins.
IMF's Unwelcome Return $$ Until recently, the International Monetary Fund looked analogous to postwar Britain, having lost a loan book but not yet found a role. Loans outstanding were $19 billion on July 31, against $105 billion five years ago. Falling interest income prompted cost cuts this year. Now the likes of Pakistan and Iceland need loans. Like many others, the IMF's fortunes have reversed as easy credit and commodity prices collapse. Until recently, many developing economies could either export surging commodities or borrow cheaply from private sources that rarely demanded austerity programs.
A New Bretton Woods to Restructure the International Financial System? The first thing to say about the calls for a “new Bretton Woods” is that they overreach, in the sense that it is very unlikely that any changes in the structure of the international monetary or financial system will or should, at this point in history, come out of multilateral discussions that are big enough to merit comparison with the first Bretton Woods. Certainly we are not talking about fixing exchange rates, as the 1944 meeting did.
Bretton Woods II Could Mark Shift Away From American Dominance You know that upcoming meeting of the G-7, dubbed "Bretton Woods II"? Well, it turns out it will actually involve some 20 countries and regions, including those with emerging markets. As US News and World Report puts it: "President Bush will meet not just with the traditional Group of Seven (G-7) cluster of industrialized countries but rather with the Group of 20. That larger forum brings in the major emerging-market nations. They include such rising powers and emerging economies as Brazil, India, China, Russia, South Africa, Mexico, and Turkey, among others."
A Study in Collapse The collapse of the capitalist world has begun, or so a Communist would explain. Karl Marx long ago anticipated a so-called "crisis of capitalism," when financial institutions would be convulsed and investors panicked. Such a situation would set the stage for a global Communist revolution. The working class would overthrow the bourgeoisie. The workers of the world would unite under Marxist leadership. The "dictatorship of the proletariat" would be born. Once Communism triumphed everywhere the state would wither away. Life would be better for nearly everyone (except the bourgeoisie). The means of production would be socially owned, instead of privately owned. The redistribution of wealth, the elimination of oppressive institutions and class distinctions would pave the way to a Golden Age. The ownership class would be exterminated or reeducated. Such is the revolution dreamt of by Marx and Engels, carried forward by Lenin and Stalin, and pushed today – amid the crash of 2008.
Uses for $700 billion bailout money are ever shifting First, the $700 billion rescue for the economy was about buying devalued mortgage-backed securities from tottering banks to unclog frozen credit markets. Then it was about using $250 billion of it to buy stakes in banks. The idea was that banks would use the money to start making loans again. But reports surfaced that bankers might instead use the money to buy other banks, pay dividends, give employees a raise and executives a bonus, or just sit on it. Insurance companies now want a piece; maybe automakers, too, even though Congress has approved $25 billion in low-interest loans for them.
Greenspan admits free market has foundered Whatever else you might say about the man, Alan Greenspan took his punishment like a grown-up. Appearing before the House Oversight Committee last week, the former Federal Reserve chairman acknowledged that the anti-regulatory, hyper-free-market ideology that had served him well for 40 years —- a philosophy that he literally learned at Ayn Rand’s knee —- had in some ways been wrong. And not just slightly wrong. The economic crisis has revealed a flaw, he said, "a flaw in the model that I perceived as the critical functioning structure that defines how the world works."
Socialism Takes Foothold after Train-wreck of Wall Street Capitalism The demonized word "socialism" has taken a foothold as the political dialogue increasingly centered on what the government could do to save the economy. It has been vigorously injected into political discussion in the United States since the 700 billion dollar bailout to overcome the train-wreck of Wall Street capitalism initiated by the US Treasury. Now it had taken a political turn as Barack Obama promised massive tax cuts to 95 percent of the people who are facing financial burden with a constrained economy.
The "dirty little secret" of the US bank bailout In an unusually frank article published in Saturday's New York Times, the newspaper's economic columnist, Joe Nocera, reveals what he calls "the dirty little secret of the banking industry"--namely, that "it has no intention of using the [government bailout] money to make new loans." As Nocera explains, the plan announced October 13 by Treasury Secretary Henry Paulson to hand over $250 billion in taxpayer money to the biggest banks, in exchange for non-voting stock, was never really intended to get them to resume lending to businesses and consumers--the ostensible purpose of the bailout. Its essential aim was to engineer a rapid consolidation of the American banking system by subsidizing a wave of takeovers of smaller financial firms by the most powerful banks.
U.S. Treasury to invest $395 million in Beverly Hills-based City National Bank. Treasury will invest $395 million in City National. CEO may use 'fortress balance sheet' to buy rivals. In a harbinger of what may be a flood of similar disclosures, City National Bank in Beverly Hills said Sunday that it would receive a $395-million capital infusion from the U.S. Treasury as part of the government's $250-billion bailout program. The bank said it had no "explicit or implicit understanding" with federal regulators about how it would use the money -- whether to increase lending in the community or acquire a specific bank.
Capitalism won’t die. It will only emerge stronger "We are suffering just now from a bad attack of pessimism. It is common to hear people say that the epoch of enormous economic progress . . . is over; that the rapid improvement in the standard of life is now going to slow down; that a decline in prosperity is more likely than an improvement in the decade ahead. I believe that this is a wildly mistaken interpretation of what is happening to us." So wrote John Maynard Keynes in 1928.
Treasury urged to aid car and insurance sectors The US Treasury is coming under increasing pressure to expand its financial rescue plan beyond banks to include direct assistance to the ailing car and insurance sectors. In recent days, lawmakers and interest groups have stepped up their efforts to persuade the administration of George W. Bush, US president, to divert part of the $700bn authorised by Congress to a range of companies that were not originally expected to be helped. The emergency legislation enacted this month gives the Treasury broad authority to buy any assets that are important for the stability of the US financial system.
How far should the U.S. 'bailouts' go? FORGET CONSERVATISM — President Bush is likely to go down in history using unprecedented government intervention in the economy. The question Americans must ask: Is that bad? Isn't that socialism? Or, rather, given the now-believed worldwide recession, how far should the United States go in emulating European countries in saving its economy? After promising Congress he wouldn't, Treasury Secretary Henry Paulson has reversed himself and followed Europe's lead in giving capital directly to U.S. banks.
Bailout a move for-socialized banking The financial institution ''bailout'' plan Congress approved earlier this month was controversial enough in the form presented to Americans. Lawmakers indicated that they would go along with a $700 billion program most people thought was intended to buy ''toxic mortgages'' from financial institutions. Another $150 billion in ''sweeteners,'' many of them involving outrageous pork barrel projects, was thrown into the package.
Look who pays for the bailout Meet the Henrys (high earners, not rich yet). They make $250,000-plus and get taxed to high heaven. And they're about to get socked again. Bill Kwon is the embodiment of the American dream. His father - who was arrested by North Korean Communists in the early 1950s for championing democracy - brought the family from Seoul to Illinois when he was a baby. Bill worked himself ragged pursuing every opportunity America's heartland offered, never leaving Peoria.
The man who predicted global markets meltdown Here’s a thought provoking article about an M.I.T.trained economist, Krishnamurthy Narayanan, whose GI Global Opportunities Fund has returned 57% in the past year and 19 per cent (compounded) over the past five years. For those of you who remain convinced of the long term invincibility of the U.S. dollar, he sounds a note of caution if not down right alarm. He also has some positive things to say about the Canadian dollar, gold, oil and uranium - hardly mainstream views these days. But his views were hardly mainstream a year ago when he warned about the financial crisis that is currently spreading like wildfire around the globe.
EXPLODING DEBT DYNAMICS Whither the dollar and gold? To answer that long-awaited inquiry – which will take some time to cover in full – let's start by getting a handle on "exploding debt dynamics." Cartoonish as it sounds, it’s a real term that IMF economists use. If, like me, the phrase gives you visions of Wile E. Coyote blowing himself up with a box of ACME brand dynamite, you aren't too far off. The technical meaning refers to the fallout from an ever-expanding debt-to-GDP ratio. Beyond a certain tipping point, a country’s debt burden becomes "explosive" as interest rates shoot higher, hope of payment recedes, and investors stampede for the exits.
Jim Willie - New world currency coming soon backed by gold!
Europe on the brink of currency crisis meltdown The crisis in Hungary recalls the heady days of the UK’s expulsion from the ERM. The financial crisis spreading like wildfire across the former Soviet bloc threatens to set off a second and more dangerous banking crisis in Western Europe, tipping the whole Continent into a fully-fledged economic slump. Currency pegs are being tested to destruction on the fringes of Europe’s monetary union in a traumatic upheaval that recalls the collapse of the Exchange Rate Mechanism in 1992. "This is the biggest currency crisis the world has ever seen," said Neil Mellor, a strategist at Bank of New York Mellon. Experts fear the mayhem may soon trigger a chain reaction within the eurozone itself. The risk is a surge in capital flight from Austria – the country, as it happens, that set off the global banking collapse of May 1931 when Credit-Anstalt went down – and from a string of Club Med countries that rely on foreign funding to cover huge current account deficits.
Germany takes hot seat as Europe falls into the abyss We face extreme danger. Unless there is immediate intervention on every front by all the major powers acting in concert, we risk a disintegration of global finance within days. Nobody will be spared, unless they own gold bars. Investors will learn today whether the Paulson bail-out - fattened to $850bn by Congress - can begin to halt the death spiral in the credit system. So far, the response looks terrible. Germany is now in the hot seat. The collapse of a rescue deal for Hypo Real Estate on Saturday threatens a €400bn (£311bn) bankruptcy that nearly matches the Lehman Brothers debacle for sheer scale.
In Beijing, World Leaders Pledge Broad Reform of Financial System Leaders from Asia and Europe on Saturday called for new rules for and stronger regulation of the global monetary and financial system at the close of a two-day summit in Beijing as China assumed a leadership role in the crisis. Chinese Premier Wen Jiabao said the world's economic problems had become so massive that measures beyond the many multibillion-dollar bailout packages announced might be necessary to avert further damage.
Asia and Europe call for joint action on markets Heads of state from across Asia and Europe called for a coordinated response to the global financial crisis in a two-day conference in Beijing, an event that underlined China's growing role as a diplomatic counterweight to the United States. But the leaders fell short of offering specific solutions to the current economic troubles, which have shown no signs of slowing.
'President Clinton’s actions are partly responsible for the crisis we face' It is frightening to see large chunks of one's wealth disappear overnight. I have lost, regained and re-lost sums of money that are, to me, very substantial. It is worrying, too, not to know just how bad it might get. I find myself looking at my house and thinking, "Gosh. I still have that. The house is still standing." Thank goodness the mortgage is covered by my holdings of cash and bonds. There are some people, of course, who face potential bankruptcy if they lose their jobs and thus their ability to pay their mortgages. All this has happened with amazing speed.
U.S. has plundered world wealth with dollar: China paper The United States has plundered global wealth by exploiting the dollar's dominance, and the world urgently needs other currencies to take its place, a leading Chinese state newspaper said on Friday. The front-page commentary in the overseas edition of the People's Daily said that Asian and European countries should banish the U.S. dollar from their direct trade relations for a start, relying only on their own currencies.
More weak data, hedge-fund selling seen this week Have stocks bottomed? It's possible, but economy, hedge-fund selling seen keeping things shaky In a typical recession, stocks start recovering about six months before the economy does. The crisis we're in right now, however, is anything but typical: Lending is frozen, hedge-fund selling is happening on a massive scale, and economic troubles have spread all over the globe.
World’s biggest hedge fund restructures amid turmoil The world’s biggest hedge fund is undertaking a radical restructuring amid a shake-up of the multi-trillion dollar industry which spells the end for thousands of its smaller rivals. Highbridge Capital Management, which is majority owned by JP Morgan Chase and has $25bn under management, is axing 10 per cent of its New York-based staff and plans cuts in Europe and Asia. The volatility in global stock markets has savaged the performance of some of the world’s best-known hedge funds, raising fears of a collapse in the sector, which could cause a fresh crisis in the financial system. Big names including Deephaven, Marshall Wace, Citadel Investment Corp, Lansdowne Partners, Third Point and Harbinger, have in recent weeks sustained losses of as much as 20 per cent in some funds.
Hedge Funds Slam 'Gates' on Their Edgy Investors $$ Some high-profile hedge-fund managers have restricted how much and when investors can withdraw their funds, as the industry struggles to stem a wave of redemptions and poor performance. The restrictions cover hedge-fund assets worth an estimated $21 billion. Centaurus Capital LP, and Polygon Investment Management Ltd. have put "gates" in place, limiting what proportion of assets investors can withdraw on one redemption date. Gottex Fund Management Holdings AG, Wermuth Asset Management GmbH, Auriel Funds PLC and Atlantis Investment Management Ltd. have suspended withdrawals in October until further notice. Atlantis said it did this to ensure all investors were treated fairly.
U.S. Dollar Currency Collapse Within 30 Days It appears that there is a common refrain going around the investment community. It goes something like this: "Gold should be doing better, and, since it isn’t, I am not going to buy it" Investors who believe this are making the mistake of thinking COMEX gold is the same as real physical gold. It is not. COMEX gold is a form of debt. It involves one party promising to produce gold (money) to another at a future date. Like all forms of debt, a COMEX futures contract is only as good as the counterparty behind the contract. Right now, because of low margin requirements, sellers of gold futures only have enough gold to cover 10% of outstanding contracts stored in COMEX warehouses.
Collapse of US Financial System: The Setting up of a “New Dollar”? In this 28th edition of the GEAB, LEAP/E2020 has decided to launch a new global systemic crisis alert. Indeed our researchers anticipate that, before next summer 2009, the US government will default and be prevented to pay back its creditors (holders of US Treasury Bonds, of Fanny May and Freddy Mac shares, etc.). Of course such a bankruptcy will provoke some very negative outcome for all USD-denominated asset holders. According to our team, the period that will then begin should be conducive to the setting up of a « new Dollar » to remedy the problem of default and of induced massive capital drain from the US.
Lindsey Williams - Dollar Collapse, Amero & hyperinflation August 11, 2007
With wreckage piling up, Fed eyes another rate cut With economic wreckage piling up, Fed weighs another hefty rate reduction As the economic wreckage piles dangerously higher, the Federal Reserve is prepared to ratchet down interest rates -- perhaps to their lowest point in more than four years -- with the hope of relieving some of the pain felt by many Americans.
The Whole System is Contracting Down for the Count "The great inter-war slumps were not acts of God or of blind forces. They were the sure and certain result of the concentration of too much economic power in the hands of too few men (who) felt no responsibility to the nation."From the 1945 UK Labour manifesto Let Us Face The Future There are signs that the credit crunch is easing. Interbank lending in dollars has fallen for a ninth straight day. The various indicators of stress in the market–Libor, the TED spread, and the Libor-OIS spread–are all gradually returning to normal, but the damage to the broader economy has been substantial.
Senator Warns of Revolution Senators don't normally use the word "Revolution". As a central part of the government, Senators do not normally wish to stir up any images of major challenges to power or of guillotines. . . . "If it turns out that they are hoarding, you’ll have a revolution on your hands. People will be so livid and furious that their tax money is going to line their pockets instead of doing the right thing. There will be hell to pay."
So When Will Banks Give Loans? "Chase recently received $25 billion in federal funding. What effect will that have on the business side and will it change our strategic lending policy?" It was Oct. 17, just four days after JPMorgan Chase’s chief executive, Jamie Dimon, agreed to take a $25 billion capital injection courtesy of the United States government, when a JPMorgan employee asked that question. It came toward the end of an employee-only conference call that had been largely devoted to meshing certain divisions of JPMorgan with its new acquisition, Washington Mutual. page 2 ... So When Will Banks Give Loans? .......Then, as Mr. Paulson divulged to The Times this week, it turns out that even before the bill passed the House, he told his staff to start drawing up a plan for capital injections. Fearing Congress’s reaction, he didn’t tell the Hill about his change of heart. Now, he’s shifted gears again, and is directing Treasury to use the money to force bank acquisitions. Sneaking in the tax break isn’t exactly confidence-inspiring, either. (And let’s not even get into the less-than-credible, after-the-fact rationalizations for letting Lehman default, which stands as the single worst mistake the government has made in the crisis.)
US public pension funds face big losses Public pension funds in US states are facing their worst year of losses in history, exacerbating existing funding shortfalls and putting pressure on state governments to shore them up. In the nine months to the end of September, the average state pension fund lost 14.8 per cent, according to Northern Trust, a fund company. The loss has grown since, as financial markets slumped further in October. The previous highest loss for state funds was 7.9 per cent for the full year in 2002. California’s Calpers, the US’s biggest pension fund, last week reported a loss of 20 per cent of its assets, or more than $40bn, between July 1 and October 20 this year.
Forecasters Race to Call the Bottom to the Market Financial forecasters are in a race to call the bottom to the bear market. And just as on the way up, when analysts competed for attention with their forecasts of bigger and bigger gains, the financial pundit class now seems compelled to out-gloom the next guy.
A growth industry: Tax collecting Several states are putting more money and personnel into cracking down on tax cheats -- large and small -- to cut into their growing budget deficits. The U.S. financial meltdown is creating brighter job prospects for at least one occupation: tax collector. Several states, including New York, Massachusetts, California and Illinois, are beefing up tax enforcement and collection efforts as they face widening budget deficits. "As their budgets quickly hit the skids and the pressure is on, they're going to be looking to see where those dollars are," said Verenda Smith of the Federation of Tax Administrators, an association of tax agencies from all 50 states.
Is Bankruptcy Your Personal Bailout? Bankruptices on the rise but the choice can have serious consequences With two million people losing their homes to foreclosure this year and unemployment at a five year high, personal bankruptcies are on the rise again as well, up more than 28% over last year. Expectations are that bankruptcies will top 1.1 million for the year. That's according to the American Bankruptcy Institute which reports American families are now going bankrupt at the rate of 22,000 a week, a figure that is trending upward as the nation falls deeper and deeper into a recession.
Bailout won't stop foreclosures - Fort Collins tenants be ready The government's bank bailout is not going to stop foreclosures. Could you come home from class one day to the surprise of all your possessions sitting on the curb? A lot would have to go wrong for this to happen in Colorado. As long as you read your mail, you should not be blind-sided by a foreclosure. Foreclosure is put into motion by a lender when a borrower has stopped paying on a loan. Here, the lender starts the process by sending a "notice to foreclose" to the Larimer County Public Trustee's Office. The Public Trustee sets the sale of the property 110 to 125 days later and mails a notice of the foreclosure and sale date to the occupants of the property.
Banks seize homes over credit card debt LONDON, Oct. 26 -- Banks and credit card companies in England are exploiting a legal loophole to seize homes of customers who cannot pay their credit card bills, experts say. People owing as little as $1,500 on such things as credit cards, car payments and personal loans have been served with charging orders, which enable a creditor to order the sale of a property, The Sunday Times of London reported. The newspaper said the controversial process emerged after Yvette Cooper, chief secretary to the Treasury, called on banks to do more to allow people to keep their homes.
Mortgage industry still mired in troubles Complex rise makes a fix hard Each day from July through September, more than 2,700 Americans lost their homes in foreclosure. That number, up from 1,200 a day a year ago, is a sign that the mortgage industry and government programs have done little to help troubled homeowners.
Spending Stalls and Businesses Slash U.S. Jobs As the financial crisis crimps demand for American goods and services, the workers who produce them are losing their jobs by the tens of thousands. Layoffs have arrived in force, like a wrenching second act in the unfolding crisis. In just the last two weeks, the list of companies announcing their intention to cut workers has read like a Who’s Who of corporate America: Merck, Yahoo, General Electric, Xerox, Pratt & Whitney, Goldman Sachs, Whirlpool, Bank of America, Alcoa, Coca-Cola, the Detroit automakers and nearly all the airlines.
Job Losses Buffet U.S. Early, Compounding the Downturn $$ Jim Vogel has been unemployed since May 2007, when he was laid off from FreightCar America Inc., a builder of rail cars in Johnstown, Pa. The 55-year-old machine operator has sent résumés to manufacturing companies and defense contractors but has gotten little response. Earlier this month, his unemployment benefits ran out. "Everything is tightening up," Mr. Vogel says of his job search. "I'm not even getting any rejection letters."
Secrets of the Bailout CNBC's Dylan Ratigan, host of 'Fast Money' and 'Closing Bell', tells TSC's Debra Borchardt why the lack of transparency in the bailout is a big problem.
Upside Down on Their Homes but on Top of Their Debts Think of them as the walking wounded. They are the homeowners who are upside down on their mortgages -- owing much more than their home is now worth. But they're still on their feet and still sending their payments each month. In this credit crisis, all the attention has been directed toward the critically injured, namely those owners who cannot afford their mortgages and are slipping toward foreclosure. The walking wounded don't rate life-support measures such as interest-rate reductions or a write-off of part of their debt. And we don't hear much about them.
A Hopeless Plan for Homeowners Debra Borchardt examines the latest plan from Fannie Mae designed to help struggling homeowners.
Bankruptcy Fears Rise as Chrysler, GM Seek Federal Aid $$ As talks between General Motors Corp. and long-time rival Chrysler LLC continued over the weekend, a harsh reality has emerged: Without a merger and possibly an assist from the federal government, two of Detroit's Big Three auto makers could run out of cash within a year.
General Motors, Driven to the Brink IN late May, senior executives at General Motors confronted a decision that few thought they would ever face: whether to continue developing the next generation of one of the most successful products in G.M.’s 100-year history — the full-size sport utility vehicle — or to punt the program entirely. It’s rare for an automaker to pull the plug on high-profile initiatives, much less one involving a $2 billion, top-to-bottom overhaul of a high-volume vehicle that once helped it rake in cash.
Scuttled Chrysler parts plant an emblem of uncertainty The construction crews have checked out of the Flamingo Motel, a $35-a-night motor lodge across the state road from a gleaming and still-unfinished auto parts plant that may never hire a single worker. "It's a big, sad story," said Kishor Patel, who owns the Flamingo and has watched guests slip away along with the town's dreams for a bonanza of 1,200 steady jobs making transmissions for Chrysler LLC.
Chrysler to Slash 25 Percent Of Its White-Collar Workers Chrysler told employees yesterday that it would be cutting 25 percent of its white-collar workforce by the end of the year to trim costs and warned of restructuring in the near future. The automaker, the smallest of Detroit's Big Three, will eliminate up to 5,000 employees. Next month, Chrysler will begin offering early retirements and buyouts to about 17,332 salaried employees and an undisclosed number of people who work for other companies under contract with the automaker. Without mentioning specifics, the company said it plans layoffs by the end of December.
Chrysler axes 5,000 white-collar jobs Detroit suffered a further blow yesterday with Chrysler announcing that it would slash one-quarter of its white-collar workforce, or almost 5,000 jobs, as merger talks with General Motors intensified. “These are truly unimaginable times for our industry”, Bob Nardelli, the carmaker’s chief executive, told employees in an e-mail. "Never before have auto industry sales contracted at such a fast rate."
Snipping, Clipping, Scrimping On Paper and Online, Coupons Are Coming Back Talia Holston used to spend about $150 a week to feed herself and her three children. Then she started using coupons, trolling the Internet for the best ones. Now, she spends about $200 a month on groceries. She once walked out of a CVS pharmacy having spent $50 for $200 worth of items. "Sometimes, it really feels like I'm robbing them," the Northwest D.C. resident said. "I sometimes feel bad." That is, until she looks at what stores are charging for food and toiletries these days. "The price of everything seems to be rising," she said. "When you walk out spending half what you would have, that feeling is mind-blowing."
Militarization of the American Homeland: Suppression of "Civil Disturbances" ACLU Demands Information on U.S. Military Domestic Operations On October 2, the American Civil Liberties Union (ACLU) filed a Freedom of Information Act (FOIA) request demanding information from the government on U.S. Northern Command’s (NORTHCOM) deployment of the 3rd Infantry Division’s 1st Combat Brigade Team (BCT) on U.S. soil for "civil unrest" and "crowd control" duties. Last month, Army Times published a piece detailing how the 1st BCT spent "35 of the last 60 months in Iraq." The 1st BCT–also known as the "Raiders"–carried out house-to-house raids and engaged in close-quarters combat in the city of Ramadi to suppress Iraqi resistance to U.S. occupation, according to a report on the World Socialist Website.
S.Korea announces record interest rate cut South Korea's central bank on Monday delivered its biggest ever interest rate cut and promised other measures to calm the panic that has been driving down financial markets and rapidly eroding economic growth.
Syrians Blame U.S. in Deadly Blast on Iraq Border An explosion on Sunday killed nine construction workers and wounded 19 others near the border of Iraq and Syria, the police in Anbar Province said. Local witnesses said they believed the blast was caused by American shelling, but Maj. Gen. Tariq al-Youssef, the provincial police chief in Ramadi, the capital of Anbar, which borders Syria, said that could not be confirmed. The police statement did not indicate on which side of the border the blast had taken place.
U.S. rearming Lebanon BEIRUT: For years, the Lebanese military was ridiculed as the least effective armed group in a country that was full of them. After the army splintered during the 15-year civil war, its arsenal slowly rotted into a museum of obsolete tanks and grounded aircraft. That is starting to change. At the gates of the military base in Karantina, just north of Beirut, groups of soldiers drive in and out all day in new American Humvees and trucks, some of them toting gleaming new U.S. rifles and grenade launchers.
'What's wrong with socialism?' Sometimes those of us who have been around awhile take too much for granted. I tend to assume, for instance, that most Americans understand socialism is an evil, immoral system of economics and government. But, then, occasionally, I'll get a letter from a young American who has been taught throughout his or her life that only the government can spread wealth fairly or that market economics is inherently corrupt. I got one of those this week. And I quickly realized why Barack Obama is on the verge of winning the presidency of the United States. So, I guess it's time to get back to basics with an answer to the fundamental question: "What's wrong with socialism?"
Obama's grandma confirms Kenyan birth 'This has been a real sham he's pulled off for the last 20 months' The Pennsylvania Democrat who has sued Sen. Barack Obama demanding he prove his American citizenship – and therefore qualification to run for president – has confirmed he has a recording of a telephone call from the senator's paternal grandmother confirming his birth in Kenya. The issue of Obama's birthplace, which he states is Honolulu in 1961, has been raised enough times that his campaign website has posted an image purporting to be of his "Certification of Live Birth" from Hawaii. But Philip J. Berg, a former deputy attorney general for Pennsylvania, told the Michael Savage talk radio program tonight that the document is forged and that he has a tape recording he will soon release.
Judge dismisses Obama birth certificate lawsuit Rules voters don't have standing to 'police' constitutional requirements for president A lawsuit filed by Democratic attorney Philip Berg alleging that Sen. Barack Obama is ineligible to be president was dismissed by a federal judge yesterday on grounds that Berg lacks standing to bring the lawsuit. In a 34-page memorandum that accompanied the court order, the Hon. R. Barclay Surrick concludes that ordinary citizens can't sue to ensure that a presidential candidate actually meets the constitutional requirements of the office.
Paulson: Trust McCain with job He has experience and will cut corporate taxes If you still have doubts about Barack Obama's readiness to lead, here are reasons to make Sen. John McCain your choice for president: In one word: trust. His "Straight Talk Express" is more than a slogan. He promised to join Obama in taking public funds; only McCain kept his promise. When Sen. Joe Biden talks of our enemies testing a President Obama's strength, we know past enemies have already tested McCain as a POW. He passed with flying colors. You can trust McCain to do what he believes is right for the country — "I'd rather lose an election than lose a war!" He has the maturity, integrity and proven character that only experience can affirm.
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