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by Fran on Thu Oct 9th, 2008 at 03:22:18 PM EST
UN Refers Kosovo Independence to World Court | Europe | Deutsche Welle | 09.10.2008
In a last ditch effort to maintain sovereignty over the breakaway republic, Serbia has challenged the legality of Kosovo's independence in the International Court of Justice in The Hague.

Serbian newspapers on Thursday, Oct. 9 announced a "great diplomatic victory" following a UN decision to seek an advisory legal opinion from the International Court of Justice (ICJ) on Kosovo's unilateral declaration of independence.

"Serbia's first diplomatic triumph in New York," "Great diplomatic victory" and "Serbia's win: Kosovo at the Court of Justice," wrote mass-circulation dailies Blic and Vecernje Novosti.

The UN General Assembly on Wednesday voted 77-6 to send the request to the ICJ in The Hague, with 74 abstentions. The request read: "Is the unilateral declaration of independence by the provisional institutions of self-government of Kosovo in accordance with international law?"

by Fran on Thu Oct 9th, 2008 at 03:24:47 PM EST
[ Parent ]
Moves by states to block voters may be illegal - International Herald Tribune

Tens of thousands of eligible U.S. voters in at least six swing states have been removed from the rolls or have been blocked from registering in ways that appear to violate federal law, according to a review of state records and Social Security data by The New York Times.

The actions do not seem to be coordinated by one party or the other, nor do they appear to be the result of election officials intentionally breaking rules, but are apparently the result of mistakes in the handling of the registrations and voter files as the states attempted to comply with a 2002 federal law, intended to overhaul the way elections are run.

Still, because Democrats have been more aggressive at registering new voters this year, according to state election officials, any heightened screening of new applications may affect their party's supporters disproportionately.

The screening and trimming of voter registration lists in the six states - Colorado, Indiana, Ohio, Michigan, Nevada and North Carolina - could also result in problems at the polls on Election Day: people who have been removed from the rolls are likely to show up only to be challenged by political party officials or election workers, resulting in confusion, long lines and heated tempers.

by Fran on Thu Oct 9th, 2008 at 03:28:19 PM EST
[ Parent ]
US Calls for More Troops in Afghanistan at NATO Meeting | Europe | Deutsche Welle | 09.10.2008
The US has called on fellow NATO members to allow the alliance to attack the Afghan opium trade in an effort to weaken the Taliban.

US Defense Secretary Robert Gates said the drugs trade brought windfalls of up to $80 million a year for the Taliban insurgency in Afghanistan.

"We need to have the opportunity to go after drug lords and drug laboratories and try and interrupt this flow of cash," he told reporters at a two-day meeting of NATO defense ministers which began Thursday in Budapest, Hungary.

General John Craddock, NATO operations commander, likewise appealed to the members of the 26-nation alliance for the authority to attack laboratories, trafficking networks and drug lords in Afghanistan to knock the wind out of the resurgent insurgency.

by Fran on Thu Oct 9th, 2008 at 03:31:50 PM EST
[ Parent ]
RIA Novosti - Russia - Russia stunned by UN-NATO cooperation deal

BISHKEK, October 9 (RIA Novosti) - Foreign Minister Sergei Lavrov said Thursday that Russia was shocked the UN and NATO had secretly signed a cooperation agreement without all UN member states reading the draft.

"Before such agreements are signed, their drafts should be submitted to member states for reading. But in this case this did not happen, and the agreement between the secretariats was signed secretly," Sergei Lavrov told journalists after a CIS foreign ministers' meeting in Bishkek.

The Russian diplomat said he had asked UN Secretary General Ban Ki-moon while at the UN General Assembly last month why such secrecy was needed but "received no comprehensible explanation."

He also said it was surprising that although the document implied cooperation between the two secretariats, its text contained provisions related to immediate prerogatives of member states, including the intention to cooperate in maintaining international security on the basis of the UN Charter and certain international directives.

by Fran on Thu Oct 9th, 2008 at 03:35:24 PM EST
[ Parent ]
If we should find and play back the tapes
at proper time, place and rates
We'll hear and smell the hidden Cheney say
with sneers and in his most devious way

     Sliver'd in the moon's eclipse;
     Nose of Turk, and Tartar's lips;
     Finger of birth-strangled babe
     Ditch-deliver'd by a drab,--
     Make the gruel thick and slab:
     Add thereto a tiger's chaudron,
     For the ingrediants of our caldron.
ALL.  Double, double toil and trouble;
          Fire burn, and caldron bubble.

drab - prostitute
chaudron - entrails


Never underestimate their intelligence, always underestimate their knowledge.

Frank Delaney ~ Ireland

by siegestate (siegestate or beyondwarispeace.com) on Fri Oct 10th, 2008 at 02:18:02 AM EST
[ Parent ]
Cheney = three weird sisters all in one! Frightening!
by afew (afew(a in a circle)eurotrib_dot_com) on Fri Oct 10th, 2008 at 05:32:50 AM EST
[ Parent ]
Bloomberg.com: U.S. Stocks Tumble, Sending Dow Below 9,000; GM, Insurers Slide  
U.S. stocks slid and the Dow Jones Industrial Average fell below 9,000 for the first time since 2003 as higher borrowing costs and slower consumer spending spurred concern carmakers, insurers and energy companies will be the next victims of the credit crisis.

General Motors Corp. tumbled 31 percent and Ford Motor Co. slumped 22 percent as the outlook for car sales worsened. XL Capital Ltd. lost 54 percent and led a gauge of insurers to a 13-year low on concern investment losses will curb results. Exxon Mobil Corp.'s biggest drop in 21 years accelerated the Dow's decline in the final hour of trading as oil retreated below $85 a barrel. Morgan Stanley plunged 26 percent as short sellers returned to the market after a three-week ban.

``People have lost faith in everything,'' said Philip Orlando, who helps manage $350 billion as chief equity market strategist at Federated Investors Inc. in New York. ``We're dealing with an investment community of atheists right now. Valuations no longer matter.''

The Standard & Poor's 500 Index retreated for a seventh day, losing 75.02 points, or 7.6 percent, to 909.92 to cap its longest streak of daily declines since 1996. The Dow Jones Industrial Average declined 678.91, or 7.3 percent, to 8,579.19. The Nasdaq Composite Index decreased 5.5 percent to 1,645.12. Twenty stocks fell for each that rose on the New York Stock Exchange.



"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
by Melanchthon on Thu Oct 9th, 2008 at 05:14:07 PM EST
[ Parent ]
Grasping Reality with Both Hands: The Semi-Daily Journal Economist Brad DeLong

We--all of us from Nouriel Roubini to Lawrence Summers to John Taylor to Tim Geithner (except perhaps Ben Bernanke, who really did seem to believe in a long-run global savings glut)--were expecting a very different financial crisis. We were expecting the Balance of Financial Terror between Asia and America to collapse and produce chaos. We were expecting a free fall in the dollar's value that would push and be pushed by large-scale capital flight from America that would produce high interest rates and a collapse of construction and investment. We were expecting a collapse of imports into the United States that would produce a free fall in employment and in political stability in Asia. We expected the Federal Reserve and the U.S. Treasury to be powerless--for we expected the safe asset that banks and investors would scramble for in the chaos to be anything but U.S. Treasuries and reserve deposits at the Fed. And for the avoidance of a catastrophic balancing-down of the world economy we expected the United States to have to depend on the kindness of, well, not strangers exactly but of a disorganized congerie of national Treasuries and central banks that were unused to a world without a Kindlebergian hegemon.

We are not having that financial crisis. And it looks like we will not have that financial crisis: if the past year's financial chaos in New York has not provoked a run on the dollar, it is hard to envision a scenario that would. Instead we are having a very different financial crisis: catastrophic failures of risk management throughout the entire banking sector have caused a relatively minor--by the standards of the global economy--collapse in housing prices in Riverside County, CA, Dade County, FL, and a few other places to freeze up global finance to a degree that has not been seen since the Great Depression. The first good thing about this situation is that it does not call for different central banks and Treasuries to do different things, but rather for them all to do the same thing in unison without fouling each other's oars.



The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
by dvx (dvx.clt ät gmail dotcom) on Fri Oct 10th, 2008 at 05:09:51 AM EST
[ Parent ]
Banks borrow record $420.2 bln per day from Fed | Reuters
U.S. banks' direct borrowing from the Federal Reserve climbed to a record for the second straight week as they continued to rely on the lender of last resort amid the most severe financial crisis in a generation.

Banks' discount window borrowings averaged a huge $420.2 billion per day in the week ended Oct. 8, beating the previous record daily average of $367.8 billion they borrowed the previous week.

Primary credit borrowings averaged a $75.01 billion per day in the latest week, 70 percent higher than the $44.46 billion average in the previous week.

Primary dealers and other broker dealers credit borrowings were $122.94 billion as of Wednesday Oct 1, down from $146.57 billion on Oct 1.

Loans in the "other credit extensions" category, including loans to insurer AIG were $70.30 billion as of Oct. 1, versus $61.28 billion a week earlier.

by das monde on Fri Oct 10th, 2008 at 05:55:18 AM EST
[ Parent ]
Does anyone have subscription access to this:

RGE - How authorization to recapitalize banks via public capital injections ("partial nationalization") was introduced - indirectly through the back door - into the TARP legislation

The reality is that the TARP legislation passed by Congress (formally the Emergency Economic Stabilization Act) does not in any explicit way allow for such recapitalization of banks via injection of public capital. The US Treasury has initially resisted including explicitly such authority in the Act for several reasons: the banking industry that helped drafting the legislation was against it; there was ideological resistance to the idea of the government taking equity - however preferred - in financial institutions; there was concern that being explicit about public recap of banks would lead to banks' resistance to participate in the toxic asset purchase program. That is why the Treasury formally resisted putting any explicit wording of public recapitalization of banks into the legislation.

So how come Treasury now says that its first priority is to inject public capital in banks? And where is Paulson getting such authority since there is nothing formally explicit in the Act to allow such recapitalization?

This is a fascinating story that is worth telling in full detail. Here are below those details...

I expect it will prove geezer in paris right, but it would be nice to read it directly.

Truth unfolds in time through a communal process.

by marco on Thu Oct 9th, 2008 at 05:24:25 PM EST
[ Parent ]

...

So where did Paulson get the authority to do such capital injection when there was no such authority in the wording of the legislation? Several of us had been explicitly and feverishly talking to Congress and the Fed and other senior officials (last week before the passage of the legislation) to include such explicit wording in the legislation; such campaign included the October 1st column by George Soros in the FT where he strongly argued - as many of us had recommended - to design legislation that explicitly allowed for public capital injection in banks.

At first, Congressional aides we contacted were confused on whether the wording in the legislation did allow such public recapitalization was permitted or not. They pointed out to us that several sections of the legislation could be interpreted as allowing such public capital injection.

...

But we pointed out that this interpretation of "assets" as including preferred shares, left to itself, was a real stretch of the meaning of the legislation as preferred shares and common shares and sub debt are liabilities - rather than assets - of the bank. Thus, it was important to clarify that "any other financial instrument" was not limited to assets but also included institution's liabilities such as stock, preferred stock, subordinated debt, senior debt.

...

Since it was too late - by Wednesday last week - to explicitly modify the legislation to allow for explicit wording on this matter and since Treasury was resisting such late explicit changes (that would have jolted the banking industry) the tool that was used (in full agreement with the House and Senate leadership) to allow for such interpretation was to have Representative Jim Moran use the October 3rd House floor debate right before the final vote to put on the legislative record such interpretation. See the following important exchange between Jim Moran and Barney Frank that is now on the legislative record of the House:

Mr. MORAN of Virginia. Thank you, Madam Speaker. I won't take that much time. I do want to thank the chairman for his masterful leadership on this bill, and I do want to clarify that the intent of this legislation is to authorize the Treasury Department to strengthen credit markets by infusing capital into weak institutions in two ways: By buying their stock, debt, or other capital instruments; and, two, by purchasing bad assets from the institutions, in coordination with existing regulatory agencies and their responsibilities under this legislation, as well as under already existing authorization for prompt, corrective action and leastcost resolution.

Mr. FRANK of Massachusetts. Will the gentleman yield?

Mr. MORAN of Virginia. I'd be happy to yield.

Mr. FRANK of Massachusetts. I can affirm that. As the gentleman knows, the Treasury Department is in agreement with this, and we should be clear, this is one of the things that this House and the Senate added to the bill, the authority to buy equity. It is not simply buying up the assets, it is to buy equity, and to buy equity in a way that the Federal Government will able to benefit if there is an appreciation.

...

So, all is well that ends well. A totally flawed and ineffective legislation that did not explicitly allow to do the right thing - recapitalize banks with public capital injections - and was rather aimed to do the wrong thing (wasting $700 bn of taxpayers' money to buy only toxic assets at an inflated price) was rescued at the last moment right before the House vote via an interpretation of the wording of the legislation in the record of the House that allowed such recapitalization.

...

They effectively and rightly allowed for a partial nationalization of the US financial system (the only solution that will prevent a systemic financial meltdown) without even exactly knowing that they were voting for this. So a huge plan that was sold as spending $700 bn to buy toxic waste of banks - and where the public discussion was all and only about this purchase of toxic assets - was finally and luckily rectified (with the hard and explicit efforts of many of us) to allow for a partial government takeover of such financial institutions.



"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
by Melanchthon on Thu Oct 9th, 2008 at 06:21:35 PM EST
[ Parent ]
See also this paper

"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
by Melanchthon on Thu Oct 9th, 2008 at 06:38:40 PM EST
[ Parent ]
but they did it above the board and as publicly as possible, not under the cover and secretly as I had feared.  Democracy was not skirted or subverted to get this done, and there was no resorting to ends justifying the means.

However, I think Roubini is wrong on one point:  I am sure Barney Frank and Jim Moran knew exactly what they were doing, and they coordinated deliberately to make those statements on the House floor precisely in order to get this critical option on the record as being covered in the bill.

Thank you, Melanchthon, for posting this.

Truth unfolds in time through a communal process.

by marco on Thu Oct 9th, 2008 at 08:26:16 PM EST
[ Parent ]
Interesting - the legislative equivalent to a signing statement.

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
by dvx (dvx.clt ät gmail dotcom) on Fri Oct 10th, 2008 at 03:53:03 AM EST
[ Parent ]
That's just crazy. It means the text of the law as found, say, in The LIbrary of Congress is not enough to know what the law says?

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Fri Oct 10th, 2008 at 04:26:09 AM EST
[ Parent ]
It's a moral problem. It's always been a moral problem. If you destroy the moral and legal foundations for finance and government and remove all trust in democracy, in due process, in accountability and in personal and corporate good faith, an epic crash is the only possible outcome.
by ThatBritGuy (thatbritguy (at) googlemail.com) on Fri Oct 10th, 2008 at 04:35:16 AM EST
[ Parent ]
We can't have spent years criticising Bush's "signing statements" to now say that an exchange on the House floor is okay.

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Fri Oct 10th, 2008 at 04:39:40 AM EST
[ Parent ]
We may discuss whether it is OK, but it sure is a lot better than a signing statement.
Legislative power must reside with the legislature. The House floor is part of it.

I would like all laws to be well written, appropriately and unambiguously. But I am more interested in the spirit of the law than in its wording alone. I don't want executive power abusing the letter of the law by deliberately promoting an understanding that, while it might be defended semantically, clearly goes against what the law was trying to say.

That's what a signing statement does. It says "I deliberately choose to misunderstand, and F you by the way".

Whereas an exchange on the House floor is pretty much saying: do we all understand that this is what we mean? Far better to have it in the text of the law, but if it's not possible for timing reasons, it at least comes before the vote and cannot be compared to a Bush signing statement.

"The womb that spawned that thing is fertile yet"

by Cyrille (cyrillev domain yahoo.fr) on Fri Oct 10th, 2008 at 07:41:08 AM EST
[ Parent ]
I'm not sure it's crazy, and as I understand it (though IANAL), the written text of a law is just a starting point, even in non-Anglo Saxon jurisprudence.

Legislative intent - Wikipedia, the free encyclopedia

In law, the legislative intent of the legislature in enacting legislation may sometimes be considered by the judiciary when interpreting the law (see judicial interpretation). The judiciary may attempt to assess legislative intent where legislation is ambiguous, or does not appear to directly or adequately address a particular issue.

When a statute is clear and unambiguous, the courts have said, repeatedly, that the inquiry into legislative intent ends at that point. It is only when a statute could be interpreted in more than one fashion that legislative intent must be inferred from sources other than the actual text of the statute.

German jurisprudence seems to allow a comparable approach.

By the same token, a signing statement might also be considered a legitimate attempt to resolve an ambiguity.

The problem, of course, comes when these instruments are abused (as when unambiguous provisions are voided by a signing statement) or used beyond their appropriate scope (i.e. the Franks exchange would seem to be a very tenuous basis on which to establish legislative intent).

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman

by dvx (dvx.clt ät gmail dotcom) on Fri Oct 10th, 2008 at 05:07:23 AM EST
[ Parent ]
Obscurity is often intentional now, that is, the main legislative intent is... obscurity.

Legislative languages seem to have evolved intentionally more obscure, so that full understanding (even reading through) would be beyond capabilities of legislators. A very convenient way to pass or interpret laws "as needed".

by das monde on Fri Oct 10th, 2008 at 05:53:14 AM EST
[ Parent ]
I'm sure you're right that a lot of legislators cannot read the laws they enact, but I think that's there fault, and not the fault of the language.

Legislative language is by nature obscure because it is both old and has evolved a highly complex structure - the purpose being to minimize ambiguity.

I suspect that laws that at first glance seem readily comprehensible are those most subject to sweeping and arbitrary interpretation: "simple" terms like "antisocial behavior" can be (and was, under National Socialism) stretched to cover almost anything.

So I'll take the law framed in obscure language to one couched in accessible terms any day.

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman

by dvx (dvx.clt ät gmail dotcom) on Fri Oct 10th, 2008 at 07:30:30 AM EST
[ Parent ]
As there is much political battling around any legislation, obscurity can easily become a tool. It is also useful to hide contradictions in the whole set of laws - so that some come "prove" or do anything. Is there any force that would pull towards clarity in laws? Would anyone do something to set language precision?

A particular phenomenon is absurd length of some law acts, up to over thousand pages. You heard of the Patriot Act, numerous pork-barrel projects and "hidden" details in US lawmaking. Can we compare obscurity and length of laws in various countries, or of different times?

As a concrete example, ponder by what intentions The Second Ammendment is formulated like this:

A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.

What is "Militia", why it is stressed first? How a right can be "well regulated"? Is "necessary to the security" a declaration or a condition?

by das monde on Fri Oct 10th, 2008 at 08:12:39 AM EST
[ Parent ]
It was a common form of sentence construction of the time, that was clearly understood.

'A well regulated Militia' meant (then) the temporary deputizing of citizens to train and fight to defend the state/territory - under military command and under military rules.

The right to keep and bear arms was to fulfill that duty of serving in the militia, not for any other reason - according to the amendment as it was understood at the time it was written.

Sentence construction changes. Vocabulary changes. ;-)

You can't be me, I'm taken

by Sven Triloqvist on Fri Oct 10th, 2008 at 08:40:38 AM EST
[ Parent ]
In the mdern US, the "well-regulated militia" is the National Guard. That's the only way I make sense of the Second Amendment.

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Fri Oct 10th, 2008 at 08:43:48 AM EST
[ Parent ]
I agree. There was also a logistical/budgetary consideration at the time of the 2nd amendment. Deputized citizens were expected to bring their own rifles -  Thus 'keep'. And 'bear' also had the meaning of display, rather than use.

Later in the 19th century, a 'posse' of deputized sheriffs would be formed under the same principles - they brought their own horses too.

The military draft is a form of deputizing, except you are not allowed to bring anything of your own ;-)

You can't be me, I'm taken

by Sven Triloqvist on Fri Oct 10th, 2008 at 09:00:30 AM EST
[ Parent ]
Did the horses have bear arms as well, or could they keep their legs and hooves?

Never underestimate their intelligence, always underestimate their knowledge.

Frank Delaney ~ Ireland

by siegestate (siegestate or beyondwarispeace.com) on Fri Oct 10th, 2008 at 11:25:58 AM EST
[ Parent ]
Surely thats a whole level of transplant surgery beyond where we are even now?

horses with bears arms would be very scary though

Any idiot can face a crisis - it's day to day living that wears you out.

by ceebs (ceebs (at) eurotrib (dot) com) on Fri Oct 10th, 2008 at 11:33:39 AM EST
[ Parent ]
dvx: Legislative language is by nature obscure because it is both old and has evolved a highly complex structure - the purpose being to minimize ambiguity.

Does this apply to the phrase "any other financial instrument" as used in the TARP bill?

Truth unfolds in time through a communal process.

by marco on Fri Oct 10th, 2008 at 08:56:44 AM EST
[ Parent ]
Yes.

"Instrument" solves the problem of using the word "Asset" since the same instrument looks like an "Asset" or a "Liability" depending on which side of the transaction you sit.

Generality removes ambiguity. It also gives greater discretion.

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith

by Migeru (migeru at eurotrib dot com) on Fri Oct 10th, 2008 at 08:59:49 AM EST
[ Parent ]
There usually is a logic to legal wording.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Fri Oct 10th, 2008 at 09:53:30 AM EST
[ Parent ]
Roubini doesn't say Frank and Moran didn't know what they were doing. On the contrary, he says they agreed to play this role in full agreement with the House and Senate leadership. I think he refers to the other Senate and House members.

"Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
by Melanchthon on Fri Oct 10th, 2008 at 04:11:12 AM EST
[ Parent ]
You're right.  I was definitely not reading carefully enough.

Do you think the striking vagueness/generality of "any other financial instrument" was intentional to start out with (i.e. in order to sneak the stock injection plan past the pack of resistant legislators)?

Truth unfolds in time through a communal process.

by marco on Fri Oct 10th, 2008 at 05:26:59 AM EST
[ Parent ]
Don't kill the messenger!

...as I traveled from a Texas cotton farm to a Chinese factory, from Washington bureaucrats to a third-generation used-clothing dealer descended from Jewish immigrants, to Muslim importers in East Africa, I kept marveling at how well everyone got along. While bombs were dropping, these Muslims, Jews, blacks, and whites stayed friends because of my T-shirt. The yarn and cloth and clothing bound them together; world trade bound them together. They had no choice but to keep talking to one another. The little guys got along just fine while the big guys were fighting. Whatever the debates about trade, it was clear to me after my travels that trade is very clearly an instrument of peace and understanding. I feel privileged that everyone I wrote about is my friend now, and I hope the readers like all of the players in my T-shirt's life story as much as I do.


"Beware of the man who does not talk, and the dog that does not bark." Cheyenne
by maracatu on Thu Oct 9th, 2008 at 05:32:02 PM EST
[ Parent ]
FT.com - Beijing monitors foreign financial groups

Beijing has stepped up its monitoring of international financial institutions in the country amid fears that the failure of a large foreign group could see the global credit crisis spill over into a largely insulated China.

China's securities regulator has ordered all joint venture fund management groups to report on the health and financial position of their foreign partners and explain how the global turmoil could affect operations in China.



Truth unfolds in time through a communal process.
by marco on Thu Oct 9th, 2008 at 06:17:04 PM EST
[ Parent ]
Despite the full-court press of policy makers, markets plunge again. Too late to sell?

By RANDALL W. FORSYTH Barron's Online, THURSDAY, OCTOBER 9, 2008

You don't need me to tell the carnage in the likes of General Motors (ticker: GM), which got hammered by 31%, or Morgan Stanley (MS), which was smoked by 26%.

What was stunning in Thursday's market was the beating taken by the bluest of blue chips in the market: Johnson & Johnson (JNJ), down 7.7%; Procter & Gamble (PG), down 7.9%; Exxon Mobil (XOM), down 11.7%; Schlumberger (SLB), down 8.5%. And the iShares S&P Global 100 (IOO), an exchange-traded fund consisting of the 100 biggest companies on the planet -- also including the likes of global behemoths such as Microsoft (MSFT), BP (BP) and Total (TOT) -- fell 7.4%.

This suggests a climax likely is at hand. Lows are made when investors are forced to sell their best, highest-quality holdings to meet redemption or margin calls.

That doesn't mean this is the time to plunge in. But it's looking as if it's getting too late to sell.




"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Oct 10th, 2008 at 12:01:10 AM EST
[ Parent ]
bear market trap?

you are the media you consume.

by MillMan (millguy at gmail) on Fri Oct 10th, 2008 at 02:21:21 AM EST
[ Parent ]
Only time will tell.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Oct 10th, 2008 at 10:23:10 AM EST
[ Parent ]
Asian Stocks Plunge as Credit Crisis Deepens; Treasuries Climb | Bloomberg

Asian stocks tumbled, driving Japan's Nikkei 225 Stock Average down 11 percent, and U.S. futures slumped on concern the deepening credit crisis will push the global economy into recession. Treasuries and the yen gained.

Mitsubishi UFJ Financial Group Inc. plunged 8.5 percent after Moody's Investors Service said it may cut Morgan Stanley's credit rating. Neptune Orient Lines Ltd., Southeast Asia's largest container-shipping company, declined 12 percent on concern the region's exports will slow. BHP Billiton Ltd., the world's biggest mining company, lost 7 percent after crude oil fell to the lowest level in a year. Indonesia's stock exchange delayed the resumption of trading, extending a two-day halt.

`It's pure panic,'' said Ivan Tham, Singapore-based head of funds management at Kuwait Finance House, which has about $24 billion in assets. ``You're seeing companies start to fail because they can't refinance. Good companies are being sold down aggressively with the bad.''

The inability of corporations to refinance and rollover debt is THE trigger of the financial meltdown oozing into the Real Economy.

If this isn't solved PDQ were looking at a global economic meltdown.

Sidenote, my 97 year old father-in-law is hysterical.  "This is how I remembering it happening back in '29," he keeps telling me.


She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Fri Oct 10th, 2008 at 12:49:27 AM EST
[ Parent ]
That's an interesting name your elderly father-in-law has. At first I thought it to be proto-Norse, but now I think it is probably Hindi ;-)

You can't be me, I'm taken
by Sven Triloqvist on Fri Oct 10th, 2008 at 03:30:13 AM EST
[ Parent ]
Japan seeks IMF help
JAPAN will propose the creation of a new scheme under the auspices of the International Monetary Fund (IMF) that would mobilise countries' foreign currency reserves to help fund emergency loans to emerging nations facing financial crises, the Nikkei business daily reported on Friday.

Tokyo will make the proposal at a meeting of finance ministers and central bank chiefs from Group of Seven (G7) advanced countries in Washington on Friday, the newspaper said, without quoting specific sources.

The scheme would be directed at small and mid-sized emerging countries, not G7 members or other large nations, it added.

Under the plan, the IMF would ask the country that was to receive the funds to draw up a plan for revitalising its financial sector including writing off its bad assets.

The new emergency loans would be funded by the approximately 200 billion yen (S$3 billion) contributed by IMF member countries plus loans from the foreign currency reserves of countries such as Japan, China and oil-rich Middle Eastern countries, the paper said.

by das monde on Fri Oct 10th, 2008 at 04:34:56 AM EST
[ Parent ]
More like "Too misleading headline".

Truth unfolds in time through a communal process.
by marco on Fri Oct 10th, 2008 at 05:33:22 AM EST
[ Parent ]
   

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Oct 10th, 2008 at 09:25:56 AM EST
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PR Consultant Helped Palin Grab Spotlight - washingtonpost.com

During her first months in office, Alaska Gov. Sarah Palin kept a relatively light schedule on her workdays in Juneau, making ceremonial appearances at sports events and funerals, meeting with state lawmakers, and conducting interviews with Alaska magazines, radio stations and newspapers.

But this spring, Palin's official calendar chronicles an extraordinary rise to national prominence. A fresh face in Republican politics, she was discovered by the national news media at least in part because of a determined effort by a state agency to position her as an oil and gas expert who could tout Alaska's determined effort to construct a natural gas pipeline.

An outside public relations expert hired under a $31,000 contract with the state Department of Natural Resources pitched the "upstart governor" as a crusader against Big Oil, a story line that Palin has adopted in her campaign as Sen. John McCain's running mate. The contract was the only time the Palin administration hired an outside consultant to set up media interviews, a function performed in many states by government employees.

At the state Capitol, Palin agreed to be "shadowed" for days by some national reporters, and her dealings with the legislature dropped off so dramatically that some House and Senate members donned red-and-white "Where's Sarah?" buttons to show their disapproval. But her high-visibility campaign paid off, helping Palin win notice from political pundits, who began including her on lists of long-shot choices for the GOP vice presidential spot.

[...]

Palin's gubernatorial calendar, obtained by The Washington Post under the Alaska Public Records Act, adds to the understanding of Palin as a political phenomenon, a governor from an obscure state who exploded onto the national stage after just 21 months in office. While many factors played a role in Palin's rise, including her background in broadcast journalism and the appeal of her life story, she also benefited from expert counsel on how to take her message to a national audience.



The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
by dvx (dvx.clt ät gmail dotcom) on Fri Oct 10th, 2008 at 03:55:23 AM EST
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The End Of American Capitalism? - washingtonpost.com

The worst financial crisis since the Great Depression is claiming another casualty: American-style capitalism.

Since the 1930s, U.S. banks were the flagships of American economic might, and emulation by other nations of the fiercely free-market financial system in the United States was expected and encouraged. But the market turmoil that is draining the nation's wealth and has upended Wall Street now threatens to put the banks at the heart of the U.S. financial system at least partly in the hands of the government.

The Bush administration is considering a partial nationalization of some banks, buying up a portion of their shares to shore them up and restore confidence as part of the $700 billion government bailout. The notion of government ownership in the financial sector, even as a minority stakeholder, goes against what market purists say they see as the foundation of the American system.

[...]

Given that the United States has held itself up as a global economic model, the change could shift the balance of how governments around the globe conduct free enterprise. Over the past three decades, the United States led the crusade to persuade much of the world, especially developing countries, to lift the heavy hand of government from finance and industry.

But the hands-off brand of capitalism in the United States is now being blamed for the easy credit that sickened the housing market and allowed a freewheeling Wall Street to create a pool of toxic investments that has infected the global financial system. Heavy intervention by the government, critics say, is further robbing Washington of the moral authority to spread the gospel of laissez-faire capitalism.



The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
by dvx (dvx.clt ät gmail dotcom) on Fri Oct 10th, 2008 at 03:57:40 AM EST
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Are these writers not embarrassed? They write these insipid articles as if we just woke from our opiate, incapable of remembering the GreedyBastardTechTM crisis of 8 or 9 years ago and the GreedyBastardS&LTM crisis from 8 or 9 years before that, and what was before that which we had to slow thru, that thing with Bush I that was stagnation for growing companies (at least it taught me how to game the system to prepare ourselves for the next one) and what GreedyBastardWarTM was before that...was it Reagan's destruction of the last few things that we held good at the alter of his puppet masters greed and wasn't capitalism failing (Beat Inflation Now; We don't take gold anymore, sorry) for Nixon until we found the right material for a stake to put in his heart so that would actually take him out of our misery.

That's the extent of what I've witnessed in my life in business, but certainly there were other failures of capitalism before that and after That GreatOne. And I have seen lists that show that the trend is similar from after the American Civil War through to then.

Now, I'm not a CentralControl person, for we have proved that we don't have the algorithms for that either, but what is it about capitalism that it gets revered? when most of us are only a few generations from being out of the freaking mines? Maybe because it accommodates more GreedyBastardsTM per capital suck, and more variations on GreedyBastardTechnologyTM.

It doesn't work!!! It needs to get bailed out!!!! Often!!!!

Admit to the need and build the bail-outs into the system, or neuter the greedy bastards who continuously make it go wrong, or declare the greedy bastard of the year as winner, reset the capital clock and start a new game so we don't have to let it get out of hand and destroy people future and daily lives.

</rant>

Never underestimate their intelligence, always underestimate their knowledge.

Frank Delaney ~ Ireland

by siegestate (siegestate or beyondwarispeace.com) on Fri Oct 10th, 2008 at 07:54:28 AM EST
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"Journalists" under 40 would likely have no personal memory of the S & L crisis and if they were properly indoctrinated in economics courses in college....

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Oct 10th, 2008 at 10:28:36 AM EST
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The Evening standard had a whole page the other day where they interviewed City traders about the British bailout plan. The piece introduced them as all "male, under 40" and "too young to remember Black Tuesday of 1987".

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Fri Oct 10th, 2008 at 10:32:12 AM EST
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How about the Evening Standard's interviewer and the author of the article?

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Oct 10th, 2008 at 10:59:02 AM EST
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40's not the benchmark.

I'm 32 and I remember Black Tuesday very well.

"The womb that spawned that thing is fertile yet"

by Cyrille (cyrillev domain yahoo.fr) on Fri Oct 10th, 2008 at 11:17:33 AM EST
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So do I, but we were too young to be traders in 1987, weren't we?

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Fri Oct 10th, 2008 at 11:19:31 AM EST
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Indeed.

But it is a pity if people are only influenced by their work experience.
It would mean a total inability to learn from history, for a start.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Sat Oct 11th, 2008 at 12:52:44 PM EST
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Joint Chiefs Chairman Is Gloomy on Afghanistan - NYTimes.com

WASHINGTON -- With security and economic conditions in Afghanistan already in dire straits, the chairman of the Joint Chiefs of Staff said Thursday that the situation there would probably only worsen next year.

"The trends across the board are not going in the right direction," the chairman, Adm. Mike Mullen, told reporters. "I would anticipate next year would be a tougher year."

Admiral Mullen said Afghanistan was likely to continue what a nearly completed intelligence assessment called "a downward spiral" unless there were rapid, major improvements. Those improvements include curbing Afghanistan's booming heroin trade, bolstering district and tribal leaders to offset a weak central government in Kabul, breathing life into a flagging economy and stemming the flow of militants who are carrying out increasingly sophisticated attacks from havens in Pakistan.

Admiral Mullen struck a pessimistic note when asked whether it was likely such reversals would take place.

"Both the trends and the status specifically of where we are on those other things right now would indicate that the trends are going to continue," he said.



The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
by dvx (dvx.clt ät gmail dotcom) on Fri Oct 10th, 2008 at 03:59:57 AM EST
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In Dozens of Calls, Palins Pressed for Trooper's Removal - NYTimes.com
ANCHORAGE -- The 2007 state fair was days away when Alaska's public safety commissioner, Walt Monegan, took another call about one of his troopers, Michael Wooten. This time, the director of Gov. Sarah Palin's Anchorage office was on the line.

As Mr. Monegan recalls it, the aide said the governor had heard that TrooperWooten was assigned to work the kickoff to the fair in late August. If so, Mr. Monegan should do something about it, because Ms. Palin was also planning to attend and did not want him nearby.

[...]

Two years earlier, the trooper and the governor's sister had been embroiled in a nasty divorce and child-custody battle that had hardened the Palin family against him. To Mr. Monegan and several top aides, the state fair episode was yet another example of a fixation that the governor and her husband, Todd, had with Trooper Wooten and the most granular details of his life.

"I thought to myself, `Man, do they have a heavy-duty network and focus on this guy,' " Mr. Monegan said. "You'd call that an obsession."

On July 11, Ms. Palin fired Mr. Monegan, setting off a politically charged scandal that has become vastly more so since Ms. Palin became the Republican vice-presidential nominee.



The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
by dvx (dvx.clt ät gmail dotcom) on Fri Oct 10th, 2008 at 04:05:00 AM EST
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