Plunge Protection Team Issues Statement
October 7th, 2008Don’t panic.
Via: U.S. Treasury:
While addressing our challenges, we must also remind investors and lenders that we have a resilient and diverse economy and workforce. We have faced economic and financial market challenges in the past. Each time we have worked through them and emerged with stronger financial institutions and regulatory policies. While it will take time and a lot of hard work, we are confident that this time will be no different.
Russian Stocks Plunge by Nearly 20 Per Cent, Worst Daily Loss Ever
October 6th, 2008Via: The Canadian Press:
Russia’s benchmark stock exchange suffered its biggest-ever one-day loss as shares went into free fall on the back of falling oil prices and deepening fears about the global economy despite the passage of a US$700 billion U.S. bank bailout.
Trading on MICEX – the country’s largest index – was shut down three times, closing down 18.6 per cent to 752 points. The benchmark RTS – where trading was halted twice – crashed to its lowest point since August 2005, falling by 19.1 per cent to 866.4 points. It is the most the RTS has fallen in one day.
Germany to Allow Domestic Military Deployment
October 6th, 2008Via: AP:
Germany’s governing coalition partners want to change the constitution to allow for military deployment within the country if needed to combat terrorism, officials said Monday.
The proposal would allow use of the military only if police are overwhelmed and cannot properly respond to a situation themselves.
“It is not to be used generally, but only in very specific cases,” Interior Ministry spokeswoman Daniela-Alexandra Pietsch said.
The center-left Social Democratic Party — which makes up half of Chancellor Angela Merkel’s coalition — had been opposed to the proposal but agreed late Sunday after working out an agreement that includes strict guidelines for domestic deployment.
“We’re talking only about emergency help,” Social Democrat parliamentary leader Peter Struck said. For example, the navy could be called to help in a situation where police maritime patrols were not sufficient, he said.
The proposal will now go to Merkel’s Cabinet and then to parliament for approval.
Given Germany’s militaristic past, many are hesitant to expand the role of soldiers domestically. Currently, the German military can be deployed within the country only in times of war, or to help with emergencies or natural disasters.
Following the announcement of the new proposal, opposition Left Party lawmaker Petra Pau accused the government of seeking to violate a constitutionally dictated division “between army, police and secret services.”
“The military has no role domestically for historic, political, legal and professional reasons,” Pau said.
Germany used Tornado fighter jets to secure airspace during last year’s Group of Eight summit, while troops helped provide support to police controlling demonstrations.
Merkel’s government at the time defended the deployment as necessary to secure the area and provide technical and logistical support for police. But the opposition Greens party criticized it as “a creeping breach of the constitution.”
FED WILL PROVIDE AS MUCH AS $900 BILLION IN LOANS TO BANKS
October 6th, 2008Via: AP:
The Federal Reserve will provide as much as $900 billion in cash loans to squeezed banks in an urgent effort Monday to break through a dangerous credit clog that threatens the economy and has unhinged financial markets around the globe.
The Fed’s action is aimed at spurring spooked financial institutions, which are hoarding cash, to lend not only to each other but also to individuals and businesses.
Even as the Fed pledged to take “additional measures as necessary” to battle the worst credit crisis in decades, Wall Street was in a nosedive. The Dow Jones industrials plunged more than 500 points in morning trading. Fears spread around the globe about the ability of policymakers in the United States and abroad to turn around the situation.
The lending lockup is a key reason why the U.S. economy is faltering. Unable to borrow money freely or forced to pay a high cost to borrow, employers are cutting jobs and reducing capital investments. Consumers have retrenched.
To better open the lending spigots, the Fed said 28-day and 84-day cash loans being made available to banks will be boosted to $150 billion a piece, effective Monday. Those increases will eventually bring the amounts outstanding under the program to $600 billion.
Loans that will be made available in November to banks also will be increased to $150 billion each. That makes a total of $900 billion in credit potentially outstanding over year end, the Fed said.
GLOBAL EQUITIES IN VERY SHARP SELL OFF, DOW TAKES OUT 10,000
October 6th, 2008“Plunge Protection Team, please pick up the white courtesy phone.”
So much for the 10,000-as-support theory. HA. Like a hot knife through butter.
Via: AP:
Wall Street tumbled Monday, joining a selloff around the world, as fears grew that the financial crisis will cascade through economies globally despite bailout efforts by the U.S. and other governments. The credit market remained under strain, and investors piled into government bonds. The Dow Jones industrials skidded more than 300 points and fell below 10,000 for the first time in four years.
The markets have come to the sobering realization that the Bush administration’s $700 billion rescue plan won’t work quickly to unfreeze the credit markets, and that many banks are still having difficulty gaining access to cash.
Over the weekend, governments across Europe rushed to prop up failing banks. The German government and financial industry agreed on a $68 billion bailout for commercial-property lender Hypo Real Estate Holding AG, while France’s BNP Paribas agreed to acquire a 75 percent stake in Fortis’s Belgium bank after a government rescue failed.
The governments of Germany, Ireland and Greece also said they would guarantee bank deposits.
The Federal Reserve also took fresh steps to help ease seized-up credit markets. The central bank said Monday it will begin paying interest on commercial banks’ reserves and will expand its loan program to squeezed banks.
“These programs are going to be effective I believe,” said Rob Lutts, chief investment officer at Cabot Money Management. “Shorter term we’re in a very challenging environment that’s going to take a while.”
In the first hour of trading, the Dow Jones industrial average fell 336.43, or 3.26 percent, to 9,988.95, dropping below 10,000 for the first time since Oct. 29, 2004.
Broader indexes also tumbled. The Standard & Poor’s 500 index shed 40.26, or 3.66 percent, to 1,058.97; and the Nasdaq composite index fell 77.35, or 3.97 percent, to 1,870.04. The Russell 2000 index of smaller companies dropped 22.30, or 3.60 percent, to 597.10.
In Asia, the Nikkei 225 closed 4.25 percent lower. Europe’s stock markets also declined, with the FTSE-100 down 3.24 percent, Germany’s DAX down 5.28 percent, and France’s CAC-40 down 5.60 percent.
Reports Link Karzai’s Brother to Afghanistan Heroin Trade
October 6th, 2008Captain Obvious strikes again.
Via: New York Times:
When Afghan security forces found an enormous cache of heroin hidden beneath concrete blocks in a tractor-trailer outside Kandahar in 2004, the local Afghan commander quickly impounded the truck and notified his boss.
Before long, the commander, Habibullah Jan, received a telephone call from Ahmed Wali Karzai, the brother of President Hamid Karzai, asking him to release the vehicle and the drugs, Mr. Jan later told American investigators, according to notes from the debriefing obtained by The New York Times. He said he complied after getting a phone call from an aide to President Karzai directing him to release the truck.
Two years later, American and Afghan counternarcotics forces stopped another truck, this time near Kabul, finding more than 110 pounds of heroin. Soon after the seizure, United States investigators told other American officials that they had discovered links between the drug shipment and a bodyguard believed to be an intermediary for Ahmed Wali Karzai, according to a participant in the briefing.
The assertions about the involvement of the president’s brother in the incidents were never investigated, according to American and Afghan officials, even though allegations that he has benefited from narcotics trafficking have circulated widely in Afghanistan.
Both President Karzai and Ahmed Wali Karzai, now the chief of the Kandahar Provincial Council, the governing body for the region that includes Afghanistan’s second largest city, dismiss the allegations as politically motivated attacks by longtime foes.
UK: Government Will Spy on Every Call and E-mail
October 6th, 2008Mmm hmm.
Via: Telegraph:
Ministers are considering spending up to £12 billion on a database to monitor and store the internet browsing habits, e-mail and telephone records of everyone in Britain.
GCHQ, the government’s eavesdropping centre, has already been given up to £1 billion to finance the first stage of the project.
Hundreds of clandestine probes will be installed to monitor customers live on two of the country’s biggest internet and mobile phone providers – thought to be BT and Vodafone. BT has nearly 5m internet customers.
Ministers are braced for a backlash similar to the one caused by their ID cards programme. Dominic Grieve, the shadow home secretary, said: “Any suggestion of the government using existing powers to intercept communications data without public discussion is going to sound extremely sinister.”
Proud American
October 6th, 2008I’ve never smoked crack before, but I’d guess that watching Proud American would produce similar effects.
Nope, it’s not Idiocracy 2, but it is “Presented by CocaCola, MasterCard, American Airlines and WalMart.”
Research Credit: JF
Blackwater Weapon Found in Raid on Iraqi Insurgents
October 6th, 2008Via: ABC News:
An M4 machine gun [SIC] sent to Iraq by the Blackwater private security firm somehow disappeared from the company’s storage facility in Baghdad and was later discovered during a US military operation, apparently against suspected insurgents, people familiar with the situation have told ABC News.
The incident, in 2006, has been kept secret until now but it raised more questions about Blackwater’s operations in Iraq.
Allegations that Blackwater shipped weapons and silencers [SIC] to Iraq without proper licensing are already under investigation by a federal grand jury in North Carolina, according to people familiar with the case.
Blackwater says all of its weapons “are shipped in accordance with U.S. export control regulations.”
A separate federal grand jury in Washington, D.C. is investigating a shooting incident involving Blackwater guards that led to the deaths of 17 civilians. Indictments in that case could come as soon as next week, officials say.
Research Credit: cptmarginal
Iceland: Crash
October 6th, 2008Via: Guardian:
Iceland is on the brink of collapse. Inflation and interest rates are raging upwards. The krona, Iceland’s currency, is in freefall and is rated just above those of Zimbabwe and Turkmenistan. One of the country’s three independent banks has been nationalised, another is asking customers for money, and the discredited government and officials from the central bank have been huddled behind closed doors for three days with still no sign of a plan. International banks won’t send any more money and supplies of foreign currency are running out.
People talk about whether a new emergency unity government is needed and if the EU would fast-track the country to membership. On Friday the queues at the banks were huge, as people moved savings into the most secure accounts. Yesterday people were buying up supplies of olive oil and pasta after a supermarket spokesman announced on Friday night that they had no means of paying the foreign currency advances needed to import more foodstuffs.
Research Credit: ltcolonelnemo
