The Bush administration and Congress anxiously revived negotiations Friday on a $700 billion financial bailout, one day after the largest bank collapse in U.S. history provided a brutal reminder of the risks of failure.
"I'm convinced that by Sunday we will have an agreement that people can understand on this bill," predicted Massachusetts Rep. Barney Frank, a key Democrat in eight days of up-and-down talks designed to stave off an economic crisis.
House Speaker Nancy Pelosi added that "progress is being made," although neither she nor Frank divulged details at a late-afternoon news conference in the Capitol. Talks continued into the evening.
Frank and Pelosi spoke a few hours after President Bush prodded lawmakers to "rise to the occasion" - and quickly.
In one small sign of progress, House Republicans dispatched their second-ranking leader, Rep. Roy Blunt of Missouri, to join the talks after their objections to an emerging compromise had brought negotiations to a standstill the day before. They also demanded "serious consideration" for a plan of their own, involving less government intrusion and lower cost to the taxpayers than the $700 billion that Treasury Secretary Henry Paulson has been seeking.
The legislation the administration is promoting would allow the government to buy bad mortgages and other sour assets held by investors, most of them financial companies. That should make those companies more inclined to lend and lift a major weight off the national economy that is already sputtering. But a significant number of lawmakers, including many House conservatives, say they're against such heavy federal intervention.
Under their plan, the government would insure the distressed securities rather than buy them. Tax breaks would provide additional incentives to invest.
Democrats and Bush officials said the insurance proposal was acceptable as an option but not as a replacement for the administration's more sweeping approach.
The crisis was hardly limited to the U.S.
(AP) Senate Banking Committee Chairman Chris Dodd., D-Conn., right, listens as House Financial Services...
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Bush held a lengthy Oval Office meeting with British Prime Minister Gordon Brown that was focused on how the problems were spreading, then said, "I told him the plan is big enough to make a difference, and I believe it will be passed."
Presidential politics weighed heavily and unpredictably on the election-season effort to stave off a full-blown economic crisis.
After announcing earlier in the week he would suspend his campaign and return to the capital until there was an agreement, Republican John McCain abruptly reversed course and departed for Friday night's debate with Democratic rival Barack Obama.
"Now that Sen. McCain is safely in Mississippi we can get back to serious work," sniped Frank, who had challenged the Republican presidential candidate in a White House meeting on Thursday to describe his own solution to the crisis.
There were fresh signs of urgency at both the White House and the Capitol, one day after the unusually tempestuous White House session and the collapse of Washington Mutual, the largest failure in U.S. banking history. The Seattle-based institution had invested heavily in the now-moribund mortgage market.
(AP) Senate Banking Committee Chairman Chris Dodd., D-Conn., right, speaks to reporters with House...
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Still, the Dow Jones industrials rose 121 points for the day as investors anticipated a weekend agreement.
In days of negotiations, the administration has accepted demands from lawmakers to give Congress considerable authority to oversee the bailout. Additionally, Paulson relented to requests to limit the severance packages that corporate executives can receive from firms benefiting from the government bailout.
Also, rather than provide $700 billion upfront, as Paulson initially requested, Congress would approve the funds in stages. Under one approach, $250 billion would be made available at once, with the president able to certify the need for an additional $100 billion on his own authority. The final $350 billion would become available with a second presidential certification, although this time Congress would have authority to block it.
Any compromise is also expected to require the government to obtain partial ownership of any company it invests in.
Democrats, too, signaled they were considering jettisoning some of their own priorities.
(AP) President Bush delivers remarks to members of the media outside the Oval Office of the White House,...
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Frank indicated they might ultimately drop a requirement that a portion of any profits from the rescue be funneled to a fund to build housing for low-income people. That mandate, deeply unpopular with Republicans, "is not an essential," Frank said.
Additionally, Obama said earlier in the week he hoped Democrats would not press a proposal giving bankruptcy judges the power to ease mortgage terms for homeowners.
Beyond the specifics of any legislation lie political calculations in the shadow of hard-fought presidential and congressional campaigns.
While Democrats control a majority of both the House and Senate, their leaders have made it clear they will not force their rank-and-file to vote without Republican support on a bailout advanced by an unpopular president on an unwilling public.
In an Associated Press-Knowledge Networks poll, only 30 percent of those surveyed expressed support for Bush's package. An additional 45 percent were opposed, with 25 percent undecided. The survey was conducted Sept. 25 and had a margin of error or 3.8 percent. It was conducted over the Internet by Knowledge Networks, which initially contacted people using traditional telephone polling methods and followed with online interviews.
(AP) Senate Majority Leader Harry Reid, D-Nev., left, and Senate Banking, Housing and Urban Affairs...
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Aides to lawmakers in both parties say telephone calls from constituents are running heavily against the bailout - in some cases nearly 100-1 against, making the vote a potentially tricky one for a candidate in a competitive race.
Ironically, though, many House conservatives who are most opposed to the measure are in safe seats, thus free to resist the daily calls for action - and the warnings from Bush and Federal Reserve Chairman Ben Bernanke that a recession looms without a bailout.
"Our goal here in attempting to come to an agreement is to do our best to protect American taxpayers," said Republican leader John Boehner of Ohio, after a closed-door meeting other GOP lawmakers.
Inside the meeting, Boehner received a standing ovation from fellow Republicans, some of whom expressed anger that Bush and his administration had effectively shut them out of negotiations and tried to force them to support an unpopular bill.
"He got a standing ovation because he stood up to the president and Paulson," said Rep. Ray LaHood, R-Ill. "Now we're a part of the game."
Said Boehner, speaking of the White House meeting: "If they thought they were rolling me, they were kidding themselves."
2008-09-26
A bad day for the GOP on politics, bailout plan
Even for a party whose president suffers dismal approval ratings, whose legislative wing lost control of Congress and whose presidential nominee trails in the polls, it was a remarkably bad day for Republicans.
A White House summit meeting on Thursday meant to shore up John McCain's shaky campaign "devolved into a contentious shouting match." And that's how McCain's own campaign described it.
The meeting revealed that President Bush's $700 billion bid to combat the worst financial crisis in decades had been suddenly sidetracked by fellow Republicans in the House, who refused to embrace a plan that appeared close to acceptance by the Senate and most House Democrats.
Treasury Secretary Henry Paulson begged Democratic participants not to disclose how badly the meeting had gone, dropping to one knee in a teasing way to make his point according to witnesses.
And when Paulson hastily tried to revive talks in a nighttime meeting near the Senate chamber, the House's top Republican refused to send a negotiator.
"This is the president's own party," said Rep. Barney Frank, a top Democratic negotiator who attended both meetings. "I don't think a president has been repudiated so strongly by the congressional wing of his own party in a long time."
By midnight, it was hard to tell who had suffered a worse evening, Bush or McCain. McCain, eager to shore up his image as a leader who rises above partisanship, was undercut by a fierce political squabble within his own party's ranks.
The consequences could be worse for Bush, and for millions of Americans if the impasse sends financial markets tumbling, as some officials fear. Closed-door negotiations were to resume Friday, but it was unclear whether House Republicans would attend.
Republicans and Democrats alike seemed unsure which way McCain was leaning. His campaign's statement late Thursday shed little light.
(AP) Talking on his cell phone, Secretary of the Treasury Henry Paulson enters the Capitol for a late...
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"At this moment, the plan that has been put forth by the administration does not enjoy the confidence of the American people," it said. It was unclear whether McCain would attend Friday night's scheduled debate against Democratic nominee Barack Obama in Oxford, Miss.
Ordinarily a Republican president's problems are with Democrats, especially if they control the House and Senate. In this case, Bush seemed almost over that hurdle.
To be sure, Democrats demanded a number of changes in his $700 billion bailout plan, but administration insiders signaled they probably were acceptable. They included greater oversight, more protections for taxpayers, efforts to head off home foreclosures and piecemeal allocations of the federal money to buy toxic mortgage securities.
What caught some by surprise, either at the White House meeting or shortly before it, was the sudden momentum behind a dramatically different plan drafted by House conservatives with Minority Leader John Boehner's blessing.
Instead of the government buying the distressed securities, the new plan would have banks, financial firms and other investors that hold such loans pay the Treasury to insure them. Rep. Paul Ryan, R-Wisc., a chief sponsor, said it was clear that Bush's plan "was not going to pass the House."
(AP) President Bush, center, meets with Republican presidential candidate Sen. John McCain, R-Ariz., far...
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But Democrats said the same was true of the conservatives' plan. It calls for tax cuts and insurance provisions the majority party will not accept, they said.
At one point in the White House meeting, according to two officials, McCain voiced support for Ryan's criticisms of the administration's proposal. Frank, a gruff Massachusetts liberal, angrily demanded to know what plan McCain favored.
These officials also said that as tempers flared, Bush struggled at times to maintain control.
At one point, several minutes into the session, Obama said it was time to hear from McCain. According to a Republican who was there, "all he said was, 'I support the principles that House Republicans are fighting for.'"
Some at the table took that to mean the conservatives' alternative proposal, which stands little chance of passage.
A few hours later, Paulson and the handful of negotiators wearily headed for home. Frank told The Associated Press: "I did tell Secretary Paulson that this whole thing is at risk if the president can't get members of his own party to participate."
A White House summit meeting on Thursday meant to shore up John McCain's shaky campaign "devolved into a contentious shouting match." And that's how McCain's own campaign described it.
The meeting revealed that President Bush's $700 billion bid to combat the worst financial crisis in decades had been suddenly sidetracked by fellow Republicans in the House, who refused to embrace a plan that appeared close to acceptance by the Senate and most House Democrats.
Treasury Secretary Henry Paulson begged Democratic participants not to disclose how badly the meeting had gone, dropping to one knee in a teasing way to make his point according to witnesses.
And when Paulson hastily tried to revive talks in a nighttime meeting near the Senate chamber, the House's top Republican refused to send a negotiator.
"This is the president's own party," said Rep. Barney Frank, a top Democratic negotiator who attended both meetings. "I don't think a president has been repudiated so strongly by the congressional wing of his own party in a long time."
By midnight, it was hard to tell who had suffered a worse evening, Bush or McCain. McCain, eager to shore up his image as a leader who rises above partisanship, was undercut by a fierce political squabble within his own party's ranks.
The consequences could be worse for Bush, and for millions of Americans if the impasse sends financial markets tumbling, as some officials fear. Closed-door negotiations were to resume Friday, but it was unclear whether House Republicans would attend.
Republicans and Democrats alike seemed unsure which way McCain was leaning. His campaign's statement late Thursday shed little light.
(AP) Talking on his cell phone, Secretary of the Treasury Henry Paulson enters the Capitol for a late...
Full Image
"At this moment, the plan that has been put forth by the administration does not enjoy the confidence of the American people," it said. It was unclear whether McCain would attend Friday night's scheduled debate against Democratic nominee Barack Obama in Oxford, Miss.
Ordinarily a Republican president's problems are with Democrats, especially if they control the House and Senate. In this case, Bush seemed almost over that hurdle.
To be sure, Democrats demanded a number of changes in his $700 billion bailout plan, but administration insiders signaled they probably were acceptable. They included greater oversight, more protections for taxpayers, efforts to head off home foreclosures and piecemeal allocations of the federal money to buy toxic mortgage securities.
What caught some by surprise, either at the White House meeting or shortly before it, was the sudden momentum behind a dramatically different plan drafted by House conservatives with Minority Leader John Boehner's blessing.
Instead of the government buying the distressed securities, the new plan would have banks, financial firms and other investors that hold such loans pay the Treasury to insure them. Rep. Paul Ryan, R-Wisc., a chief sponsor, said it was clear that Bush's plan "was not going to pass the House."
(AP) President Bush, center, meets with Republican presidential candidate Sen. John McCain, R-Ariz., far...
Full Image
But Democrats said the same was true of the conservatives' plan. It calls for tax cuts and insurance provisions the majority party will not accept, they said.
At one point in the White House meeting, according to two officials, McCain voiced support for Ryan's criticisms of the administration's proposal. Frank, a gruff Massachusetts liberal, angrily demanded to know what plan McCain favored.
These officials also said that as tempers flared, Bush struggled at times to maintain control.
At one point, several minutes into the session, Obama said it was time to hear from McCain. According to a Republican who was there, "all he said was, 'I support the principles that House Republicans are fighting for.'"
Some at the table took that to mean the conservatives' alternative proposal, which stands little chance of passage.
A few hours later, Paulson and the handful of negotiators wearily headed for home. Frank told The Associated Press: "I did tell Secretary Paulson that this whole thing is at risk if the president can't get members of his own party to participate."
2008-09-23
rambling
I spent yesterday at the Renfest with my daughter. It freaks me a little that some of you already know that. It freaks me more that any of you actually care.
8:40 am and I am doing this instead of things that need doing more. i could blame that on you all. You are interesting and you do share love often. Perhaps it's your fault that I am fascinated with you and with this interaction. That it draws me. That sometimes you draw me.
I'm standing at the fair sniffing things at a booth of smelly oils. I'm totally with Julia standing there. But Melissa is also standing next to me in a way, in whispering echos. Suddenly i am actually trying to split scents with my nose and identify their memory, or their origin. I actually get a few.
I see a tattoo go by and the goddess she has on her arms is a lot like CC's avatar. So there she is for a moment.
I can't begin to count the Martin guitars hanging around necks. But Kate comes to mind with each one of them, and I have no idea that she is a Martin person, while being sure she is. And then there are the bare feet....
I see the half naked and reckless pickle guys being entirely themselves, and Sex Mahoney is standing there (go read his current blog by the way. The best of his I have ever read.) going on in graphic detail about the uses and placement of pickles.
Even the rubenesque Lilliputians in their baubles have entirely new hotness. I find myself searching their faces for one exact face. It's not there, that face, and yet somehow you are.
Crazy clingy new lovers wandering connected like hot glass, stretching and glimmering, attached to anything like long bare legs and I am tempted to walk up and say "Allison?"
I'm not even gonna mention long dark black hair. Shit. just did. But when you only know a thing, or two about how a friend looks, dresses, walks, they kind of bleed over with wondering into lots of silly little connections attached to other women's flowing tresses.
I also won't wonder why the patron saint of sarcasm is posing as a variety of wench's in Minnesota. My guess is that she simply can't help it.
This then, is my life on myspace. I carry you around, in the background. I'm good with that. I like it. I feel you as friends, as people. I trust that.
My words here, they carrie a little too much weight sometimes. Like gold, you give them, and me, a little too much value sometimes. Like gold, I'm just a metal. Rellly no more valuable than other metals. It just causes a facination sometimes. Some people are caught by it.
Try starting your car with a piece of me. Not gonna happen.
So here's the wrap up. I'm gonna dissapear for a few days. Self dicipline is what will be my motivation. I need to clean up some things that I have let go.
In the old days when you spent gold, you simply chunked off a bit big enough to pay, or bit a piece off a coin that was too much. I have been doing that alot.
I don't regret a single thing I've spent myself on. That includes myspace, and all of you. I could lay my facination and my time spent just like this on you, or on my supposed need for approval. But it would be total crap.
I stood at the booth and sniffed with Julia at a fragrance called "constant change".
It was attractive and we both liked it. i almost bought it. We could pick three, for 20.00. She had chosen a lovely lilac scent. I sniffed lots of things, we left and came back, and finally i asked the question.
Do you have something that smells like smoke? Birch is what it's called. Heavy wood smoke from a forest fire kind of smell. A little bit of autumn leaves. I thought life when I picked it again. See, I own that I picked it the first time. I picked the fire.
There was this other smell that I kept coming back to. Dark and complex. In moments sweet, and yet with a different scent on each sniff. Something different comes out. It was my third. I did not register the word at all despite looking at the bottle a dozen times. I actually asked what it was.
On the way home, Julia was taking scents and mentioned it by name. I said "i didn't buy that, did I?" She just looks at me. "Dad, the stuff you bought is called Bard." (get off the floor, David. It's not that funny)
I'm going from here for a few days. It's not a fault in myspace, or you, or me. It's simply the understanding that my choices this week need to make cents, and sense and scents. It's not you, and it's not myspace. It's me.
So the wordfast begins with me tearing myself from this keyboard and moving towards the analog world full of people who want the foreground.
I'll be back. I have some cleaning up to do.
completely dale.
P.S. If i didn't mention you, it was probibly not because i didn't think of you. For instance,the knife thrower with the bad german accent brought Steve to mind, but I was not sure if I should mention it.... He did hit a guy with a blade....
And also I wanted to mention a guy who has been a one of my hero's for years. Joe Kudla passed away this summer. He was half of my all time favorite comedy act, Puke and Snot. I can remember standing in the rain with these guys at the Colorado fair two wives ago. I quote them here often. So this blog's a little for Joe. On the bright side, one of my bucket list jobs just opened up...
God rest his damned funny soul.. he said a lot of things worth going to hell over....
Find Real Lovers
8:40 am and I am doing this instead of things that need doing more. i could blame that on you all. You are interesting and you do share love often. Perhaps it's your fault that I am fascinated with you and with this interaction. That it draws me. That sometimes you draw me.
I'm standing at the fair sniffing things at a booth of smelly oils. I'm totally with Julia standing there. But Melissa is also standing next to me in a way, in whispering echos. Suddenly i am actually trying to split scents with my nose and identify their memory, or their origin. I actually get a few.
I see a tattoo go by and the goddess she has on her arms is a lot like CC's avatar. So there she is for a moment.
I can't begin to count the Martin guitars hanging around necks. But Kate comes to mind with each one of them, and I have no idea that she is a Martin person, while being sure she is. And then there are the bare feet....
I see the half naked and reckless pickle guys being entirely themselves, and Sex Mahoney is standing there (go read his current blog by the way. The best of his I have ever read.) going on in graphic detail about the uses and placement of pickles.
Even the rubenesque Lilliputians in their baubles have entirely new hotness. I find myself searching their faces for one exact face. It's not there, that face, and yet somehow you are.
Crazy clingy new lovers wandering connected like hot glass, stretching and glimmering, attached to anything like long bare legs and I am tempted to walk up and say "Allison?"
I'm not even gonna mention long dark black hair. Shit. just did. But when you only know a thing, or two about how a friend looks, dresses, walks, they kind of bleed over with wondering into lots of silly little connections attached to other women's flowing tresses.
I also won't wonder why the patron saint of sarcasm is posing as a variety of wench's in Minnesota. My guess is that she simply can't help it.
This then, is my life on myspace. I carry you around, in the background. I'm good with that. I like it. I feel you as friends, as people. I trust that.
My words here, they carrie a little too much weight sometimes. Like gold, you give them, and me, a little too much value sometimes. Like gold, I'm just a metal. Rellly no more valuable than other metals. It just causes a facination sometimes. Some people are caught by it.
Try starting your car with a piece of me. Not gonna happen.
So here's the wrap up. I'm gonna dissapear for a few days. Self dicipline is what will be my motivation. I need to clean up some things that I have let go.
In the old days when you spent gold, you simply chunked off a bit big enough to pay, or bit a piece off a coin that was too much. I have been doing that alot.
I don't regret a single thing I've spent myself on. That includes myspace, and all of you. I could lay my facination and my time spent just like this on you, or on my supposed need for approval. But it would be total crap.
I stood at the booth and sniffed with Julia at a fragrance called "constant change".
It was attractive and we both liked it. i almost bought it. We could pick three, for 20.00. She had chosen a lovely lilac scent. I sniffed lots of things, we left and came back, and finally i asked the question.
Do you have something that smells like smoke? Birch is what it's called. Heavy wood smoke from a forest fire kind of smell. A little bit of autumn leaves. I thought life when I picked it again. See, I own that I picked it the first time. I picked the fire.
There was this other smell that I kept coming back to. Dark and complex. In moments sweet, and yet with a different scent on each sniff. Something different comes out. It was my third. I did not register the word at all despite looking at the bottle a dozen times. I actually asked what it was.
On the way home, Julia was taking scents and mentioned it by name. I said "i didn't buy that, did I?" She just looks at me. "Dad, the stuff you bought is called Bard." (get off the floor, David. It's not that funny)
I'm going from here for a few days. It's not a fault in myspace, or you, or me. It's simply the understanding that my choices this week need to make cents, and sense and scents. It's not you, and it's not myspace. It's me.
So the wordfast begins with me tearing myself from this keyboard and moving towards the analog world full of people who want the foreground.
I'll be back. I have some cleaning up to do.
completely dale.
P.S. If i didn't mention you, it was probibly not because i didn't think of you. For instance,the knife thrower with the bad german accent brought Steve to mind, but I was not sure if I should mention it.... He did hit a guy with a blade....
And also I wanted to mention a guy who has been a one of my hero's for years. Joe Kudla passed away this summer. He was half of my all time favorite comedy act, Puke and Snot. I can remember standing in the rain with these guys at the Colorado fair two wives ago. I quote them here often. So this blog's a little for Joe. On the bright side, one of my bucket list jobs just opened up...
God rest his damned funny soul.. he said a lot of things worth going to hell over....
Find Real Lovers
Week of the Comet
Every now and then, don't they just get on your nerves?
I'm talking about people. People standing behind you at the deli, yapping on their cell phones. People with leafblowers. Bad drivers who can sour a routine drive to work by cutting you off or driving mid-lane (they're talking .. phones, too. Or texting each other.) The workers who've been tearing up the street for the past two months to lay new water pipes. The friends who call and call with tearful romantic dramas. Then there are the people at work who make you wish you could take a vacation -- not because you have someplace to go, but because you just want to get away from *them.*
I used to love a certain genre of sci-fi movie -- the kind where everyone on the planet is killed off except for a handful of people. There was a movie called "Night of the Comet" that I saw when I was young. It was about two teenaged girls who manage to survive after a comet passes earth and turns everyone they know into little piles of chalk dust. I loved that film! There were others, too. Stephen King's "The Stand." And recently, "I Legend." But in these films, there's always another force to contend with. Usually flesh-eating zombies. Or in the case of "The Stand," a mean guy with horns and a tail who sets up shop in Vegas. Avoiding flesh-eating zombies and the Devil will suck all the fun of having the planet all to yourself.
I used to imagine being one of the last people on the planet. But not forever, only for a little while, just to give me time to regroup. In my scenario, aliens would come to earth and transport the entire population onto their ship. Of course, because even the scientific methods of the most advanced civilization has a small margin of error, they'd miss a few heads. Like me and a handful of others. Of course, the others would be located in Kansas City, Maui, and some small bunksville in the Appalachian mountains, so they're not going to get in my hair. Maybe the aliens would post a sign on the city limits sign: "Dear Earthlings We Might Have Missed: We have taken your people for seven earth days. They will be returned to you unharmed after experimentation is complete. They will remember nothing. Have a nonthreatening week and remember to consume all perishable items first. Love, Zygor and Cystos. P.S. Don't tell anyone we were here."
Aw, wasn't that nice of them to give you the heads up?
I know that I'd do after the Happy Dance. I'd pop into one of those small electric cars that I see displayed on a lot on Lamar Boulevard (I don't know who buys these other than people who live in retirement communities) and use that as my transportation. First thing we do is ... eat all the sushi! Fish goes bad really fast. Ah, but where to go? Tokyo, Kyoto, Ichiban, Uchi? Kenichi has the best atmosphere, and it's always packed. That's why I never go there to begin with. What fun -- to be able to handle all those cool, sharp knives and make my own specialty rolls. I'll bet I'd suck at it; I'd probably end up with something that resembles an hor d'oeuvre from one of those creepy 1950's recipe books. Ah, watch those fingers, though -- ain't no one at the walk-in clinic to stitch me up if I get overly-zealous and accidentally cut off a digit.
A trip to Whole Foods is next. In my most beautiful fantasies, I imagine getting a coveted parking place on the store level. Pushing my cart down the aisles without having to navigate my way around the hippies who are mesmerized by the dazzling array of spelt breads and fish oil caplets. Look what we have here ... organic salad mix. White Israeli cheese. Handmade chocolates. Those tiny little tarts behind glass -- key lime, lemon meringue, chocolate cheesecake. Oh yes .... all MINE. I'd lavish every last carton of blueberries on top of the heap. Needless to say, check-out's a breeze and no one tries to sell me a recycling bag.
Nights can get lonely without other people around. Nights can get really dull. A trip to the movie theatre could be fun. Imagine seeing your favorite first-run film all by yourself. Accompanied only by your Whole Foods organic sodas and chocolate bars. But ... figuring out how to work all that equipment could turn out to be a pain in the ass; why waste an entire week just for two hours of titillation? That's why I'd tool down to the weird little DVD rental place on South Congress. The one I never go to because their late fees are too ridiculous to mention, and Blockbuster always gives me a free walk on those. I'd pick out every arcane documentary I'd ever wanted to see. The entire collection of "The Outer Limits." Hey, it's been a while since I've seen a John Hughes film. Let's get some of those, eh?
It's every woman's dream to have the mall to herself for just one day. Sure, I could do that. But I could also putter around from one expensive specialty boutique to another -- the places where the S.A.'s don't bother to ask if they can help me with anything. It's like they can see through my wallet and into the strip of my debit card, and they know that I don't have the kind of financial juice to buy a pair of $500 jeans. But now? Yes, I'll try those on, please. And everything else that's ridiculously cost-prohibitive. I'll even try on that $900 crystal-studded bikini. Without my underwear on. Yes, it's true. I'd do it.
In my gaudy, sparkling bikini, I'd kayak around Town Lake. I'd bring along a few big bags of rubber duckies and set them out randomly. When the rest of the people get back, they're going to really wonder about those, aren't they? Ah, privacy! Isn't this just the bliss? No shrieking kids. No dogs off-the-leash to leave a trail of turds in my wake. No gaggle of tourists lined up on the Congress Avenue bridge watching for those damned bats. I'd get a bird's eye view of the suckers when they flew out at nightfall. Without the gratuitous catcalls. Then I could take a detour to Taniguchi Japanese Gardens and splash around with the giant coi. Poor things need to be fed. Aw, here big guys -- I'll share my spelt bread.
Now might also be the time to get some writing done. I know just the place to do that. I'd grab my laptop and zip down to the Capitol and park in the Lt. Governor's designated space, right in front. Then I'd go to the house chambers and take a seat in back of the podium, in one of the Comfortable Chairs. I'd hammer out a chapter or two there. If perhaps this ever gets published, I'll have a good story behind it. On my way out, I'd take a leisurely tour of the rotunda. Maybe blow raspberries at some of the portraits just for shits and giggles. Hey, it's not like anyone's looking, right?
I'd go to every museum and art gallery that I previously bypassed before because I saw a long line snaking out the door.
Speaking of laptops, now might be the time to go to the Apple store and play with all the newest computers, iPods and iPhones without some pesky salesperson hovering over my shoulder. That would kill a lot of time. Of course, this would mean going to the mall. I don't like malls. It has nothing to do with crowds, I just dislike them. But since I'm already there, I'd probably take a nap on that high-dollar memory foam mattress at Macy's. Just to see how that works out for me.
You know what else I'd do? I'd take my week to respond to the months of text messages, emails and cell phone calls that I hadn't replied to. Because everyone else is on a big spaceship dressed in orange gowns no doubt consuming small tasteless green cubes for dinner, no one's around to respond. But hey, that's what voicemail is for. There'd be a couple of people ... let's just say I'd be tempted to eschew alien instruction and leave them a message: "Hey, jackass, how's the brain probe going? I'm sewing raw shrimp into your curtains right now. Take some pictures of the galaxy with your cell phone for me, eh?"
After about a week, I think I'd be ready to face the rest of civilization again. Wouldn't you? You'd probably miss your friends and family. But for every menace driver on the road and loud cell phone yapper, there are those people in your community who you might not know very well, but who you'd miss if you didn't see their faces. These are the people who keep you fed and watered. There's the pharmacist at the corner drugstore -- I've been going to that drugstore for almost twenty years now -- and the happy grill chef working behind the soda fountain who makes the best burgers in Austin. I'd miss the tinkling bell of the paletta vendor who passes by under my porch each afternoon. I'd really miss that a lot.
There's also Jason the sandwich guy. He works at the neighborhood market. Maybe he doesn't think much of his job, but I do. Using regular store-brand bread and Boarshead turkey, the man makes some of the finest sandwiches I've ever tasted. The guys at the local coffee shop. The start making my usual iced coffee drink as soon as they see me come through the door. In my neighborhood, everyone knows me by name. Doesn't that feel good -- to know that people know you? To feel that fond appreciation for them?
idiot traffic, leaf-blowers, and school crossing guards are a small price to pay for the comfort that other humans provide. Maybe I'll pass on my Week of the Comet. I wouldn't have any idea how to make an iced latte.
If you had a Week of the Comet, what would *you* do? Aside from those close to you, who do you think that you'd miss if you were alone on the planet? What's your favorite "Where Have All the People Gone?"-style movie?
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I'm talking about people. People standing behind you at the deli, yapping on their cell phones. People with leafblowers. Bad drivers who can sour a routine drive to work by cutting you off or driving mid-lane (they're talking .. phones, too. Or texting each other.) The workers who've been tearing up the street for the past two months to lay new water pipes. The friends who call and call with tearful romantic dramas. Then there are the people at work who make you wish you could take a vacation -- not because you have someplace to go, but because you just want to get away from *them.*
I used to love a certain genre of sci-fi movie -- the kind where everyone on the planet is killed off except for a handful of people. There was a movie called "Night of the Comet" that I saw when I was young. It was about two teenaged girls who manage to survive after a comet passes earth and turns everyone they know into little piles of chalk dust. I loved that film! There were others, too. Stephen King's "The Stand." And recently, "I Legend." But in these films, there's always another force to contend with. Usually flesh-eating zombies. Or in the case of "The Stand," a mean guy with horns and a tail who sets up shop in Vegas. Avoiding flesh-eating zombies and the Devil will suck all the fun of having the planet all to yourself.
I used to imagine being one of the last people on the planet. But not forever, only for a little while, just to give me time to regroup. In my scenario, aliens would come to earth and transport the entire population onto their ship. Of course, because even the scientific methods of the most advanced civilization has a small margin of error, they'd miss a few heads. Like me and a handful of others. Of course, the others would be located in Kansas City, Maui, and some small bunksville in the Appalachian mountains, so they're not going to get in my hair. Maybe the aliens would post a sign on the city limits sign: "Dear Earthlings We Might Have Missed: We have taken your people for seven earth days. They will be returned to you unharmed after experimentation is complete. They will remember nothing. Have a nonthreatening week and remember to consume all perishable items first. Love, Zygor and Cystos. P.S. Don't tell anyone we were here."
Aw, wasn't that nice of them to give you the heads up?
I know that I'd do after the Happy Dance. I'd pop into one of those small electric cars that I see displayed on a lot on Lamar Boulevard (I don't know who buys these other than people who live in retirement communities) and use that as my transportation. First thing we do is ... eat all the sushi! Fish goes bad really fast. Ah, but where to go? Tokyo, Kyoto, Ichiban, Uchi? Kenichi has the best atmosphere, and it's always packed. That's why I never go there to begin with. What fun -- to be able to handle all those cool, sharp knives and make my own specialty rolls. I'll bet I'd suck at it; I'd probably end up with something that resembles an hor d'oeuvre from one of those creepy 1950's recipe books. Ah, watch those fingers, though -- ain't no one at the walk-in clinic to stitch me up if I get overly-zealous and accidentally cut off a digit.
A trip to Whole Foods is next. In my most beautiful fantasies, I imagine getting a coveted parking place on the store level. Pushing my cart down the aisles without having to navigate my way around the hippies who are mesmerized by the dazzling array of spelt breads and fish oil caplets. Look what we have here ... organic salad mix. White Israeli cheese. Handmade chocolates. Those tiny little tarts behind glass -- key lime, lemon meringue, chocolate cheesecake. Oh yes .... all MINE. I'd lavish every last carton of blueberries on top of the heap. Needless to say, check-out's a breeze and no one tries to sell me a recycling bag.
Nights can get lonely without other people around. Nights can get really dull. A trip to the movie theatre could be fun. Imagine seeing your favorite first-run film all by yourself. Accompanied only by your Whole Foods organic sodas and chocolate bars. But ... figuring out how to work all that equipment could turn out to be a pain in the ass; why waste an entire week just for two hours of titillation? That's why I'd tool down to the weird little DVD rental place on South Congress. The one I never go to because their late fees are too ridiculous to mention, and Blockbuster always gives me a free walk on those. I'd pick out every arcane documentary I'd ever wanted to see. The entire collection of "The Outer Limits." Hey, it's been a while since I've seen a John Hughes film. Let's get some of those, eh?
It's every woman's dream to have the mall to herself for just one day. Sure, I could do that. But I could also putter around from one expensive specialty boutique to another -- the places where the S.A.'s don't bother to ask if they can help me with anything. It's like they can see through my wallet and into the strip of my debit card, and they know that I don't have the kind of financial juice to buy a pair of $500 jeans. But now? Yes, I'll try those on, please. And everything else that's ridiculously cost-prohibitive. I'll even try on that $900 crystal-studded bikini. Without my underwear on. Yes, it's true. I'd do it.
In my gaudy, sparkling bikini, I'd kayak around Town Lake. I'd bring along a few big bags of rubber duckies and set them out randomly. When the rest of the people get back, they're going to really wonder about those, aren't they? Ah, privacy! Isn't this just the bliss? No shrieking kids. No dogs off-the-leash to leave a trail of turds in my wake. No gaggle of tourists lined up on the Congress Avenue bridge watching for those damned bats. I'd get a bird's eye view of the suckers when they flew out at nightfall. Without the gratuitous catcalls. Then I could take a detour to Taniguchi Japanese Gardens and splash around with the giant coi. Poor things need to be fed. Aw, here big guys -- I'll share my spelt bread.
Now might also be the time to get some writing done. I know just the place to do that. I'd grab my laptop and zip down to the Capitol and park in the Lt. Governor's designated space, right in front. Then I'd go to the house chambers and take a seat in back of the podium, in one of the Comfortable Chairs. I'd hammer out a chapter or two there. If perhaps this ever gets published, I'll have a good story behind it. On my way out, I'd take a leisurely tour of the rotunda. Maybe blow raspberries at some of the portraits just for shits and giggles. Hey, it's not like anyone's looking, right?
I'd go to every museum and art gallery that I previously bypassed before because I saw a long line snaking out the door.
Speaking of laptops, now might be the time to go to the Apple store and play with all the newest computers, iPods and iPhones without some pesky salesperson hovering over my shoulder. That would kill a lot of time. Of course, this would mean going to the mall. I don't like malls. It has nothing to do with crowds, I just dislike them. But since I'm already there, I'd probably take a nap on that high-dollar memory foam mattress at Macy's. Just to see how that works out for me.
You know what else I'd do? I'd take my week to respond to the months of text messages, emails and cell phone calls that I hadn't replied to. Because everyone else is on a big spaceship dressed in orange gowns no doubt consuming small tasteless green cubes for dinner, no one's around to respond. But hey, that's what voicemail is for. There'd be a couple of people ... let's just say I'd be tempted to eschew alien instruction and leave them a message: "Hey, jackass, how's the brain probe going? I'm sewing raw shrimp into your curtains right now. Take some pictures of the galaxy with your cell phone for me, eh?"
After about a week, I think I'd be ready to face the rest of civilization again. Wouldn't you? You'd probably miss your friends and family. But for every menace driver on the road and loud cell phone yapper, there are those people in your community who you might not know very well, but who you'd miss if you didn't see their faces. These are the people who keep you fed and watered. There's the pharmacist at the corner drugstore -- I've been going to that drugstore for almost twenty years now -- and the happy grill chef working behind the soda fountain who makes the best burgers in Austin. I'd miss the tinkling bell of the paletta vendor who passes by under my porch each afternoon. I'd really miss that a lot.
There's also Jason the sandwich guy. He works at the neighborhood market. Maybe he doesn't think much of his job, but I do. Using regular store-brand bread and Boarshead turkey, the man makes some of the finest sandwiches I've ever tasted. The guys at the local coffee shop. The start making my usual iced coffee drink as soon as they see me come through the door. In my neighborhood, everyone knows me by name. Doesn't that feel good -- to know that people know you? To feel that fond appreciation for them?
idiot traffic, leaf-blowers, and school crossing guards are a small price to pay for the comfort that other humans provide. Maybe I'll pass on my Week of the Comet. I wouldn't have any idea how to make an iced latte.
If you had a Week of the Comet, what would *you* do? Aside from those close to you, who do you think that you'd miss if you were alone on the planet? What's your favorite "Where Have All the People Gone?"-style movie?
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The Decline Of Western Civilization As We Know It
As America's Financial Institutions crumble, it's economy takes a dump the size of Karl Rove's head, and Mortgage Foreclosures soar, we find Vapid McStupid, and Carrie McChristian, two middle class, Minivan driving, QVC-Clad Soccer Moms, enjoying an afternoon of shopping, dishing the dirt, and compelling Political discussion, over a couple of Venti Soy Chai's at the local Java The Cup......
Vapid McStupid:
"Like, OH EM GEE, aren't her glasses THE CUTEST things you've ever SEEN!?"
Carrie McChristian:
"OH EM GEE.....they are like....SO ADORABLE!"
VM:
"Isn't it totally rad that like, a woman, could like, be, like, PrEzIdUnT someday, I mean, like men think that THEY are the only ones qualified to lead!"
CM:
"Totally...my nail technician Barbie, is like TOTALLY into her...she said she'll have THE BEST HAIR EVER to be, like on the head of someone who like, LIVES in the White House!"
VM:
"Really! I'm am getting sooooo tired of all these like really smart people saying that she's TOTALLY not qualified to be Vice President. I mean, like she was a Mayor or something, right?
CM:
"Yeah, she's like the Governor or something of the ENTIRE COUNTRY of Alaska!"
VN:
"The WHOLE COUNTRY of Alaska? KEWL! I thinks it's SOOO sweet that she like, isn't letting her daughter get an abortion, I mean yeah...Bristol is gonna have like really bad stretch marks and stuff, but like...she has a built in HUSBAND already!'
CM:
"Awesome, she'll never have to cruise the bars and stuff like we did, she already has a man, and he's like got a job and stuff!! I think he works at the Sip 'n Suck making shakes!"
VM:
"That's kewl...at least he's got a job. I mean, ok....he did cut the brake lines on a School Bus, and that could have been like...TOTALLY bad if it had like, crashed or something, but kids will be kids...it's not like he shot someone in the face or something really dumb like that"
CM:
"Totally, I just wish people would leave her alone...there is actually a chance to have a WOMAN in the White House, I mean....finally someone I can identify with!"
VM:
"Yeah, I mean...like....I've totally had like Jungle Fever at times....I'd do Denzel Washington in a MINUTE, but like, I can't identify with that Obama guy. I mean, like, he totally went to like Harvard, and my Husband told me that that makes him an East Coast Liberal Elitist who we can't identify with, and that's like sooo true, he is like WAY too smart for me....I can't understand A WORD he says about like the econo...ecmon....econmo.....like money and stuff.....he just thinks he's so smart!"
CM:
"I know, that's why I like Sarah Palin and that old dude she's running with, they don't talk about ANY of that stuff!! I'm sick of hearing about War stuff and like budget deficits, and education, it's so depressing!!"
VM:
"Really...ugh....that Obama guy is always talking about stuff that needs to be fixed, and "making things better"...what could be better than a woman in the White House that wears cute GLASSES!?
CM:
"It'll be like so cool if she gets elected. She's gonna make our schools teach kids that they were created!! Isn't that awesome? I mean, my Brother TOTALLY looks like a Monkey, but PUH--LEEZ!"
VM:
"Yeah, and she'll like TOTALLY make that Librarian at school that I hate so much, get rid of all those icky books that I hate!" Who reads all that intellectual mumbo-jumbo anyway.....Sara Palin likes HARLEQUINS!"
CM:
"Gawd, that'll be AWESOME....now we can force our kids to read what Sarah thinks is best for them...that'll like make my job SO MUCH easier....I'll have time to shop for more glasses and go get a new Palin-Do every week!"
VM:
"OH EM GEE...this is gonna be like the BEST COUNTRY EVER!"
CM:
"I know, it'll like totally suck if that black dude wins, then I'll have to pay attention to my kids, rather than let the President and Vice President teach them about religion and tell them what is acceptable reading....I mean like....being a parent is HARD....it's so much easier when my Government and my Church tells me how to do things....then I have more time to shop...YAY!"
VM:
"My husband says that if that Obama guy wins, Schools will be teaching my kids how to be gay! I mean, I don't totally hate gay people, I had a totally lesbian friend once, but my husband told me I shouldn't be friends with her anymore because a guy he works with at Fox News told him that another guy he knows once told him that Karl Rove said that gays are trying to convert all children into like.....Gaydom or something, and that isn't cool. I mean, if you want to tie a gay person to a fence in Wyoming and beat them to death, isn't it like in the Constitution or something that it's okay?"
CM:
"Ummm...I guess...I think that's the Freedom To Choose thing I always hear about on that weird station on my car radio...they always talk like really smart people too...just like Obama does...it's like...NPR or something"
VM:
"Well, anyway, I totally have to run....I have a tanning session at 1:00, I'm having my lips plumped at 1:45, my spider veins injected with "Invisa-Gel" youth serum at 2:15, The Ann Coulter book signing at 3:00.....and....oh SHIT!!!......like I'm totally supposed to take my daughter to a "Let's Put A Vagina In The White House At Any Cost" Rally over at my Church, "The Divine Order of Hypocrisy and Total Unmitgated Bullshit" at 4:00!!! Can you pick her up for me???"
CM:
"Sure sweetie.....the nanny is taking care of my kids today....I'll be happy to pick her up for you, but I have to call first....I just want to make sure that the housekeeper took my little angel to her "abstinence-only" sex-ed class, BEFORE she takes her to the OB-GYN for her ultrasound....I'm gonna be a good Mom and make sure my 13 year old's baby is healthy!"
VM:
"Okay...you're a doll...thanks.....and GUURRLL POWER!!!"
Vapid McStupid:
"Like, OH EM GEE, aren't her glasses THE CUTEST things you've ever SEEN!?"
Carrie McChristian:
"OH EM GEE.....they are like....SO ADORABLE!"
VM:
"Isn't it totally rad that like, a woman, could like, be, like, PrEzIdUnT someday, I mean, like men think that THEY are the only ones qualified to lead!"
CM:
"Totally...my nail technician Barbie, is like TOTALLY into her...she said she'll have THE BEST HAIR EVER to be, like on the head of someone who like, LIVES in the White House!"
VM:
"Really! I'm am getting sooooo tired of all these like really smart people saying that she's TOTALLY not qualified to be Vice President. I mean, like she was a Mayor or something, right?
CM:
"Yeah, she's like the Governor or something of the ENTIRE COUNTRY of Alaska!"
VN:
"The WHOLE COUNTRY of Alaska? KEWL! I thinks it's SOOO sweet that she like, isn't letting her daughter get an abortion, I mean yeah...Bristol is gonna have like really bad stretch marks and stuff, but like...she has a built in HUSBAND already!'
CM:
"Awesome, she'll never have to cruise the bars and stuff like we did, she already has a man, and he's like got a job and stuff!! I think he works at the Sip 'n Suck making shakes!"
VM:
"That's kewl...at least he's got a job. I mean, ok....he did cut the brake lines on a School Bus, and that could have been like...TOTALLY bad if it had like, crashed or something, but kids will be kids...it's not like he shot someone in the face or something really dumb like that"
CM:
"Totally, I just wish people would leave her alone...there is actually a chance to have a WOMAN in the White House, I mean....finally someone I can identify with!"
VM:
"Yeah, I mean...like....I've totally had like Jungle Fever at times....I'd do Denzel Washington in a MINUTE, but like, I can't identify with that Obama guy. I mean, like, he totally went to like Harvard, and my Husband told me that that makes him an East Coast Liberal Elitist who we can't identify with, and that's like sooo true, he is like WAY too smart for me....I can't understand A WORD he says about like the econo...ecmon....econmo.....like money and stuff.....he just thinks he's so smart!"
CM:
"I know, that's why I like Sarah Palin and that old dude she's running with, they don't talk about ANY of that stuff!! I'm sick of hearing about War stuff and like budget deficits, and education, it's so depressing!!"
VM:
"Really...ugh....that Obama guy is always talking about stuff that needs to be fixed, and "making things better"...what could be better than a woman in the White House that wears cute GLASSES!?
CM:
"It'll be like so cool if she gets elected. She's gonna make our schools teach kids that they were created!! Isn't that awesome? I mean, my Brother TOTALLY looks like a Monkey, but PUH--LEEZ!"
VM:
"Yeah, and she'll like TOTALLY make that Librarian at school that I hate so much, get rid of all those icky books that I hate!" Who reads all that intellectual mumbo-jumbo anyway.....Sara Palin likes HARLEQUINS!"
CM:
"Gawd, that'll be AWESOME....now we can force our kids to read what Sarah thinks is best for them...that'll like make my job SO MUCH easier....I'll have time to shop for more glasses and go get a new Palin-Do every week!"
VM:
"OH EM GEE...this is gonna be like the BEST COUNTRY EVER!"
CM:
"I know, it'll like totally suck if that black dude wins, then I'll have to pay attention to my kids, rather than let the President and Vice President teach them about religion and tell them what is acceptable reading....I mean like....being a parent is HARD....it's so much easier when my Government and my Church tells me how to do things....then I have more time to shop...YAY!"
VM:
"My husband says that if that Obama guy wins, Schools will be teaching my kids how to be gay! I mean, I don't totally hate gay people, I had a totally lesbian friend once, but my husband told me I shouldn't be friends with her anymore because a guy he works with at Fox News told him that another guy he knows once told him that Karl Rove said that gays are trying to convert all children into like.....Gaydom or something, and that isn't cool. I mean, if you want to tie a gay person to a fence in Wyoming and beat them to death, isn't it like in the Constitution or something that it's okay?"
CM:
"Ummm...I guess...I think that's the Freedom To Choose thing I always hear about on that weird station on my car radio...they always talk like really smart people too...just like Obama does...it's like...NPR or something"
VM:
"Well, anyway, I totally have to run....I have a tanning session at 1:00, I'm having my lips plumped at 1:45, my spider veins injected with "Invisa-Gel" youth serum at 2:15, The Ann Coulter book signing at 3:00.....and....oh SHIT!!!......like I'm totally supposed to take my daughter to a "Let's Put A Vagina In The White House At Any Cost" Rally over at my Church, "The Divine Order of Hypocrisy and Total Unmitgated Bullshit" at 4:00!!! Can you pick her up for me???"
CM:
"Sure sweetie.....the nanny is taking care of my kids today....I'll be happy to pick her up for you, but I have to call first....I just want to make sure that the housekeeper took my little angel to her "abstinence-only" sex-ed class, BEFORE she takes her to the OB-GYN for her ultrasound....I'm gonna be a good Mom and make sure my 13 year old's baby is healthy!"
VM:
"Okay...you're a doll...thanks.....and GUURRLL POWER!!!"
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Credit-Default Swaps Move Closer to Regulation With N.Y. Plan
New York State's proposal to start regulating part of the credit-default swaps market may accelerate oversight of an industry blamed for helping to almost bring down the U.S. financial system.
New York Governor David Paterson said in a statement yesterday that the state will consider contracts sold to investors who own bonds they are trying to protect from default as insurance. The plan won't apply to contracts purchased by speculators who only want to bet on an increase or decrease in a borrower's creditworthiness and don't own bonds.
Calls for greater regulation of the $62 trillion market have grown after the U.S. had to take over American International Group Inc. and provide the New York-based insurer with an $85 billion loan to cover obligations at a unit that sold protection on securities through the credit-default swap market. The AIG subsidiary was required to post collateral against more than $400 billion of contracts after its credit rating was downgraded.
``I think it's clear to everyone that there's going to be more regulation coming'' said Brad Golding, managing director at Christofferson Robb & Co., New York-based money management firm. ``Is every swap dealer in the world going to have to apply to New York for an insurance license? The bottom line is: good luck with that.''
Claims Paying Ability
Under Paterson's plan, the New York State Insurance Department would require entities selling credit-default swaps to bondholders to show they can actually pay the claims if there is a default. The new guidelines will become effective in January.
``The absence of regulatory oversight is the principal cause of the Wall Street meltdown we are currently witnessing,'' Paterson said. ``I urge the federal government to follow New York's lead once again by regulating the rest of the credit- default swap market.''
Credit-default swaps, which are traded between banks, hedge funds, insurers and other investors, are financial instruments based on bonds and loans that are used to speculate on a company's ability to repay debt or to hedge against losses.
They pay the buyer face value in exchange for the underlying securities or the cash equivalent should the borrower fail to adhere to its debt agreements. The market has grown 100-fold over the past seven years to cover $62 trillion of debt, or more bonds than there are outstanding.
Market Disruption
New York regulators threaten ``to disrupt global derivatives markets'' through this action, said Robert Pickel, chief executive officer of the International Swaps and Derivatives Association. The New York-based industry group represents dealers and investors, and sets standards for trading.
``The state of New York should proceed very cautiously and in consultation with federal regulators before acting in a way that may ultimately cause more harm than good,'' Pickel said in a statement.
Until now, the state hasn't regulated the credit-default swap market even as bond insurance companies expanded into the business of guaranteeing securities through contracts rather than insurance policies.
Five of seven formerly AAA rated bond insurers, including Armonk, New York-based MBIA Inc. and Ambac Financial Group Inc. in New York, lost their top rankings after writing credit-default swap contracts on more than $100 billion of so-called collateralized debt obligations backed by subprime mortgages.
`Further Dislocation'
Insurance companies, which are prohibited from entering into derivative transactions directly, created special purpose vehicles to create credit-default swaps they could sell to investors. These SPVs were minimally capitalized because their obligations in the event of a security defaulting were guaranteed by the insurance company.
``We are concerned that this plan has not been well thought through,'' Tim Backshall, chief strategist at Credit Derivatives Research LLC, said in a note to clients about the New York state plan yesterday. ``These ad hoc actions are more likely to cause further dislocation than help any realignment and normalcy.''
Until New York State Insurance Department Chairman Eric Dinallo provides more details about the plan, the effort may obscure rather than clarify some of the regulatory obstacles, said Ed Grebeck, chief executive officer of Tempus Advisors, a debt consulting firm in Stamford, Connecticut.
``How is Dinallo going to say who is adequately capitalized?'' Grebeck said. ``I don't think this thing is clearly thought out. Parties buying protection in the credit default swap market are all international investors. I don't see how New York State can address what is an international issue.''
The Federal Reserve Bank of New York has been the most involved in trying to reduce risks in the credit swaps market, starting with demands in 2005 from New York Fed President Timothy Geithner that banks reduce a backlog of unconfirmed trades that threatened to undermine the market.
After the collapse of Bear Stearns Cos. in March the Fed intensified its demands, engineering a list of efforts among the 17 largest dealers including creation of a clearinghouse overseen by the Fed that would absorb the failure of a market-maker.
New York Governor David Paterson said in a statement yesterday that the state will consider contracts sold to investors who own bonds they are trying to protect from default as insurance. The plan won't apply to contracts purchased by speculators who only want to bet on an increase or decrease in a borrower's creditworthiness and don't own bonds.
Calls for greater regulation of the $62 trillion market have grown after the U.S. had to take over American International Group Inc. and provide the New York-based insurer with an $85 billion loan to cover obligations at a unit that sold protection on securities through the credit-default swap market. The AIG subsidiary was required to post collateral against more than $400 billion of contracts after its credit rating was downgraded.
``I think it's clear to everyone that there's going to be more regulation coming'' said Brad Golding, managing director at Christofferson Robb & Co., New York-based money management firm. ``Is every swap dealer in the world going to have to apply to New York for an insurance license? The bottom line is: good luck with that.''
Claims Paying Ability
Under Paterson's plan, the New York State Insurance Department would require entities selling credit-default swaps to bondholders to show they can actually pay the claims if there is a default. The new guidelines will become effective in January.
``The absence of regulatory oversight is the principal cause of the Wall Street meltdown we are currently witnessing,'' Paterson said. ``I urge the federal government to follow New York's lead once again by regulating the rest of the credit- default swap market.''
Credit-default swaps, which are traded between banks, hedge funds, insurers and other investors, are financial instruments based on bonds and loans that are used to speculate on a company's ability to repay debt or to hedge against losses.
They pay the buyer face value in exchange for the underlying securities or the cash equivalent should the borrower fail to adhere to its debt agreements. The market has grown 100-fold over the past seven years to cover $62 trillion of debt, or more bonds than there are outstanding.
Market Disruption
New York regulators threaten ``to disrupt global derivatives markets'' through this action, said Robert Pickel, chief executive officer of the International Swaps and Derivatives Association. The New York-based industry group represents dealers and investors, and sets standards for trading.
``The state of New York should proceed very cautiously and in consultation with federal regulators before acting in a way that may ultimately cause more harm than good,'' Pickel said in a statement.
Until now, the state hasn't regulated the credit-default swap market even as bond insurance companies expanded into the business of guaranteeing securities through contracts rather than insurance policies.
Five of seven formerly AAA rated bond insurers, including Armonk, New York-based MBIA Inc. and Ambac Financial Group Inc. in New York, lost their top rankings after writing credit-default swap contracts on more than $100 billion of so-called collateralized debt obligations backed by subprime mortgages.
`Further Dislocation'
Insurance companies, which are prohibited from entering into derivative transactions directly, created special purpose vehicles to create credit-default swaps they could sell to investors. These SPVs were minimally capitalized because their obligations in the event of a security defaulting were guaranteed by the insurance company.
``We are concerned that this plan has not been well thought through,'' Tim Backshall, chief strategist at Credit Derivatives Research LLC, said in a note to clients about the New York state plan yesterday. ``These ad hoc actions are more likely to cause further dislocation than help any realignment and normalcy.''
Until New York State Insurance Department Chairman Eric Dinallo provides more details about the plan, the effort may obscure rather than clarify some of the regulatory obstacles, said Ed Grebeck, chief executive officer of Tempus Advisors, a debt consulting firm in Stamford, Connecticut.
``How is Dinallo going to say who is adequately capitalized?'' Grebeck said. ``I don't think this thing is clearly thought out. Parties buying protection in the credit default swap market are all international investors. I don't see how New York State can address what is an international issue.''
The Federal Reserve Bank of New York has been the most involved in trying to reduce risks in the credit swaps market, starting with demands in 2005 from New York Fed President Timothy Geithner that banks reduce a backlog of unconfirmed trades that threatened to undermine the market.
After the collapse of Bear Stearns Cos. in March the Fed intensified its demands, engineering a list of efforts among the 17 largest dealers including creation of a clearinghouse overseen by the Fed that would absorb the failure of a market-maker.
Asian Stocks Fall, Snapping Two-Day Rally; Banks, Airlines Drop
Asian stocks fell, snapping a two- day rally, after oil prices jumped by a record and concern grew the U.S. financial-industry bailout won't prevent a recession.
Westpac Banking Corp., Australia's second-biggest bank by market value, dropped 2.1 percent after corporate bond risk rose for the first time in three days. Korean Air Lines Co. lost 2.1 percent as oil's surge yesterday raised fuel costs. China Mengniu Dairy Co. tumbled by a record 56 percent after its products were found to contain a chemical linked to at least four infant deaths.
``The bailout gave the U.S. financial system a cardiac jolt that will prevent it from collapsing, but the economy is still in intensive care,'' said Prasad Patkar, who helps manage the equivalent of $1.8 billion at Platypus Asset Management in Sydney.
The MSCI Asia Pacific excluding Japan Index slid 1.7 percent to 354.11 as of 11 a.m. in Hong Kong. Financial stocks were the biggest contributor to the decline. Stocks fell around the region, except in South Korea and Malaysia. Markets in Japan are shut for a holiday.
Asia's benchmark gauge jumped 8.3 percent in the previous two days after the U.S.'s $700 billion plan to buy toxic debt from banks and tighter regulation of short selling by the U.S., U.K., Australia and Taiwan eased concern more companies will follow Lehman Brothers Holdings Inc. into bankruptcy.
U.S. stocks and the dollar tumbled yesterday, with the Standard & Poor's 500 Index losing 3.8 percent, on concern the U.S. bailout plan won't benefit regional banks. S&P 500 futures gained 0.3 percent in after-hours trading.
Westpac slipped 2.1 percent to A$24.19. Macquarie Group Ltd., Australia's biggest securities firm, fell 6.1 percent to A$35.50.
`Second Wave'
A rally in Asian financials will be capped by an ``ongoing slowdown'' and ``a second wave of U.S. problems still ahead,'' Goldman, Sachs & Co. said in a report today. JPMorgan Chase & Co. and Merrill Lynch & Co. advised clients to sell U.S. midsized banks because they won't immediately benefit from the bailout.
United Overseas Bank Ltd., Singapore's second-biggest, slid 2.2 percent to S$17.08. HSBC Holdings Plc, the world's second biggest bank by market value, fell 1.7 percent to HK$123.90
The Markit iTraxx Australia Series 9 Index increased 4 basis points to 162.5 at 9:25 a.m. in Sydney, according to Citigroup Inc. prices. The index contains credit-default swaps tied to 25 borrowers including Macquarie and Qantas Airways Ltd.
Korean Air, the nation's biggest carrier, retreated 1.7 percent to 38,400 won. Qantas, Australia's largest, slipped 2.1 percent to A$3.25, the lowest since July 16.
Oil Surge
Oil for October delivery surged 17 percent to expire at $120.92 a barrel yesterday as traders stepped up purchases of contracts to offset earlier short sales. Crude oil for November delivery advanced 6.4 percent to close at $109.37 a barrel, and was recently at $109.07 in after-hours trading.
Newcrest Mining Ltd., Australia's largest gold producer, added 6.9 percent to A$27.25. Gold rose 5.1 percent to $909 an ounce yesterday, extending a rally after its biggest weekly gain in almost nine years, as investors shifted assets into precious metals as a haven from market turmoil and the declining dollar.
The dollar slipped to 105.30 yen from 105.51 yen late in New York yesterday, when it fell 1.8 percent.
Malaysian plantation stocks rose after Aseambankers Bhd. lifted its rating on the industry to ``overweight,'' from ``underweight,'' citing resurging biodiesel demand and a possible rebound in commodity prices. Sime Darby Bhd., the biggest, gained 3.2 percent to 6.55 ringgit. IOI Corp., the nation's second- largest listed oil-palm grower, rose 3.4 percent to 4.82 ringgit.
Mengniu, which said it's facing a ``critical moment'' after tainted Chinese-produced milk sickened almost 53,000 children, tumbled 56 percent to HK$8.59 in Hong Kong. Inner Mongolia Yili Industrial Group Co., whose milk products have been found to contain the industrial chemical melamine, fell by the 10 percent daily limit to 9.93 yuan in Shanghai.
Goldman Sachs cut its recommendations on Mengniu and Yili to ``sell,'' saying dairy sales will slow while the companies increase spending on product promotion and brand building.
Westpac Banking Corp., Australia's second-biggest bank by market value, dropped 2.1 percent after corporate bond risk rose for the first time in three days. Korean Air Lines Co. lost 2.1 percent as oil's surge yesterday raised fuel costs. China Mengniu Dairy Co. tumbled by a record 56 percent after its products were found to contain a chemical linked to at least four infant deaths.
``The bailout gave the U.S. financial system a cardiac jolt that will prevent it from collapsing, but the economy is still in intensive care,'' said Prasad Patkar, who helps manage the equivalent of $1.8 billion at Platypus Asset Management in Sydney.
The MSCI Asia Pacific excluding Japan Index slid 1.7 percent to 354.11 as of 11 a.m. in Hong Kong. Financial stocks were the biggest contributor to the decline. Stocks fell around the region, except in South Korea and Malaysia. Markets in Japan are shut for a holiday.
Asia's benchmark gauge jumped 8.3 percent in the previous two days after the U.S.'s $700 billion plan to buy toxic debt from banks and tighter regulation of short selling by the U.S., U.K., Australia and Taiwan eased concern more companies will follow Lehman Brothers Holdings Inc. into bankruptcy.
U.S. stocks and the dollar tumbled yesterday, with the Standard & Poor's 500 Index losing 3.8 percent, on concern the U.S. bailout plan won't benefit regional banks. S&P 500 futures gained 0.3 percent in after-hours trading.
Westpac slipped 2.1 percent to A$24.19. Macquarie Group Ltd., Australia's biggest securities firm, fell 6.1 percent to A$35.50.
`Second Wave'
A rally in Asian financials will be capped by an ``ongoing slowdown'' and ``a second wave of U.S. problems still ahead,'' Goldman, Sachs & Co. said in a report today. JPMorgan Chase & Co. and Merrill Lynch & Co. advised clients to sell U.S. midsized banks because they won't immediately benefit from the bailout.
United Overseas Bank Ltd., Singapore's second-biggest, slid 2.2 percent to S$17.08. HSBC Holdings Plc, the world's second biggest bank by market value, fell 1.7 percent to HK$123.90
The Markit iTraxx Australia Series 9 Index increased 4 basis points to 162.5 at 9:25 a.m. in Sydney, according to Citigroup Inc. prices. The index contains credit-default swaps tied to 25 borrowers including Macquarie and Qantas Airways Ltd.
Korean Air, the nation's biggest carrier, retreated 1.7 percent to 38,400 won. Qantas, Australia's largest, slipped 2.1 percent to A$3.25, the lowest since July 16.
Oil Surge
Oil for October delivery surged 17 percent to expire at $120.92 a barrel yesterday as traders stepped up purchases of contracts to offset earlier short sales. Crude oil for November delivery advanced 6.4 percent to close at $109.37 a barrel, and was recently at $109.07 in after-hours trading.
Newcrest Mining Ltd., Australia's largest gold producer, added 6.9 percent to A$27.25. Gold rose 5.1 percent to $909 an ounce yesterday, extending a rally after its biggest weekly gain in almost nine years, as investors shifted assets into precious metals as a haven from market turmoil and the declining dollar.
The dollar slipped to 105.30 yen from 105.51 yen late in New York yesterday, when it fell 1.8 percent.
Malaysian plantation stocks rose after Aseambankers Bhd. lifted its rating on the industry to ``overweight,'' from ``underweight,'' citing resurging biodiesel demand and a possible rebound in commodity prices. Sime Darby Bhd., the biggest, gained 3.2 percent to 6.55 ringgit. IOI Corp., the nation's second- largest listed oil-palm grower, rose 3.4 percent to 4.82 ringgit.
Mengniu, which said it's facing a ``critical moment'' after tainted Chinese-produced milk sickened almost 53,000 children, tumbled 56 percent to HK$8.59 in Hong Kong. Inner Mongolia Yili Industrial Group Co., whose milk products have been found to contain the industrial chemical melamine, fell by the 10 percent daily limit to 9.93 yuan in Shanghai.
Goldman Sachs cut its recommendations on Mengniu and Yili to ``sell,'' saying dairy sales will slow while the companies increase spending on product promotion and brand building.
2008-09-21
'Mad Men,''30 Rock' take top Emmy awards
The sleek '60s drama "Mad Men" made Emmy history Sunday as the first basic-cable show to win a top series award, while the sitcom "30 Rock" and its stars Tina Fey and Alec Baldwin also emerged as winners.
"We're all so very grateful to have jobs in this turkey-burger economy," Fey said after accepting the best comedy series trophy for her satire about a late-night TV show.
Glenn Close of "Damages" and Bryan Cranston of "Breaking Bad" captured drama acting trophies.
"This is the greatest job I've ever had in my life," Baldwin said of his role an a network executive.
He paid tribute to Fey, the show's star and creator, as "the Elaine May of her generation."
"I thank my parents for somehow raising me to have confidence that is disproportionate with my looks and abilities. Well done. That is what all parents should do," said Fey, who also for best actress and writing in a comedy series.
Close, honored for her portrayal of a ruthless attorney, complimented her fellow nominees, including Holly Hunter and Sally Field.
"We're proving that complicated, powerful, mature women are sexy and are high entertainment and can carry a show," she said. "I call us the sisterhood of the TV drama divas."
Cranston won the trophy for his role of a desperate man who turns to making drugs.
Dianne Wiest of "In Treatment" and Zeljko Ivanek of "Damages" won supporting acting honors for the drama series. Jean Smart of ABC's "Samantha Who?" was honored as best supporting actress in a comedy series, with Jeremy Piven her actor counterpart for "Entourage."
Piven took aim at the five reality hosts who helped open the ceremony in what could charitably called a rambling way, saying, "What if I just kept talking for 12 minutes - what would happen? That was the opening."
The crowd at the 60th annual Primetime Emmy Awards laughed heartily, not a good sign for the hosts, who included Ryan Seacreast of "American Idol."
Don Rickles was honored for best individual performance in a variety or music program for "Mr. Warmth: The Don Rickles Project."
"It's a mistake," Rickles said. "I've been in the business 55 years and the biggest award I got was an ashtray from the Friar's in New York."
Best reality-competition program went to "Amazing Race," the show's sixth award.
Jeff Probst of "Survivor," one of the ceremony's masters of ceremonies, claimed the first award for best reality series host. "We feel honored to be part of this family. Thank you for letting reality in," Probst said.
As the evening progressed, politics went from having a cameo to a co-starring role.
"I really look forward to the next administration, whoever it is," Jon Stewart said as he accepted the best variety, music or comedy series award for "The Daily Show.""I have nothing to follow that. I just really look forward to the next administration."
Later, Stewart and Stephen Colbert, whose "The Colbert Report" won a writing trophy, teamed to present an award - and exchange banter in which they used a package of prunes as a metaphor for the upcoming presidential election.
"America needs prunes. It may not be a young, sexy plum. Granted, it's shriveled and at times hard to swallow. But this dried-up old prune has the experience we need," Colbert said.
Tommy Smothers received a commemorative writing achievement for his work on the cutting-edge and controversial "The Smothers Brothers Comedy Hour" from the late '60s - and turned serious.
"It's hard for me to stay silent when I keep hearing that peace is only attainable through war. And there's nothing more scary than watching ignorance in action," he said, dedicating his award to "all people who feel compelled to speak out, and are not afraid to speak to power, and won't shut up and refuse to be silenced."
Martin Sheen, who played a president on "The West Wing," lauded television for giving America a front-row seat to real presidential campaigns. Then he urged viewers to vote for "the candidate of your choice, at least once."
The award for best TV movie went to "Recount," about the contested 2000 Bush-Gore contest.
"John Adams," about the founding father, was named best miniseries and won other awards including acting trophies for Paul Giamatti, Laura Linney and Tom Wilkinson.
Throughout the evening, the ceremony kept its landmark 60th birthday in the spotlight with salutes to television's past.
Pop star Josh Groban offered a marathon medley of TV theme songs, ranging from "The Simpsons" to "Mister Rogers' Neighborhood" to "South Park" to "Gilligan's Island." At one point, Ed McMahon kicked in a "Heeeere's Johnny!" to salute Johnny Carson's "Tonight" show.
A tribute to memorable TV dialogue of the past was delivered by the stars of today in an opening clip package.
"One of these days, Alice, pow, right in the kisser!" Helen Mirren said, quoting Jackie Gleason's line from "The Honeymooners."
As the show opened at the Nokia Theatre, Howie Mandel and his fellow hosts riffed about a lack of material for the ceremony.
They then turned to slapstick: "Boston Legal" star William Shatner came on stage to help Tom Bergeron rip off co-host Heidi Klum's modest suit to reveal hot pants and more skin.
"We're all so very grateful to have jobs in this turkey-burger economy," Fey said after accepting the best comedy series trophy for her satire about a late-night TV show.
Glenn Close of "Damages" and Bryan Cranston of "Breaking Bad" captured drama acting trophies.
"This is the greatest job I've ever had in my life," Baldwin said of his role an a network executive.
He paid tribute to Fey, the show's star and creator, as "the Elaine May of her generation."
"I thank my parents for somehow raising me to have confidence that is disproportionate with my looks and abilities. Well done. That is what all parents should do," said Fey, who also for best actress and writing in a comedy series.
Close, honored for her portrayal of a ruthless attorney, complimented her fellow nominees, including Holly Hunter and Sally Field.
"We're proving that complicated, powerful, mature women are sexy and are high entertainment and can carry a show," she said. "I call us the sisterhood of the TV drama divas."
Cranston won the trophy for his role of a desperate man who turns to making drugs.
Dianne Wiest of "In Treatment" and Zeljko Ivanek of "Damages" won supporting acting honors for the drama series. Jean Smart of ABC's "Samantha Who?" was honored as best supporting actress in a comedy series, with Jeremy Piven her actor counterpart for "Entourage."
Piven took aim at the five reality hosts who helped open the ceremony in what could charitably called a rambling way, saying, "What if I just kept talking for 12 minutes - what would happen? That was the opening."
The crowd at the 60th annual Primetime Emmy Awards laughed heartily, not a good sign for the hosts, who included Ryan Seacreast of "American Idol."
Don Rickles was honored for best individual performance in a variety or music program for "Mr. Warmth: The Don Rickles Project."
"It's a mistake," Rickles said. "I've been in the business 55 years and the biggest award I got was an ashtray from the Friar's in New York."
Best reality-competition program went to "Amazing Race," the show's sixth award.
Jeff Probst of "Survivor," one of the ceremony's masters of ceremonies, claimed the first award for best reality series host. "We feel honored to be part of this family. Thank you for letting reality in," Probst said.
As the evening progressed, politics went from having a cameo to a co-starring role.
"I really look forward to the next administration, whoever it is," Jon Stewart said as he accepted the best variety, music or comedy series award for "The Daily Show.""I have nothing to follow that. I just really look forward to the next administration."
Later, Stewart and Stephen Colbert, whose "The Colbert Report" won a writing trophy, teamed to present an award - and exchange banter in which they used a package of prunes as a metaphor for the upcoming presidential election.
"America needs prunes. It may not be a young, sexy plum. Granted, it's shriveled and at times hard to swallow. But this dried-up old prune has the experience we need," Colbert said.
Tommy Smothers received a commemorative writing achievement for his work on the cutting-edge and controversial "The Smothers Brothers Comedy Hour" from the late '60s - and turned serious.
"It's hard for me to stay silent when I keep hearing that peace is only attainable through war. And there's nothing more scary than watching ignorance in action," he said, dedicating his award to "all people who feel compelled to speak out, and are not afraid to speak to power, and won't shut up and refuse to be silenced."
Martin Sheen, who played a president on "The West Wing," lauded television for giving America a front-row seat to real presidential campaigns. Then he urged viewers to vote for "the candidate of your choice, at least once."
The award for best TV movie went to "Recount," about the contested 2000 Bush-Gore contest.
"John Adams," about the founding father, was named best miniseries and won other awards including acting trophies for Paul Giamatti, Laura Linney and Tom Wilkinson.
Throughout the evening, the ceremony kept its landmark 60th birthday in the spotlight with salutes to television's past.
Pop star Josh Groban offered a marathon medley of TV theme songs, ranging from "The Simpsons" to "Mister Rogers' Neighborhood" to "South Park" to "Gilligan's Island." At one point, Ed McMahon kicked in a "Heeeere's Johnny!" to salute Johnny Carson's "Tonight" show.
A tribute to memorable TV dialogue of the past was delivered by the stars of today in an opening clip package.
"One of these days, Alice, pow, right in the kisser!" Helen Mirren said, quoting Jackie Gleason's line from "The Honeymooners."
As the show opened at the Nokia Theatre, Howie Mandel and his fellow hosts riffed about a lack of material for the ceremony.
They then turned to slapstick: "Boston Legal" star William Shatner came on stage to help Tom Bergeron rip off co-host Heidi Klum's modest suit to reveal hot pants and more skin.
Nearly 12,900 Chinese children sick from milk
The number of children in China sickened by dairy products tainted with the banned industrial chemical melamine has doubled to nearly 12,900, the government said Sunday as it vowed to crack down on those responsible for one of China's worst food safety scandals in years.
More than 80 percent of the 12,892 children hospitalized in recent weeks were 2 years old or younger, the Health Ministry said in a statement posted on its Web site late Sunday. Four children have died.
The Health Ministry said that most of the hospitalized were sickened by powdered milk and baby formula. It said most of the sick children consumed baby formula from one company, the Shijiazhuang Sanlu Group Co. The dairy is at the center of the scandal.
"The hospitalized children basically consumed Sanlu brand infant milk powder. No cases have been found from ingesting liquid milk," said the ministry statement.
Over the weekend, the Chinese territory of Hong Kong reported the first known illness outside mainland China - a 3-year-old girl who developed kidney stones after drinking Chinese dairy products. She was discharged from the hospital, the Hong Kong government said.
Singapore said Sunday that it had found traces of melamine in another Chinese-made dairy product, milk-based White Rabbit brand candy.
"Retailers and importers have been instructed to recall these products and withhold them from sale," Singapore's Agri-Food and Veterinary Authority said in a statement.
In the two weeks since the government first acknowledged the contamination, it has issued recalls for dairy products from 22 companies after tests turned up traces of melamine.
Melamine is used in making plastics and is high in nitrogen, which registers as protein in tests of milk. Though health experts believe ingesting minute amounts poses no danger, melamine can cause kidney stones, which can lead to kidney failure. Infants are particularly vulnerable.
(AP) Chinese food safety officers inspect Mengniu branded milk at a supermarket in Fuyang, China,...
Full Image
Some of the farmers who sell milk to Chinese food companies are thought to have used melamine to disguise watered-down milk and fatten profit margins hurt by rising costs for feed, fuel and labor.
In Hong Kong, parents of the 3-year-old girl took her for a checkup because she had been drinking milk made by Chinese dairy Yili Industrial Group Co. every day for the past 15 months. Yili was among the 22 companies whose products were recalled for melamine contamination.
The ministry did not say why the number of cases had suddenly doubled from 6,200 on Saturday, but it suggested that health officials were combing through hospital records from May through August to trace the origins of the contamination. The deaths of three infants linked to tainted infant formula occurred in those months.
The Chinese government has launched high-profile efforts to show it is on top of the crisis, with Premier Wen Jiabao appearing on state-run television Sunday to say diary companies had to show more "social responsibility."
Wen was shown visiting a Beijing hospital where children were having health checks. He also stopped at a supermarket to look at dairy products.
(AP) A farmer washes away excess milk released at the end of the day at a milk farm in Yuanshi, northern...
Full Image
"The government will put more efforts into food security, taking the incident as a warning," Wen said.
"What we are trying to do is to ensure no such event happens in future, by punishing those responsible leaders as well as enterprises. None of those companies lacking professional ethics or social morals will be let off," Wen said, according to the official Xinhua News Agency.
Since the problem of tainted milk products became public knowledge less than two weeks ago, the crisis has spread to include almost all of China's biggest dairy companies. Their products have been pulled from stores around the country, and in other places such as the self-governing Chinese territories of Hong Kong and Macau. Starbucks stopped offering milk in its 300 outlets in China.
Hong Kong's two main supermarket chains said Sunday they were recalling milk powder made by Swiss manufacturer Nestle after a newspaper reported it contains melamine.
Spokeswomen for both companies said they acted as a precaution after Hong Kong's Apple Daily reported Sunday that tests it commissioned showed that Nestle milk powder made in China's northeastern Heilongjiang province contained melamine.
Nestle's Hong Kong office did not immediately respond to a message seeking comment. Calls after work hours to its Beijing office and Beijing hot line went unanswered.
But the company said in a statement last Wednesday that none of its infant formula and milk powder products contained melamine.
"Nestle can hence assure its ... customers that its products are safe for consumption," it said.
Taiwanese company King Car Co. announced it has recalled packs of its Mr. Brown instant coffee and milk tea containing contaminated milk powder imported from China.
Japan and Singapore have recalled Chinese-made dairy products, and the governments of Malaysia and Brunei announced bans on milk products from China even though neither country currently imports Chinese dairy items.
The concern is because melamine has been found not only in powdered milk - used to make baby formula and other products - but also in liquid milk sold by China's biggest dairies.
Food and product safety scandals have been a feature of Chinese life. Only last year, the government promised to overhaul inspection procedures after exports of medicines, toys, pet food ingredients and other products killed and sickened people and pets in North and South America.
The chemical in the dangerous pet food was the same as in the milk scandal - melamine.
More than 80 percent of the 12,892 children hospitalized in recent weeks were 2 years old or younger, the Health Ministry said in a statement posted on its Web site late Sunday. Four children have died.
The Health Ministry said that most of the hospitalized were sickened by powdered milk and baby formula. It said most of the sick children consumed baby formula from one company, the Shijiazhuang Sanlu Group Co. The dairy is at the center of the scandal.
"The hospitalized children basically consumed Sanlu brand infant milk powder. No cases have been found from ingesting liquid milk," said the ministry statement.
Over the weekend, the Chinese territory of Hong Kong reported the first known illness outside mainland China - a 3-year-old girl who developed kidney stones after drinking Chinese dairy products. She was discharged from the hospital, the Hong Kong government said.
Singapore said Sunday that it had found traces of melamine in another Chinese-made dairy product, milk-based White Rabbit brand candy.
"Retailers and importers have been instructed to recall these products and withhold them from sale," Singapore's Agri-Food and Veterinary Authority said in a statement.
In the two weeks since the government first acknowledged the contamination, it has issued recalls for dairy products from 22 companies after tests turned up traces of melamine.
Melamine is used in making plastics and is high in nitrogen, which registers as protein in tests of milk. Though health experts believe ingesting minute amounts poses no danger, melamine can cause kidney stones, which can lead to kidney failure. Infants are particularly vulnerable.
(AP) Chinese food safety officers inspect Mengniu branded milk at a supermarket in Fuyang, China,...
Full Image
Some of the farmers who sell milk to Chinese food companies are thought to have used melamine to disguise watered-down milk and fatten profit margins hurt by rising costs for feed, fuel and labor.
In Hong Kong, parents of the 3-year-old girl took her for a checkup because she had been drinking milk made by Chinese dairy Yili Industrial Group Co. every day for the past 15 months. Yili was among the 22 companies whose products were recalled for melamine contamination.
The ministry did not say why the number of cases had suddenly doubled from 6,200 on Saturday, but it suggested that health officials were combing through hospital records from May through August to trace the origins of the contamination. The deaths of three infants linked to tainted infant formula occurred in those months.
The Chinese government has launched high-profile efforts to show it is on top of the crisis, with Premier Wen Jiabao appearing on state-run television Sunday to say diary companies had to show more "social responsibility."
Wen was shown visiting a Beijing hospital where children were having health checks. He also stopped at a supermarket to look at dairy products.
(AP) A farmer washes away excess milk released at the end of the day at a milk farm in Yuanshi, northern...
Full Image
"The government will put more efforts into food security, taking the incident as a warning," Wen said.
"What we are trying to do is to ensure no such event happens in future, by punishing those responsible leaders as well as enterprises. None of those companies lacking professional ethics or social morals will be let off," Wen said, according to the official Xinhua News Agency.
Since the problem of tainted milk products became public knowledge less than two weeks ago, the crisis has spread to include almost all of China's biggest dairy companies. Their products have been pulled from stores around the country, and in other places such as the self-governing Chinese territories of Hong Kong and Macau. Starbucks stopped offering milk in its 300 outlets in China.
Hong Kong's two main supermarket chains said Sunday they were recalling milk powder made by Swiss manufacturer Nestle after a newspaper reported it contains melamine.
Spokeswomen for both companies said they acted as a precaution after Hong Kong's Apple Daily reported Sunday that tests it commissioned showed that Nestle milk powder made in China's northeastern Heilongjiang province contained melamine.
Nestle's Hong Kong office did not immediately respond to a message seeking comment. Calls after work hours to its Beijing office and Beijing hot line went unanswered.
But the company said in a statement last Wednesday that none of its infant formula and milk powder products contained melamine.
"Nestle can hence assure its ... customers that its products are safe for consumption," it said.
Taiwanese company King Car Co. announced it has recalled packs of its Mr. Brown instant coffee and milk tea containing contaminated milk powder imported from China.
Japan and Singapore have recalled Chinese-made dairy products, and the governments of Malaysia and Brunei announced bans on milk products from China even though neither country currently imports Chinese dairy items.
The concern is because melamine has been found not only in powdered milk - used to make baby formula and other products - but also in liquid milk sold by China's biggest dairies.
Food and product safety scandals have been a feature of Chinese life. Only last year, the government promised to overhaul inspection procedures after exports of medicines, toys, pet food ingredients and other products killed and sickened people and pets in North and South America.
The chemical in the dangerous pet food was the same as in the milk scandal - melamine.
Last major investment banks change status
The Federal Reserve said Sunday it had granted a request by the country's last two major investment banks - Goldman Sachs and Morgan Stanley (MS) - to change their status to bank holding companies.
The Fed announced that it had approved the request of the two investment banks. The change in status will allow them to create commercial banks that will be able to take deposits, bolstering the resources of both institutions.
The change continued the biggest restructuring on Wall Street since the Great Depression.
The request for the change to bank holding companies was granted by a unanimous vote of the Fed's board of governors during a late Sunday meeting in Washington.
The change of status means both companies will come under the direct regulation of the Federal Reserve, which regulates the nation's bank holding companies. The banking subsidiaries of the two institutions will face the stricter regulations that commercial banks are required to meet. Previously, the primary regulator for Goldman and Morgan Stanley was the Securities and Exchange Commission.
Shares of both institutions had come under pressure ever since the bankruptcy filing last week by investment bank Lehman Brothers and the forced sale of investment bank Merrill Lynch to Bank of America.
Investors feared that the last remaining independent investment banks would not be able to survive in their current form. There had been speculation that both institutions would be acquired by commercial banks, whose ability to take deposits would give them a stable source of funding.
The decision by the two giants of finance to get approval from the Fed to change their own status represented another dramatic development in one of the most turbulent periods in Wall Street history.
In the surprise announcement late Sunday, the central bank said that to provide increase funding support to the two institutions during the transition period, they would be allowed to get short-term loans from the Federal Reserve Bank of New York against various types of collateral.
The Fed said its action would take final effect after a five-day waiting period required under law.
The decision means that the Goldman and Morgan Stanley will be able not only to set up commercial bank subsidiaries to take deposits, giving them a major resource base, but they will also have the same access as other commercial banks to the Fed's emergency loan program.
After the collapse of Bear Stearns and its forced sale to JP Morgan Chase last March, the Fed used powers it had been granted during the Great Depression to extend its emergency loans to investment banks as well as commercial banks. However, that extension was granted on a temporary basis.
But as commercial banks, Goldman Sachs and Morgan Stanley will have permanent access to emergency loans from the Fed, the same privilege that other commercial banks enjoy.
The action by the Fed's board of governors in Washington came on a day when the Bush administration continued to campaign for quick congressional approval of its request for authority to use $700 billion to purchase a mountain of bad mortgage debt held by financial companies. The effort represented the boldest action yet aimed at stabilizing chaotic financial markets.
Democrats in Congress said they would demand provisions in the bailout measure to protect people in danger of losing their homes as well as seeking to cap executive compensation at firms who get to unload their bad mortgages debt onto the government. But the proposal was expected to win quick congressional passage because both parties are concerned about the adverse reaction in financial markets should the measure look like it was being delayed.
The Fed announced that it had approved the request of the two investment banks. The change in status will allow them to create commercial banks that will be able to take deposits, bolstering the resources of both institutions.
The change continued the biggest restructuring on Wall Street since the Great Depression.
The request for the change to bank holding companies was granted by a unanimous vote of the Fed's board of governors during a late Sunday meeting in Washington.
The change of status means both companies will come under the direct regulation of the Federal Reserve, which regulates the nation's bank holding companies. The banking subsidiaries of the two institutions will face the stricter regulations that commercial banks are required to meet. Previously, the primary regulator for Goldman and Morgan Stanley was the Securities and Exchange Commission.
Shares of both institutions had come under pressure ever since the bankruptcy filing last week by investment bank Lehman Brothers and the forced sale of investment bank Merrill Lynch to Bank of America.
Investors feared that the last remaining independent investment banks would not be able to survive in their current form. There had been speculation that both institutions would be acquired by commercial banks, whose ability to take deposits would give them a stable source of funding.
The decision by the two giants of finance to get approval from the Fed to change their own status represented another dramatic development in one of the most turbulent periods in Wall Street history.
In the surprise announcement late Sunday, the central bank said that to provide increase funding support to the two institutions during the transition period, they would be allowed to get short-term loans from the Federal Reserve Bank of New York against various types of collateral.
The Fed said its action would take final effect after a five-day waiting period required under law.
The decision means that the Goldman and Morgan Stanley will be able not only to set up commercial bank subsidiaries to take deposits, giving them a major resource base, but they will also have the same access as other commercial banks to the Fed's emergency loan program.
After the collapse of Bear Stearns and its forced sale to JP Morgan Chase last March, the Fed used powers it had been granted during the Great Depression to extend its emergency loans to investment banks as well as commercial banks. However, that extension was granted on a temporary basis.
But as commercial banks, Goldman Sachs and Morgan Stanley will have permanent access to emergency loans from the Fed, the same privilege that other commercial banks enjoy.
The action by the Fed's board of governors in Washington came on a day when the Bush administration continued to campaign for quick congressional approval of its request for authority to use $700 billion to purchase a mountain of bad mortgage debt held by financial companies. The effort represented the boldest action yet aimed at stabilizing chaotic financial markets.
Democrats in Congress said they would demand provisions in the bailout measure to protect people in danger of losing their homes as well as seeking to cap executive compensation at firms who get to unload their bad mortgages debt onto the government. But the proposal was expected to win quick congressional passage because both parties are concerned about the adverse reaction in financial markets should the measure look like it was being delayed.
Bush wants OK to spend $700B
President Bush asked Congress on Saturday for the authority to spend as much as $700 billion to purchase troubled mortgage assets and contain the financial crisis.
The legislative proposal - the centerpiece of what would be the most sweeping economic intervention by the government since the Great Depression - was sent by the White House overnight to lawmakers. (Read the text here.)
The plan matches the scope of the problem, Bush said.
"It is a big package because it's a big problem," Bush told reporters at a news conference. "The risk of doing nothing far outweighs the risk of the package."
Treasury Secretary Henry Paulson, lawmakers and their aides are expected to work through the weekend in an effort to craft a bill swiftly. Democratic leaders on Capitol Hill said they expect the bill to go before a vote within days.
Paulson, Federal Reserve Chairman Ben Bernanke and other officials have said in recent days that the lack of easy credit between banks and other financial institutions threatens to inflict serious damage on the economy if not addressed immediately.
"This program is intended to fundamentally and comprehensively address the root cause of our financial system's stresses," according to a Treasury statement released Saturday. "As illiquid mortgage assets block the system, the clogging of our financial markets has the potential to significantly damage our financial system and our economy, undermining job creation and income growth."
Your comments on the bailout
The plan would allow the Treasury to buy up mortgage-related assets.
The aim is for the government to buy the securities at a discount, hold onto them and then sell them for a profit.
This proposal has been compared to the Resolution Trust Corp., which was put in place during the savings and loan crisis to administer and sell assets from failed thrifts.
However, experts say the Treasury's plan is more akin to the Home Owners' Loan Corp., put in place in 1933 to stem foreclosures and help refinance defaulting mortgages and boost banks' liquidity.
The mortgage plan is part of an extraordinary effort by the federal government to contain a financial crisis that has forced a major realignment on Wall Street and has started rippling out to Main Street.
In the past week, two of the nation's most venerable investment banks - Lehman Brothers (LEH, Fortune 500) and Merrill Lynch (MER, Fortune 500) - have fallen and the Federal Reserve was forced to lend $85 billion to prevent the sudden collapse of insurance giant American International Group (AIG, Fortune 500).
Meanwhile, mainstay financial institutions are scrambling to raise cash and shore up their books as lending has frozen up and investor confidence has sunk.
Raising the debt ceiling, judging the cost
The administration's proposal also requests that Congress authorize an increase to the nation's debt ceiling. Currently, it's set to rise to $10.6 trillion for fiscal year 2009 - which runs from October 2008 through September 2009. But the proposal requests that limit be increased to $11.315 trillion to allow for the purchases of mortgage-backed assets.
The debt limit is a ceiling on how much debt the federal government is allowed to take on. Budget experts say it acts as a break on spending mostly because of political pressure, because lawmakers don't like to vote to raise it. Lawmakers are free to change it if they have reason, however.
The cost of the bailout to taxpayers may hinge on the price at which the Treasury buys the mortgage securities.
"The government could make a profit, a substantial profit," said Jaret Seiberg, a financial services analyst at the Stanford Group, a policy research firm. "The pricing mechanism is going to be central."
The jury is still out on whether the proposal will fix the financial crisis, although experts are cautiously optimistic the plan will help the housing crisis. It will help banks shore up their balance sheets by removing hard-to-value assets. This would address the seemingly endless rounds of writedowns and capital raising that have been rocking the financial sector.
Without these bad loans weighing on their books, banks may be more willing to lend. Or at least that's the goal.
The problem is that the bailout will not automatically make banks profitable, nor can it immediately stop the slide in home values that is wreaking havoc on the economy.
Reaction on the Hill
Key lawmakers and their staffers will be in talks about the proposal with Treasury staff over the weekend. Although they've said they don't want the negotiations to turn the bill into a "Christmas tree" of provisions, Democrats are concerned that there be measures included to protect taxpayers and help homeowners directly.
Paulson said Sunday that the government's first priority needs to be focused on getting Congress to pass the massive package. "The credit markets are still very fragile right now and frozen," Paulson said in an interview on NBC's Meet the Press, according to the Associated Press. "We need to deal with this and deal with it quickly."
Paulson was making the rounds on the television talk shows Sunday morning.
He also said that "it pains me tremendously to have the American taxpayer put in this position but it is better than the alternative," according to the AP.
In a statement Saturday, Sen. Charles Schumer, D-N.Y., co-chairman of the Joint Economic Committee, called the proposal "a good foundation ... that can stabilize markets quickly."
"But it includes no visible protection for taxpayers or homeowners," Schumer said. "We look forward to talking to Treasury to see what, if anything, they have in mind in these two areas."
House Minority Leader John Boehner, R-Ohio, said the economy is facing "unprecedented financial challenges that could imperil the bank accounts, retirement savings, and jobs of countless Americans." He called on fellow lawmakers to "work together to solve this crisis."
Treasury officials briefed congressional staffers Saturday on the details of the plan. An hour-long closed-door meeting was attended by about 25 top aides to the congressional leadership from both parties as well as the key committee aides who will oversee the new program. At least one White House legislative affairs staffer was also in the meeting.
One Democratic aide, who also declined to be named, said the plan is "complicated" and the Treasury officials were "very forthcoming" about how the plan will work.
"No one likes it," the aide said. "But everyone knows we need it."
In the House, Conservative Republican lawmakers who groused earlier this week about "bailout mania" gripping Washington held a conference call to discuss the plan.
"We believe it is as dire as Paulson says it is," one of the lawmakers, who asked not to be identified, told CNN. "We think it is a fait accompli and don't have the wherewithal to stop it."
While it may not be stopped, some expect it still may be amended.
"Stability benefits everyone, but there is little in the bill that lawmakers can point to and say that this will aid their constituents," said Seiberg, the banking expert. "That is why we expect other provisions to get added by Congress, such as a clause that clearly states that Treasury has an obligation to try to restructure troubled mortgages that it acquires."
Indeed, after a conference call Saturday afternoon with other House Democratic leaders, House Speaker Nancy Pelosi, D-Calif., said in a statement that Democrats would seek to "insulate Main Street from Wall Street and keep people in their homes by reducing mortgage foreclosures."
"(We) will strengthen the proposal by ensuring that the government is accountable to the taxpayers in any future actions under this broad grant of authority, implementing strong oversight mechanisms, and establishing fast-track authority for the Congress to act on responsible regulatory reform," Pelosi said.
The legislative proposal - the centerpiece of what would be the most sweeping economic intervention by the government since the Great Depression - was sent by the White House overnight to lawmakers. (Read the text here.)
The plan matches the scope of the problem, Bush said.
"It is a big package because it's a big problem," Bush told reporters at a news conference. "The risk of doing nothing far outweighs the risk of the package."
Treasury Secretary Henry Paulson, lawmakers and their aides are expected to work through the weekend in an effort to craft a bill swiftly. Democratic leaders on Capitol Hill said they expect the bill to go before a vote within days.
Paulson, Federal Reserve Chairman Ben Bernanke and other officials have said in recent days that the lack of easy credit between banks and other financial institutions threatens to inflict serious damage on the economy if not addressed immediately.
"This program is intended to fundamentally and comprehensively address the root cause of our financial system's stresses," according to a Treasury statement released Saturday. "As illiquid mortgage assets block the system, the clogging of our financial markets has the potential to significantly damage our financial system and our economy, undermining job creation and income growth."
Your comments on the bailout
The plan would allow the Treasury to buy up mortgage-related assets.
The aim is for the government to buy the securities at a discount, hold onto them and then sell them for a profit.
This proposal has been compared to the Resolution Trust Corp., which was put in place during the savings and loan crisis to administer and sell assets from failed thrifts.
However, experts say the Treasury's plan is more akin to the Home Owners' Loan Corp., put in place in 1933 to stem foreclosures and help refinance defaulting mortgages and boost banks' liquidity.
The mortgage plan is part of an extraordinary effort by the federal government to contain a financial crisis that has forced a major realignment on Wall Street and has started rippling out to Main Street.
In the past week, two of the nation's most venerable investment banks - Lehman Brothers (LEH, Fortune 500) and Merrill Lynch (MER, Fortune 500) - have fallen and the Federal Reserve was forced to lend $85 billion to prevent the sudden collapse of insurance giant American International Group (AIG, Fortune 500).
Meanwhile, mainstay financial institutions are scrambling to raise cash and shore up their books as lending has frozen up and investor confidence has sunk.
Raising the debt ceiling, judging the cost
The administration's proposal also requests that Congress authorize an increase to the nation's debt ceiling. Currently, it's set to rise to $10.6 trillion for fiscal year 2009 - which runs from October 2008 through September 2009. But the proposal requests that limit be increased to $11.315 trillion to allow for the purchases of mortgage-backed assets.
The debt limit is a ceiling on how much debt the federal government is allowed to take on. Budget experts say it acts as a break on spending mostly because of political pressure, because lawmakers don't like to vote to raise it. Lawmakers are free to change it if they have reason, however.
The cost of the bailout to taxpayers may hinge on the price at which the Treasury buys the mortgage securities.
"The government could make a profit, a substantial profit," said Jaret Seiberg, a financial services analyst at the Stanford Group, a policy research firm. "The pricing mechanism is going to be central."
The jury is still out on whether the proposal will fix the financial crisis, although experts are cautiously optimistic the plan will help the housing crisis. It will help banks shore up their balance sheets by removing hard-to-value assets. This would address the seemingly endless rounds of writedowns and capital raising that have been rocking the financial sector.
Without these bad loans weighing on their books, banks may be more willing to lend. Or at least that's the goal.
The problem is that the bailout will not automatically make banks profitable, nor can it immediately stop the slide in home values that is wreaking havoc on the economy.
Reaction on the Hill
Key lawmakers and their staffers will be in talks about the proposal with Treasury staff over the weekend. Although they've said they don't want the negotiations to turn the bill into a "Christmas tree" of provisions, Democrats are concerned that there be measures included to protect taxpayers and help homeowners directly.
Paulson said Sunday that the government's first priority needs to be focused on getting Congress to pass the massive package. "The credit markets are still very fragile right now and frozen," Paulson said in an interview on NBC's Meet the Press, according to the Associated Press. "We need to deal with this and deal with it quickly."
Paulson was making the rounds on the television talk shows Sunday morning.
He also said that "it pains me tremendously to have the American taxpayer put in this position but it is better than the alternative," according to the AP.
In a statement Saturday, Sen. Charles Schumer, D-N.Y., co-chairman of the Joint Economic Committee, called the proposal "a good foundation ... that can stabilize markets quickly."
"But it includes no visible protection for taxpayers or homeowners," Schumer said. "We look forward to talking to Treasury to see what, if anything, they have in mind in these two areas."
House Minority Leader John Boehner, R-Ohio, said the economy is facing "unprecedented financial challenges that could imperil the bank accounts, retirement savings, and jobs of countless Americans." He called on fellow lawmakers to "work together to solve this crisis."
Treasury officials briefed congressional staffers Saturday on the details of the plan. An hour-long closed-door meeting was attended by about 25 top aides to the congressional leadership from both parties as well as the key committee aides who will oversee the new program. At least one White House legislative affairs staffer was also in the meeting.
One Democratic aide, who also declined to be named, said the plan is "complicated" and the Treasury officials were "very forthcoming" about how the plan will work.
"No one likes it," the aide said. "But everyone knows we need it."
In the House, Conservative Republican lawmakers who groused earlier this week about "bailout mania" gripping Washington held a conference call to discuss the plan.
"We believe it is as dire as Paulson says it is," one of the lawmakers, who asked not to be identified, told CNN. "We think it is a fait accompli and don't have the wherewithal to stop it."
While it may not be stopped, some expect it still may be amended.
"Stability benefits everyone, but there is little in the bill that lawmakers can point to and say that this will aid their constituents," said Seiberg, the banking expert. "That is why we expect other provisions to get added by Congress, such as a clause that clearly states that Treasury has an obligation to try to restructure troubled mortgages that it acquires."
Indeed, after a conference call Saturday afternoon with other House Democratic leaders, House Speaker Nancy Pelosi, D-Calif., said in a statement that Democrats would seek to "insulate Main Street from Wall Street and keep people in their homes by reducing mortgage foreclosures."
"(We) will strengthen the proposal by ensuring that the government is accountable to the taxpayers in any future actions under this broad grant of authority, implementing strong oversight mechanisms, and establishing fast-track authority for the Congress to act on responsible regulatory reform," Pelosi said.
Big bailout: Where things stand
The federal government is on the verge of instituting the most sweeping intervention in the financial markets since the Great Depression.
Details remain scarce as the Bush administration and Congress work to hammer out the final plan, which is aimed at stemming the credit crisis that's roiling Wall Street and threatening the global markets.
The Bush administration sent its proposal to members of Congress overnight, according to White House spokesman Tony Fratto.
Your comment on the bailout
"Secretary Paulson and his team will continue their discussions with Congress and staff throughout the weekend, and we're hopeful that good progress will be made," Fratto said.
Here's what we know so far:
The plan: The federal government would buy up "hundreds of billions of dollars" of illiquid mortgage assets at a deep discount from banks. The Treasury Department is likely to run the program directly, unlike the savings and loan crisis of the 1990s that led to the creation of the Resolution Trust Company.
"The federal government must implement a program to remove these illiquid assets that are weighing down our financial institutions and threatening our economy," said Paulson.
In the proposal sent overnight, President Bush has asked Congress for the authority to spend as much as $700 billion to purchase troubled mortgage assets and contain the financial crisis.
President Bush said Saturday that the plan matches the scope of the problem.
"It is a big package because it's a big problem," he told reporters at a joint news conference with Alvaro Uribe, the president of Colombia.
What remains to be seen is how the Treasury Department will structure the purchases and what price they'll pay.
The cost: While the proposal calls for the purchase of as much as $700 billion of bad loans, it's unknown what taxpayers will ultimately pay for the bailout.
The administration's proposal requests that Congress authorize an increase to the nation's debt ceiling. Currently, it's set to rise to $10.6 trillion for fiscal year 2009 - which runs from October 2008 through September 2009. But the proposal requests that limit be increased to $11.315 trillion to allow for the purchases of mortgage-backed assets.
The government will likely buy the assets at below-market rates and hold onto them until the market recovers. Ideally, the loans could then be sold at a gain.
"The government could make a profit, a substantial profit," said Jaret Seiberg, a financial services analyst at the Stanford Group, a policy research firm. "The pricing mechanism is going to be central."
Will it work: The jury is still out, although experts are cautiously optimistic the plan will help the housing crisis.
The plan will help banks shore up their balance sheets by removing hard-to-value assets. This would address the seemingly endless rounds of writedowns and capital raising that have been rocking the financial sector.
Without these bad loans weighing on their books, banks may be more willing to lend. Or at least that's the goal.
The problem is that the bailout will not automatically make banks profitable, nor will it stop the slide in home values that is wreaking havoc on the economy.
Will it help homeowners: It's unclear at this point. If the government buys an entire securitized loan, it could opt to help struggling homeowners by modifying the terms. This could include reducing a loan's interest rate or principal balance.
But it could prove difficult to snap up all the securities sold on a mortgage, experts said. And as long as investors still hold a piece, they could block any changes to the loan.
If the plan doesn't stem the tide of foreclosures, home prices will not stabilize and the economy will not recover, experts said.
Next steps: Lawmakers have said they'll review the plan over the weekend and plan to hold hearings on the matter next week. A deal could be hammered out as soon as next week.
CNN Correspondent Kathleen Koch contributed to this report.
First Published: September 19, 2008: 7:40 PM EDT
New bailout planned
Rescue cost: Hundreds of billions
Will it work?
The week that broke Wall Street
Details remain scarce as the Bush administration and Congress work to hammer out the final plan, which is aimed at stemming the credit crisis that's roiling Wall Street and threatening the global markets.
The Bush administration sent its proposal to members of Congress overnight, according to White House spokesman Tony Fratto.
Your comment on the bailout
"Secretary Paulson and his team will continue their discussions with Congress and staff throughout the weekend, and we're hopeful that good progress will be made," Fratto said.
Here's what we know so far:
The plan: The federal government would buy up "hundreds of billions of dollars" of illiquid mortgage assets at a deep discount from banks. The Treasury Department is likely to run the program directly, unlike the savings and loan crisis of the 1990s that led to the creation of the Resolution Trust Company.
"The federal government must implement a program to remove these illiquid assets that are weighing down our financial institutions and threatening our economy," said Paulson.
In the proposal sent overnight, President Bush has asked Congress for the authority to spend as much as $700 billion to purchase troubled mortgage assets and contain the financial crisis.
President Bush said Saturday that the plan matches the scope of the problem.
"It is a big package because it's a big problem," he told reporters at a joint news conference with Alvaro Uribe, the president of Colombia.
What remains to be seen is how the Treasury Department will structure the purchases and what price they'll pay.
The cost: While the proposal calls for the purchase of as much as $700 billion of bad loans, it's unknown what taxpayers will ultimately pay for the bailout.
The administration's proposal requests that Congress authorize an increase to the nation's debt ceiling. Currently, it's set to rise to $10.6 trillion for fiscal year 2009 - which runs from October 2008 through September 2009. But the proposal requests that limit be increased to $11.315 trillion to allow for the purchases of mortgage-backed assets.
The government will likely buy the assets at below-market rates and hold onto them until the market recovers. Ideally, the loans could then be sold at a gain.
"The government could make a profit, a substantial profit," said Jaret Seiberg, a financial services analyst at the Stanford Group, a policy research firm. "The pricing mechanism is going to be central."
Will it work: The jury is still out, although experts are cautiously optimistic the plan will help the housing crisis.
The plan will help banks shore up their balance sheets by removing hard-to-value assets. This would address the seemingly endless rounds of writedowns and capital raising that have been rocking the financial sector.
Without these bad loans weighing on their books, banks may be more willing to lend. Or at least that's the goal.
The problem is that the bailout will not automatically make banks profitable, nor will it stop the slide in home values that is wreaking havoc on the economy.
Will it help homeowners: It's unclear at this point. If the government buys an entire securitized loan, it could opt to help struggling homeowners by modifying the terms. This could include reducing a loan's interest rate or principal balance.
But it could prove difficult to snap up all the securities sold on a mortgage, experts said. And as long as investors still hold a piece, they could block any changes to the loan.
If the plan doesn't stem the tide of foreclosures, home prices will not stabilize and the economy will not recover, experts said.
Next steps: Lawmakers have said they'll review the plan over the weekend and plan to hold hearings on the matter next week. A deal could be hammered out as soon as next week.
CNN Correspondent Kathleen Koch contributed to this report.
First Published: September 19, 2008: 7:40 PM EDT
New bailout planned
Rescue cost: Hundreds of billions
Will it work?
The week that broke Wall Street
Escalating 'Paralympic effects' into a social civilization
With the flameout of the Paralympics, people waved good-bye to the splendor of the 29th Beijing Olympics and Paralympics, and Beijing, as the host city, has made history contributing to the entire world 40 days' ferment and jubilation, which is dubbed 'unmatchable' by many international dignitaries. The Olympic and Paralympic Games concluded with a satisfactory full stop, but the legacies left behind them will send us pondering and reflecting.
In retrospect, we were so impressed and touched by the Paralympic athletes, who competed hard for the very reward—equality and dignity. They convinced everybody that, through fierce competitions and by exerting their will power and courage to the utmost, they can savor the sacred Olympic moments as equals, despite their physical disabilities.
Thanks to the Beijing Paralympics, more disabled people will be integrated into the social life with the help of the newly built barrier-free facilities and the enhanced national awareness of respecting the disabled. People cannot help but reflect whether the Paralympics will act as a golden momentum to build up a real barrier-free society in the world's most populous country, not only conditioned to the construction of barrier-free facilities, but extended to the social mode as well.
Under the banner of the 'Two Olympics, Equal Splendor,' Beijing has greatly pushed ahead with the construction of barrier-free facilities in its seven years' preparatory efforts. The key innovation projects for barrier-free function alone have thus far amounted to more than 6,000. Even so, compared with some developed countries, China still has a long way to go in expanding the coverage of its disability assistance to all those in need, considering its large disabled population base. Currently, China has 82.96 million disabled people, accounting for 6.34 percent of its total population.
Jin Jing, Paralympic athlete, and also a torch bearer in the global tour of the Olympic flame, was once cited as saying, 'when I was abroad, I could frequently see the disabled people in the street. But back in China, I saw only a few of them go out and in the street.' Indeed, Chinese people's attitudes toward the disabled tend to be passive, sometimes negative. Many of the Chinese people think the disabled people cannot lead an active life, due to the fact that they could not move around freely as the normal people. This may help explain why there is no special lane available alongside the steps, and the walking lanes for the blind are always converted into parking lots in some places.
In this case, the Paralympics would not only open up a new vista to the disabled but also broaden the horizon for the whole nation which enables the bodily well-being people to have a 'barrier-free' access to the world of the disabled and have an in-depth understanding of their true needs. In so doing, many will believe that convenience and happiness of the disabled people serve as an important indicator showing a nation's civilization level, and a truly harmonious society will definitely remove all the barriers and prejudice for the disabled and off their life path.
Hopefully, the 'Paralympic effects' cooked up by hosting the Paralympic Games will go beyond the confines of time and space, and become a widespread and everlasting social mode throughout China.
In retrospect, we were so impressed and touched by the Paralympic athletes, who competed hard for the very reward—equality and dignity. They convinced everybody that, through fierce competitions and by exerting their will power and courage to the utmost, they can savor the sacred Olympic moments as equals, despite their physical disabilities.
Thanks to the Beijing Paralympics, more disabled people will be integrated into the social life with the help of the newly built barrier-free facilities and the enhanced national awareness of respecting the disabled. People cannot help but reflect whether the Paralympics will act as a golden momentum to build up a real barrier-free society in the world's most populous country, not only conditioned to the construction of barrier-free facilities, but extended to the social mode as well.
Under the banner of the 'Two Olympics, Equal Splendor,' Beijing has greatly pushed ahead with the construction of barrier-free facilities in its seven years' preparatory efforts. The key innovation projects for barrier-free function alone have thus far amounted to more than 6,000. Even so, compared with some developed countries, China still has a long way to go in expanding the coverage of its disability assistance to all those in need, considering its large disabled population base. Currently, China has 82.96 million disabled people, accounting for 6.34 percent of its total population.
Jin Jing, Paralympic athlete, and also a torch bearer in the global tour of the Olympic flame, was once cited as saying, 'when I was abroad, I could frequently see the disabled people in the street. But back in China, I saw only a few of them go out and in the street.' Indeed, Chinese people's attitudes toward the disabled tend to be passive, sometimes negative. Many of the Chinese people think the disabled people cannot lead an active life, due to the fact that they could not move around freely as the normal people. This may help explain why there is no special lane available alongside the steps, and the walking lanes for the blind are always converted into parking lots in some places.
In this case, the Paralympics would not only open up a new vista to the disabled but also broaden the horizon for the whole nation which enables the bodily well-being people to have a 'barrier-free' access to the world of the disabled and have an in-depth understanding of their true needs. In so doing, many will believe that convenience and happiness of the disabled people serve as an important indicator showing a nation's civilization level, and a truly harmonious society will definitely remove all the barriers and prejudice for the disabled and off their life path.
Hopefully, the 'Paralympic effects' cooked up by hosting the Paralympic Games will go beyond the confines of time and space, and become a widespread and everlasting social mode throughout China.
Wall Street — Meet Avenue Q, Nice Knowing You
Everyone I know thought that this sell trading was accidental. It is not an accident at all. This is pure poetry.
My prepare was plain on paper. Still, while it is right to say that I wrecked up richer than median salary earner, also erudition a great sell about a fabled and exotic way of life.
Last night CBC's late newscast agreed a fairly disturbing shot of Wednesday's minimalist ultimate ceremony at the New York Stock Exchange. Today Germany's Der Spiegel has the backstory.[1] The initial propose actually called for indulge. On Wednesday sundown, actress Christy Carlson Romano was said to sphere the final bell on the floor of the New York Stock Exchange (NYSE) to smudge her unveiling in the Broadway musical "Avenue Q." She theater two roles on platform — a romantic kindergarten teaching ..keep rendition.
Many people cleanly deem that it is unnecessary to spare money on it. How about to hear this:
Cowen's Louis Miscioscia this morning trimmed his estimates on the reduce electronics manufacturers Flextronics (FLEX), Jabil (JBL) and Sanmina-SCI (SANM) next a current sequence of warnings from companies like Corning (GLW), Dell (DELL), Ingram Micro (IM), Nokia (NOK), Nortel (NT) and others. Miscioscia says Cowen's checks find IT costs still share up well in the U.S., but with Europe weaker. And he comments that there are concerns that "if the keep bazaar doesn't soothe shortly, .
I impose myself to plight some of my preferred posts, oh, for me it is actually tiring, they are my treasure. Should I split my "treasure"? Maybe a little bit:
American International Group Inc.'s residence in the Dow Jones Industrial Average has proven to be a direct one — shortest of any Dow limb in nearly 75 living, in statement. Dow Jones Indexes, owned by Dow Jones & Co. (which publishes the Wall Street Journal), is dumping the sell and replacing it with Kraft Foods Inc., which would have to work very hard to equal the dismal performance of the visitors it is replacing. The party's life in the Dow — less than four-and-a-half being
My prepare was plain on paper. Still, while it is right to say that I wrecked up richer than median salary earner, also erudition a great sell about a fabled and exotic way of life.
Last night CBC's late newscast agreed a fairly disturbing shot of Wednesday's minimalist ultimate ceremony at the New York Stock Exchange. Today Germany's Der Spiegel has the backstory.[1] The initial propose actually called for indulge. On Wednesday sundown, actress Christy Carlson Romano was said to sphere the final bell on the floor of the New York Stock Exchange (NYSE) to smudge her unveiling in the Broadway musical "Avenue Q." She theater two roles on platform — a romantic kindergarten teaching ..keep rendition.
Many people cleanly deem that it is unnecessary to spare money on it. How about to hear this:
Cowen's Louis Miscioscia this morning trimmed his estimates on the reduce electronics manufacturers Flextronics (FLEX), Jabil (JBL) and Sanmina-SCI (SANM) next a current sequence of warnings from companies like Corning (GLW), Dell (DELL), Ingram Micro (IM), Nokia (NOK), Nortel (NT) and others. Miscioscia says Cowen's checks find IT costs still share up well in the U.S., but with Europe weaker. And he comments that there are concerns that "if the keep bazaar doesn't soothe shortly, .
I impose myself to plight some of my preferred posts, oh, for me it is actually tiring, they are my treasure. Should I split my "treasure"? Maybe a little bit:
American International Group Inc.'s residence in the Dow Jones Industrial Average has proven to be a direct one — shortest of any Dow limb in nearly 75 living, in statement. Dow Jones Indexes, owned by Dow Jones & Co. (which publishes the Wall Street Journal), is dumping the sell and replacing it with Kraft Foods Inc., which would have to work very hard to equal the dismal performance of the visitors it is replacing. The party's life in the Dow — less than four-and-a-half being
Yen Falls on Possible US Bailout Plan and Financial Trading
If you have a desire for pecuniary trading, then come and have.
The cash was generally lessen in explosive trading Thursday but later pared losses as US stocks rose on prospects the government is formulating a plan to steady economic markets and regulators and annuity funds took steps to restrain rapid promotion. The yen floor as attempt hate decreased after NY Senator Charles Schumer proposed a new charity to pump assets into disturbed monetary companies and help home owners. The greenback reversed past losses ..[more].
Do not suppose for a moment that I am open to be successful to finish almost every waking hour by not working at a feature brief that I passion.
The collapse of so many foremost financial institutions in the history year, and over the ancient few days especially, is hard to fathom in its atrocity. Sometimes you ought a good visual to put stuff in perspective. The New York Times has an interactive full up on its position that sweet greatly says it all. It shows that $4 trillion has been wiped off the full bazaar capitalization of the U.S. provide advertise because last October. Of that, virtually $1 trillion is from the decline in the monetary sector.
It describes, in meticulous specify:
Der Spiegel: Is chronicle repeating itself? That's certainly a question many Russians must be asking themselves. Almost exactly 10 time after the economic bang of 1998, Russian markets are once again in unrest. On Sept. 16, Moscow's chief stockpile replace, MICEX, fell by a jaw-falling 17.5 percent, the principal one-day defeat in a decade, while the rival RTS chat was down by 11.5 percent. The unbound drop sustained on Sept. 17, causing Russia's pigs promote manager to suspend trading on ..
The cash was generally lessen in explosive trading Thursday but later pared losses as US stocks rose on prospects the government is formulating a plan to steady economic markets and regulators and annuity funds took steps to restrain rapid promotion. The yen floor as attempt hate decreased after NY Senator Charles Schumer proposed a new charity to pump assets into disturbed monetary companies and help home owners. The greenback reversed past losses ..[more].
Do not suppose for a moment that I am open to be successful to finish almost every waking hour by not working at a feature brief that I passion.
The collapse of so many foremost financial institutions in the history year, and over the ancient few days especially, is hard to fathom in its atrocity. Sometimes you ought a good visual to put stuff in perspective. The New York Times has an interactive full up on its position that sweet greatly says it all. It shows that $4 trillion has been wiped off the full bazaar capitalization of the U.S. provide advertise because last October. Of that, virtually $1 trillion is from the decline in the monetary sector.
It describes, in meticulous specify:
Der Spiegel: Is chronicle repeating itself? That's certainly a question many Russians must be asking themselves. Almost exactly 10 time after the economic bang of 1998, Russian markets are once again in unrest. On Sept. 16, Moscow's chief stockpile replace, MICEX, fell by a jaw-falling 17.5 percent, the principal one-day defeat in a decade, while the rival RTS chat was down by 11.5 percent. The unbound drop sustained on Sept. 17, causing Russia's pigs promote manager to suspend trading on ..
Baylor-Connecticut, Nfl Betting Spread
It would be tranquil to prevent nfl betting increase. Just do not procrastinate so long.
Even still it comes from another earth far, far away, (that's kidding) and even tough it is different, peculiar and a little abnormal, they deserve obey and understanding just like all of articles on Internet, because it is wholly amazing new idea of nfl betting hang.
The Connecticut Huskies horde the Baylor Bears and OffshoreInsiders.com has the formal preview for sports gambling and school football allotment picks. Sportsbooks have UConn as a 12-spit favorite and a calculate of 51. Each panel is 1-1 against the swell with both playing a non-lined game. This is Baylor's first street tough, but no look-early as they have a bye next week. After getting smashed by Wake Forest in week 1, they disposed of Northwestern State and Washington State by pooled 96-23. .. Read the surplus of this entry.
I found this one on nowadays, pretty interesting:
19 Sep Posted by MFH as NFL, Weekly NFL Picks Welcome everybody to the third installment of the 2008 book of MFH's investment advice. The first two weeks didn't go as well as I would have hoped (at slightest I didn't have you invest in Lehman), but we are slowly structure momentum caption into the middle of the NFL term. The good newscast is that I feel better about this week's prospects than last week (when I went .500). The bad rumor is ..[next].
Therefore, my counsel to you is get into it!
OK, so I'm not too lucky about untaken 2-4 to boon the time. Last week we got screwed by the bad call in the Chargers/Broncos diversion otherwise we would have been meeting in a dressed blackhead at .500. Now, we'll basic a 3-0 week to pour back to life. Having seen the teams play two weeks now, I think I have a much better feel for what these squads pass to the roll. Without more ado, it's Doc Brown's NFL Picks brought to you by Betus.com which has you enclosed for all your football gambling .. Read the respite of this door.
I am somewhat opportune I found what I like.
Even still it comes from another earth far, far away, (that's kidding) and even tough it is different, peculiar and a little abnormal, they deserve obey and understanding just like all of articles on Internet, because it is wholly amazing new idea of nfl betting hang.
The Connecticut Huskies horde the Baylor Bears and OffshoreInsiders.com has the formal preview for sports gambling and school football allotment picks. Sportsbooks have UConn as a 12-spit favorite and a calculate of 51. Each panel is 1-1 against the swell with both playing a non-lined game. This is Baylor's first street tough, but no look-early as they have a bye next week. After getting smashed by Wake Forest in week 1, they disposed of Northwestern State and Washington State by pooled 96-23. .. Read the surplus of this entry.
I found this one on nowadays, pretty interesting:
19 Sep Posted by MFH as NFL, Weekly NFL Picks Welcome everybody to the third installment of the 2008 book of MFH's investment advice. The first two weeks didn't go as well as I would have hoped (at slightest I didn't have you invest in Lehman), but we are slowly structure momentum caption into the middle of the NFL term. The good newscast is that I feel better about this week's prospects than last week (when I went .500). The bad rumor is ..[next].
Therefore, my counsel to you is get into it!
OK, so I'm not too lucky about untaken 2-4 to boon the time. Last week we got screwed by the bad call in the Chargers/Broncos diversion otherwise we would have been meeting in a dressed blackhead at .500. Now, we'll basic a 3-0 week to pour back to life. Having seen the teams play two weeks now, I think I have a much better feel for what these squads pass to the roll. Without more ado, it's Doc Brown's NFL Picks brought to you by Betus.com which has you enclosed for all your football gambling .. Read the respite of this door.
I am somewhat opportune I found what I like.
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