US President George W Bush has called for co-ordinated action by leading industrialised countries to tackle the worldwide credit crunch.

A common response must be "well thought-out", Mr Bush said.

He was speaking as world markets remained volatile amid ongoing uncertainty, despite last week's $700bn (£380bn) US rescue package.

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Hasn't he done enough damage yet?...

October 8, 2008

Markets Plunge Despite Hint of Rate Cut

By MICHAEL M. GRYNBAUM

On Wall Street, the fear refuses to go away.

Stocks plunged on Tuesday afternoon — shedding 200 points in the final hour of trading alone — despite reassurances from the chairman of the Federal Reserve, Ben S. Bernanke, that the central bank was prepared to lower interest rates, words that many investors had said they were waiting to hear.

“You are getting all the things that you would think the equity markets would respond very favorably to,” Steve Sachs, director of trading at Rydex Investments, said. “But at this point it just doesn’t seem to be doing it. It’s the attitude of “Sell” — regardless of what the news is.”

The Dow Jones industrial average, which had lumbered downward from early in the session, accelerated its losses in the final hour and ended down 508.39 points, breaking below the 9,500 mark to close at 9,447.11.

The broader Standard & Poor’s 500-stock index fell by 5.7 percent, ending below 1,000 for the first time in five years.

Shares of banks and real estate firms shouldered the biggest losses, with Bank of America, Merrill Lynch and Morgan Stanley all losing about 25 percent.

Morgan Stanley was plagued by rumors on trading desks that a financing deal with a Japanese bank had fallen through; officials at Morgan quickly moved to reassure investors that the deal was in fact still on track.

But a disappointing earnings report from Bank of America, released Monday night, led to increased jitters about the health of Wall Street banks. Bank of America has been perceived as one of the few winners, having subsumed Merrill Lynch’s name-brand brokerage business and maintaining a relatively clean balance sheet. But the bank slashed its dividend on Monday and said its third-quarter profit fell. Those anxieties played into a broader fear of a deep recession that could stem from the current crisis.

Tuesday’s declines bring the losses of the last two weeks to staggering levels. The S.& P. has lost more than 17 percent in just two weeks.

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Gus: when CEOs get lavish bonuses for services equally well or badly done (see linked article below), one can be expecting that the bonus would take a hit should it be invested in more shonky wedges hedges that'd make a rolacosta look like a kindy slippery dip... Thus one federal investigation should follow the trail of the Bonuses. For example 300 million bux does not evaporate overnight into the belly of offshore tax heavens. Thus should the retiring CEOs generously acquired bonus bux be invested in gold for example, we can be certain they knew what was coming — basically what they had created — despite the claim: "with hindsight" we would have done thing differently...

------------------------

October 8, 2008

Big Insurer’s Spending Habits Disclosed

By SHARON OTTERMAN

A day after questioning the compensation and spending at the bankrupt Lehman Brothers, lawmakers exploring the causes of the credit crisis were treated on Tuesday to examples of the spending habits at another troubled financial firm.

A week after the insurance giant, the American International Group, received an $85 billion federal bailout, its life insurance subsidiary, AIG General, held a weeklong retreat for its top sales agents at the exclusive St. Regis Resort in Monarch Beach, Calif. Expenses for the week, lawmakers were told, totaled $442,000, including $200,000 for hotel rooms, $150,000 for food and $23,000 in spa charges.

In addition, the former A.I.G. executive who led the London-based division whose implosion is largely blamed for the insurance giant’s downfall, Joseph J. Cassano, continues to receive $1 million a month from the company, on top of the $280 million he received in the last eight years.

And even after A.I.G. reported $5 billion in losses in the final quarter of 2007, its chief executive at the time, Martin J. Sullivan, argued before a compensation committee that executives should receive performance bonuses. He received $5 million.

“This unbridled greed, this callous abuse of trust of hard-working Americans’ savings is just so disgusting it is hard to put into words, and the anger level in America is coming, as it often has, at Wall Street," Representative Mark Souder, Republican of Indiana, said.

--------------------

Can we begrudge if these generous fellows kept the hotel industry afloat for a week? 

Iceland Turns to Russia for $5.4Bln Bailout

08 October 2008By Jessica Bachman / Staff WriterAs Iceland teetered on the precipice of a complete financial meltdown Tuesday, the country's central bank reported that Russia was coming to its rescue with a loan of 4 billion euros ($5.4 billion).

The report turned out to be premature, as negotiations are in the early stages, but Moscow did receive an official request late Tuesday and is considering the loan, a gesture that may be motivated more by politics than economics.

"We will consider it," Finance Minister Alexei Kudrin said Tuesday, Interfax reported. "Iceland has a reputation for strict budget discipline and has a high credit rating," Kudrin said. "We're looking favorably at the request."
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Gus: Ironic that the Icelanders have to turn to the Ruskies to fix what the Yanks broke...

Try Google's new Book Search facility ... try " The Costello Memoirs" for example ...  http://books.google.com.au/books?q=%22The+Costello+Memoirs%22 Now that's a fully lame duck !!!!!

Fed Gives A.I.G. $37.8 Billion Loan

 By THE ASSOCIATED PRESS

 

WASHINGTON (AP) — The Federal Reserve has agreed to provide the insurance giant, the American International Group, with a loan of up to $37.8 billion, on top of one made to the troubled company last month.

Under the new program, the Federal Reserve Bank of New York will borrow up to $37.8 billion in investment-grade, fixed income securities from A.I.G. in return for cash collateral. These securities were previously lent by A.I.G.’s insurance company subsidiaries to third parties.

Last month, the Fed provided an $85 billion line of credit to the company, which was on the brink of filing for bankruptcy protection.

----------------------------------

Seeing that the executives  took investors and taxpyers to the hotel cleaners after the first rescue, see:

(Big Insurer’s Spending Habits Disclosed

By SHARON OTTERMAN

A day after questioning the compensation and spending at the bankrupt Lehman Brothers, lawmakers exploring the causes of the credit crisis were treated on Tuesday to examples of the spending habits at another troubled financial firm.

A week after the insurance giant, the American International Group, received an $85 billion federal bailout, its life insurance subsidiary, AIG General, held a weeklong retreat for its top sales agents at the exclusive St. Regis Resort in Monarch Beach, Calif. Expenses for the week, lawmakers were told, totaled $442,000, including $200,000 for hotel rooms, $150,000 for food and $23,000 in spa charges.)

... one should be happy: the spa bath water was actually full of soothing red ink. And this 120 billions bubble bath is on top of the 700 billion banquet, on top of the Fannie Mae and Freddie Mac handouts to buy party hats, plus a .5 cut in interest rates on chocolate cakes, and soon we'll give you an extra 10 bux free for every 50 you borrow as long as you buy something...anything, as long as it's a plasma TV...

"Break the Glass" was the code-name high-level Treasury Department figures gave the $700 billion bailout; it was to be used only as a last-resort measure. 

Now millions have been sprayed and damaged by broken glass. 

But more than a decade ago, a woman you're likely never to have heard of, Brooksley Born, head of the Commodity Futures Trading Commission - a federal agency that regulates options and futures trading - was the oracle whose warnings about the dangerous boom in derivatives trading just might have averted the calamitous bust now engulfing the US and global markets. Instead she was met with scorn, condescension and outright anger by former Federal Reserve Chair Alan Greenspan, former Treasury Secretary Robert Rubin and his deputy Lawrence Summers.  

In fact, Greenspan, the man some affectionately called "The Oracle," spent his political capital cheerleading these disastrous financial instruments. 

On Thursday, the New York Times ran a masterful and revealing front page article exposing the culpability of Greenspan, Rubin and Summers for the era of dangerous turbulence we live in. 

The Woman Who Could Have Prevented This Financial Mess Was Silenced by Greenspan, Rubin and Summers

Party Like It's 1964

By Richard Cohen
Tuesday, October 21, 2008; A17

A column, like a good movie, should have an arc -- start here, end there and somehow connect the two points. So this column will begin with the speech Condi Rice made to the Republican National Convention in 2000 in praise of George W. Bush and end with Colin Powell's appearance Sunday on "Meet the Press" in praise of Barack Obama. Between the first and the second lie the ruins of the GOP, a party gone very, very wrong.

It is hard to avoid the conclusion that Bush and now John McCain have constructed a mean, grumpy, exclusive, narrow-minded and altogether retrograde Republican Party. It has the sharp scent of the old Barry Goldwater GOP -- the angry one of 1964 and not the one perfumed by nostalgia -- that is home, by design or mere dumb luck, to those who think that Obama is "The Madrassian Candidate." Karl Rove, take a bow.

It is worth remembering that both Rice and Powell spoke at that Philadelphia convention. And it is worth recalling, too, that Bush ran as a "compassionate conservative" and had compiled a record as Texas governor to warrant the hope, if not the belief, that he was indeed a different sort of Republican. When he ran for reelection as governor in 1998, he went from 15 percent of the black vote to 27 percent, and from 28 percent of the Hispanic vote to an astounding 49 percent. Here was a coalition-builder of considerable achievement.

Now, all this is rubble. It is not merely that Barack Obama was always going to garner the vast majority of the black vote. It is also that the GOP, under Rove and his disciples in the McCain campaign, has not only driven out ethnic and racial minorities but a vast bloc of voters who, quite bluntly, want nothing to do with Sarah Palin. For moderates everywhere, she remains the single best reason to vote against McCain.

-------------------

Gus: Dubya duck not only managed to destroy Iraq, the US economy, the world economy, the notion of truth, the market, real value religious beliefs, currencies, and many more other stuff while stuffing up big  — all beyond belief — he also managed to destroy his own Party... The GOP is running ragged — a bit like the Federal Liberal Party in Australia, despite Malcolm doing serious gravitas stand up comic impressions at every opportunity... Yes it takes a while for compost to fully decompose and be used as fertilizer... But sometimes compost may contain pollutants and material that need to be remove otherwise it will be toxic... Meanwhile the stench is hard to dispel. New South Wales new Labor government being a case in point despite the promise of hard new yakka...

see toon at top...

From Tomdispatch

...

So I took a plunge into humor and wrote a mock children's ABC book that I dubbed "George's Amazing Alphabet Book of the Contemporary World, or Al-Qaedas All Around." I claimed that the manuscript, produced by George W. himself, had been leaked to my TomDispatch.com website by "a senior official in one of our intelligence agencies."

Maybe it wasn't Jon-Stewart-worthy, but I posted it anyway as my commentary of the week and thought no more about it until the first angry emails began appearing in the TomDispatch mail box. A number of readers claimed I had been "gulled." I shoulda known! The President could never have written such a document! It had obviously been produced by the CIA! No, the Secret Service! No…

A perfectly sane friend rang up, wondering whether the manuscript could possibly be genuine -- or was I pulling a leg or two? Irritated readers assured me that it was a total fraud and I, a total fool for ever taking the word of that senior intelligence official.

I was stunned. I hadn't been trying to fool a soul, just make a passing point or two about our President and his people. Still, I got the message -- an instant lesson in Bush-era online reality. You couldn't out-absurd this administration. You couldn't write a "document" so extreme that some readers wouldn't mistake it for the real thing. That was the extremity of our moment -- thank you, George W!

.....

The Times US presidential rankings - the 10 worst to have held office...
A total of 42 men have held the highest office in the United States, but how do they rank against each other? Find out this week as we pit schmoozers against losers in the greatest presidential debate yet...

a panel of experts from The Times has ranked every one of the Commanders-in-Chief - and here are the very worst

42. James Buchanan
1857-61 (Democratic)
A poll of American historians recently selected Buchanan’s failure to prevent the American Civil War as the greatest single mistake made by any president and our panel agree that he was the worst ever President.

41. Franklin Pierce
1853-57 (Democratic)

40. Martin Van Buren
1837-41 (Democratic)

39. William Harrison
1841 (Whig)

37= Richard Nixon
1969-74 (Republican)

37= George W. Bush
2001-2009 (Republican)

A dead heat between the unpopular Bush and the dastardly Richard Nixon.

The September 11 attacks, eight months into his presidency, created a central focus for the Bush administration that lasted into his second term. Bush responded by declaring a “war on terror” and leading military invasions of Iraq and Afghanistan as part of his doctrine of pre-emptive military action. The lengthy operations have plummeted in popularity throughout his time in office.

Domestically, he implemented tax cuts and the “no child left behind” education programme but has been criticised for his failure to deal with the impact of Hurricane Katrina and the collapse of the US financial market.

"Bush Jr. invaded Iraq based on faulty intelligence and then catastrophically mismanaged the war, dragging America's name through the mud." Chris Ayres, Los Angeles correspondent.

---------------------

Gus: I am disappointed by the "panel"... I thought no-one could be worse that Dumbya the Minus. And I will hold this belief close to my sad heart till the day he vanishes into the sunset.

Not only DumbyaDuck managed to do all the crappy things, including war in Iraq, mentioned above by the emeritus experts, he also destroyed the entire planet's human economy (For years, President Bush and his advisers expressed frustration that the White House received little credit for the nation's strong economic performance [see Greenspan waking up in his coffin after he'd help Bushit towards the financial catastrophe] because of public discontent about the Iraq war. AHahahahaha!!!!) AND presided over the greatest ignorance of things-natural in terms of Climate Change, something that will have bad-really-bad repercussion for the next 500 years at least. No other loony tune president can claim this size of cock up, even if some people died under their stewardship. Hey, even more than a million people died of violent death because of this present midget presidential gigantic failure. More animal species have vanished, more habitat destroyed...

Hey, Panel? What else do you want from a failure who thinks digging a trench around a hole is building a mountain...?

Come on!!! revise that list! Nixon was bad, but at least he had the intelligence to vamoose himself. The little bug we have in the white house at the moment thinks he's ants pants!

And we're letting the cockroach get away with it! We should put ourselves in the nuthouse...! We're bonkers!!!!

Err... May be I got it all wrong... May be DumbyaDuck could be very very clever... He managed to slow world population growth with cleverly targeted wars... reduced unemployment by expanding the army and managed to place the world economies into such a bad recession, a new frugal capitalist system is needed — all without telling anybody he was doing it to reduce global warming, because his mob of neocons would not have approved... Pigs might fly...

see toon at top...

A surprise visit by US President George Bush to Iraq has been overshadowed by an incident in which two shoes were thrown at him during a news conference.

An Iraqi journalist was wrestled to the floor by security guards after he called Mr Bush "a dog" and threw his footwear, just missing the president.

The US president has now continued to Afghanistan to inspect troops there.

He arrived before dawn at Bagram air force base, and is due to hold talks with President Hamid Karzai.

Earlier in Baghdad, Mr Bush and Iraqi PM Nouri Maliki signed the new security agreement between their countries.

----------------

Gus: actually the shoes only missed dubya because he ducked...

Addicted to Bush

By PAUL KRUGMAN

For a couple of years, it was the love that dared not speak his name. In 2008, Republican candidates hardly ever mentioned the president still sitting in the White House. After the election, the G.O.P. did its best to shout down all talk about how we got into the mess we’re in, insisting that we needed to look forward, not back. And many in the news media played along, acting as if it was somehow uncouth for Democrats even to mention the Bush era and its legacy.

The truth, however, is that the only problem Republicans ever had with George W. Bush was his low approval rating. They always loved his policies and his governing style — and they want them back. In recent weeks, G.O.P. leaders have come out for a complete return to the Bush agenda, including tax breaks for the rich and financial deregulation. They’ve even resurrected the plan to cut future Social Security benefits.

But they have a problem: how can they embrace President Bush’s policies, given his record? After all, Mr. Bush’s two signature initiatives were tax cuts and the invasion of Iraq; both, in the eyes of the public, were abject failures. Tax cuts never yielded the promised prosperity, but along with other policies — especially the unfunded war in Iraq — they converted a budget surplus into a persistent deficit. Meanwhile, the W.M.D. we invaded Iraq to eliminate turned out not to exist, and by 2008 a majority of the public believed not just that the invasion was a mistake but that the Bush administration deliberately misled the nation into war. What’s a Republican to do?

You know the answer. There’s now a concerted effort under way to rehabilitate Mr. Bush’s image on at least three fronts: the economy, the deficit and the war.

------------------

Gus: Yes it was the best economic destruction, the geatest deficit by miles and the best illegal war for no reason... Fan-bloody-tastic!!!.... As long as the rich got tax cuts, all was well in the best of the worlds... see toon at top.

IMHO Paul Klugman has it right viz...

“You know the answer. There’s now a concerted effort under way to rehabilitate Mr. Bush’s image on at least three fronts: the economy, the deficit and the war”. [Substitute Abbott for Bush?]

And how do they do that?  The unelected media barons!

IMHO Gus, there is no limit to the political and personal crimes that any form of media is capable of as long as they have a large audience of voters.

The only pre-requisite being that the citizens of the nation have been hoodwinked into the US style of “democracy” and must have a fortune to spend on it.  Doesn’t say much for the chances of the middle to lower classes eh?

Note the similarities in Australia when the wealthy foreign miners put $100 million in ads against the government of Australia, all favoring the opposition. Then, when the Government negotiated a deal with the biggest blackmailers, the smaller ones led by a traitorous Australian named Forrest waited until an election was called before they threatened the government for their share of the ransom.

All about money – not wisdom; not duty of care, not sustainable foreign policies; not regulating the massive greed of the Bankers and ruining many countries in the bargain.  Oh no, the “Powers that be” want some clown who has a past of majestic failures in every enterprise undertaken but who will do as he is told. [Substitute Abbott for Bush?]

That is the modern America with a population so brain washed that they have lost the belief in their Constitution to the point where they are in constant failure of its spirit and intent.

So Howard refused a Bill of Rights for us and yet, he thought the US was his example of a democracy.  Fair dinkum.

God Bless Australia Howard and get back to your sponsors in the US. NE OUBLIE.