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salvage expert .....

If Sen. Barack Obama wakes up as the president-elect on Nov. 5, he will immediately assume responsibility for fixing a shredded economy while the Bush administration is still in office.

If Sen. John McCain wins the election, he will face an imminent confrontation over spending with a Democratic Congress called back into special session with the goal of passing a new economic stimulus package.

Either way, the77-day period between Election Day and Inauguration Day, traditionally known simply as the transition, is sure to present difficult challenges to a new president buffeted by intense forces, political and economic, without any chance to recover from the long and bruising campaign.

The challenge of putting the country back on a sound financial track has altered what under the best of circumstances would have been a frenzied period spent forming a new government. Instead, Obama or McCain will be forced to assemble a new administration even as he helps shape policies to ward off further declines in the economy.

And whoever is the new president will be under intense pressure from his own allies to live up to his campaign promises. Antiwar groups would press Obama to start the process of ending the war in Iraq, and conservatives would demand tax cuts from McCain. Either side would want to know that its candidate has an agenda to enact on his first day in the White House. With the outcome of the election still in doubt, neither campaign is eager to discuss plans for that day or the transition that precedes it, other than to acknowledge the urgent circumstances the 44th president will confront. 

Arduous Transition Awaits Next President

350 Bn dollars only...

The markets are bracing for a tough day tomorrow when an estimated £200bn worth of complex insurance contracts related to the collapse of the investment bank Lehman Brothers is expected to be settled. The settlement of the so-called credit default swaps related to Lehmans - a kind of insurance policy against a failure to pay corporate bond interest - could set off another bout of turbulence on the stock markets, as some firms will be unable to pay up.

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Nearly half (47 per cent) of the US rescue package needed to pay debts for Lehman Bros? then about 10 per cent of the rescue package allocated for executives salaries and bonuses? left over 40 per cent ? Turbulence? More like a hurricane...

reluctance to join other world leaders...

Russia in No Rush For Crisis Summit

20 October 2008

By Anna Smolchenko / Staff Writer

The Kremlin signaled Sunday that it was in no hurry to confirm its participation in an international summit called by U.S. and EU leaders to tackle the global financial crisis over the weekend.

The apparent reluctance to join other world leaders came as a senior government official said that unlike in the West, there was no crisis in Russia.

A Kremlin spokesman said Russia would only participate in the summit if a convenient date could be agreed upon. "All leaders have very tight schedules," he said, speaking on customary condition of anonymity. "So far, a date that would suit everybody has not been found."

Few details about the summit have been released, making it too early to say who might represent Russia if it decides to participate, said Dmitry Peskov, spokesman for Prime Minister Vladimir Putin.

U.S. President George W. Bush on Saturday called for a summit aimed at reforming the international financial system while protecting free markets. French President Nicolas Sarkozy and European Commission President Jose Manuel Barroso, who discussed the summit with Bush at his Camp David retreat on Saturday, suggested holding the summit in New York next month, after the U.S. presidential election on Nov. 4.

Moscow's lack of enthusiasm might be linked to lingering resentment that Washington threatened to derail its WTO bid and limit its contacts with the Group of Eight in response to its invasion of Georgia in August. Several Western countries sought to isolate Russia after criticizing it for its actions in preventing Georgia's breakaway region of South Ossetia from being retaken by Georgian forces.

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Hungary has found itself at the sharp end of the global financial crisis, calling in the International Monetary Fund to support its struggling currency and economy after a 3% rise in interest rates last week failed to reassure the markets.

Hungary's problems are twofold.

The government had recently been trying to cut back borrowing and spending, but after years of high spending it has failed to make deep enough cuts to reassure the international markets.

The other problem is that many Hungarians have been borrowing money in foreign currencies to buy their homes, cars or even to support their businesses.

Those borrowings in euros, Swiss francs and even Japanese yen had the advantage that they were at much lower interest rates than those in Hungarian forints, and when the forint was a stable currency they looked very attractive.

But now that the forint is falling sharply the cost of repaying those loans is rising massively.

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"When in Rome, pay with Roman dollars. When at home pay with your own senses..." says the old Gustaphianan proverb...

I remember in the late 1980s, when the world economy went ass-up and the Aussie battler took a dive, many sound Aussie business went down the gurgler because they had borrowed a bit of nosh in Swiss Francs. Boom. What was a small easy debt became an insurmountable mountain. Most businesses I traded with had money but kept shifting it between Australia, the US and Hong Kong so the could "hedge' against the price of manufacture and royalties. Those who'd borrowed in Swiss Francs took a mega nose dive below survival...

If my memory is correct, some banks may have been sued for "advising" to borrow in SF without warning about the potential problems or for only mentioning them in the smallest print on page 15 of the gloss-over contracts. Who knows what happened...