Bailout Vote Fails – Stock Market Drops 777 Points
The stock market on Monday suffered its most devastating collapse since the 1987 crash as shellshocked investors dumped shares en masse after the House voted down a proposed $700-billion rescue of the financial system.
The unexpected defeat of the bailout package fanned fears that the most debilitating financial crisis since the Great Depression could intensify.
The Dow Jones industrial average sank 777 points — the largest point drop in its 112-year history. The Standard & Poor’s 500 index plunged 8.8%, its sharpest decline since Black Monday two decades ago, while the Nasdaq composite index plummeted 9.1%.
The tense credit markets tightened further as anxiety-ridden investors rushed into super-safe Treasury securities, pushing their yields down.
Notice the number of points the market fell, 777…. The world will mark this up to coincidence. I believe it’s the unfolding of bible prophecy in our day. This nation has turned it’s back on God, I believe there is a warning from God himself in the events that took place today. Few will listen, fewer still will hear.
Read more on God’s number, 7
“The financial markets are in panic,” said John Spinello, a Treasury market strategist at Jefferies Group Inc. in New York. “And until politicians realize that, and until Main Street America realizes that it’s not a Wall Street problem — it’s a Wall Street and a Main Street problem — the financial markets are going to be volatile and the decline is going to be hard to arrest.”
The flight to U.S. government securities, along with news of several major bank bailouts in Europe, boosted the value of the dollar against most major currencies.
Prices of oil and other commodities, already down early Monday on fresh concern about the global economy, accelerated their slides after the House vote. Crude futures tumbled $10.52, or 9.8%, to $96.37.
The day began with global stock markets falling on the new signs of financial stress in Europe and fears that the rescue package wouldn’t quickly ease a logjam in the credit markets or stave off a deep economic downturn.
Gold and Silver Dealers Report Unprecedented Shortage
A surge for demand in gold and silver has resulted in an unprecedented shortage of the metals for retail investors in recent days, according to Gold and Silver Investments, a Dublin-based firm that allows retail investors to speculate on movements in the value of precious metals.
Gold and Silver Investments director Mark O’Byrne said the supply of gold and silver available for small retail investors suffered a dramatic deterioration within hours on Friday, as wholesalers reported that government mints and refiners, the primary suppliers of the metals, had stopped offering new supplies.
‘‘It’s absolutely unprecedented,” said O’Byrne, who said the shortages were likely to drive up the costs of gold and silver in the secondary market.
‘‘This did not happen even in the 1930s and the 1970s, and will result in markedly higher prices in the coming months.”
According to O’Byrne, gold and silver were now only easily accessible in the primary market, which consisted of central banks and other major traders of the precious metals.
However, he said that minimum transaction sizes in this market were out of reach for most retail investors – at approximately $350,000 for gold and $135,000 for silver.
U.S. and Israel On Collision Course Over Iran Nukes?
Former Ambassador Shoval: ‘Due to Iranian nuclear threat, time has come to upgrade Israel’s NATO status’ ‘
Deployment of US radar missile system in Israel maybe attempt to tie Israel’s hands or help defend the country in wake of joint operation against Iran’
‘Israel and US may be on a collision course over military strike on Iran’s nuclear facilities’ Read more
New York Prepares For Large Earthquake
Russia Preparing For Nuclear Confrontation?
Russia announced an overhaul of its strategic nuclear forces and army yesterday, in the clearest sign yet that Moscow may be preparing for a possible full-scale military confrontation with the US and Nato.
Speaking after Russia carried out its biggest military exercises since the cold war, Dmitry Medvedev, the president, said Russia would build a space defencse system and a fleet of nuclear submarines by 2020.
This summer’s brief war with Georgia, which led to a further rift between Moscow and the west, showed the need for Russia to have a strong military in a state of “permanent readiness”, Medvedev said.
His defence initiative is the biggest in Russia for at least a decade. It comes amid bitter opposition from Moscow to Washington’s plan to site a missile defence system in central Europe – a project the Kremlin says upsets Europe’s strategic balance. The move is also a riposte to US-backed plans for Georgia and Ukraine to join Nato.
Moscow opposes Nato’s further expansion, arguing that it challenges its regional “privileged interests”. Moscow also accuses the US of encouraging, and even participating in, Georgia’s attack on the breakaway enclave of South Ossetia.
“Just recently we had to rebuff aggression unleashed by the Georgian regime. As we discovered, a local smouldering conflict – even occasionally a frozen one – can flare up into a genuine war,” Medvedev said, addressing Russian troops.
He said Russia needed a “guaranteed nuclear deterrent system” in place by 2020. The armed forces had to be prepared for “various political and military scenarios,” he warned.
He promised large-scale construction of warships, including nuclear submarines armed with cruise missiles, and also announced plans for a system of air and space defence. The president promised to improve living conditions for Russian soldiers, as well as better military education and training.
Backlash to Obama Truth Squad In Missouri
September 28, 2008 by admin
Filed under Stories Of Interest
Following legal threats by Missouri state law-enforcement officials supporting Barack Obama against presidential campaign ads that appeared to be false or misleading, Gov. Matt Blunt today likened the intimidation to “police state tactics.”
“St. Louis County Circuit Attorney Bob McCulloch, St. Louis City Circuit Attorney Jennifer Joyce, Jefferson County Sheriff Glenn Boyer, and Obama and the leader of his Missouri campaign Senator Claire McCaskill have attached the stench of police state tactics to the Obama-Biden campaign,” said Blunt in a statement released today. “What Senator Obama and his helpers are doing is scandalous beyond words, the party that claims to be the party of Thomas Jefferson is abusing the justice system and offices of public trust to silence political criticism with threats of prosecution and criminal punishment.”
The statement came after the law enforcement officials pledged to form a “truth squad” to halt ads that, among other things, claimed Obama was not a Christian or that he was not planning to cut taxes on Americans other than the wealthy.
“If they’re not going to tell the truth, somebody’s got to step up and say, ‘That’s not the truth. This is the truth,’” McCullogh told KMOV-TV in St. Louis.
The effort appeared to be part of a move by the Obama campaign to block advertisements to which it objects. The campaign also sent “threatening” letters to several news agencies in Pennsylvania and Ohio demanding they stop airing ads exposing Obama’s gun stance, according to the National Rifle Association.
German Finance Minister – US Will Lose Financial Superpower Status
The US will lose its role as a global financial “superpower” in the wake of the financial crisis, Peer Steinbrück, the German finance minister, said on Thursday, blaming Washington for failing to take the regulatory steps that might have averted the crisis.
“The US will lose its status as the superpower of the world financial system. This world will become multipolar” with the emergence of stronger, better capitalized centrers in Asia and Europe, Mr Steinbrück told the German parliament. “The world will never be the same again.”
His were the most outspoken comments by a senior European government figure since Wall Street fell into chaos two weeks ago.
He later told journalists: “When we look back 10 years from now, we will see 2008 as a fundamental rupture. I am not saying the dollar will lose its reserve currency status, but it will become relative.”
The minister, who has spearheaded German efforts to rein in financial markets in the past two years, attacked the US government for opposing stricter regulations even after the subprime crisis had broken out last summer.
The US notion that markets should remain as free as possible from regulatory shackles “was as simplistic as it was dangerous”, he said.
But Mr Steinbrück had warm words for the US’s crisis management in the past fortnight, including the government’s planned $700bn rescue package for the financial sector. Washington, he said, had earned credit for acting not just in the US interest but also in the interest of other nations.
Yet he repeated Germany’s refusal to mount a similar rescue operation using taxpayers’ money to acquire toxic assets. “This crisis originated in the US and is mainly hitting the US,” he said. In Europe and Germany, such a package would be “neither sensible nor necessary”.
WaMu – One Of Nations Largest Banks Collapses
As the debate over a $700 billion bank bailout rages on in Washington, one of the nation’s largest banks – Washington Mutual Inc. – has collapsed under the weight of its enormous bad bets on the mortgage market.
The Federal Deposit Insurance Corp. seized WaMu on Thursday, and then sold the thrift’s banking assets to JPMorgan Chase & Co. for $1.9 billion.
Earlier, urgent efforts to lash together a $700 billion rescue plan for the national economy appeared to be stalling Thursday night, hours after key lawmakers had declared they had reached a deal.
Weary congressional negotiators hurried back to work, joined by Treasury Secretary Henry Paulson in an effort to revive or rework the proposal that President George W. Bush said must be quickly approved by Congress to stave off economic disaster. Congressional leaders said Federal Reserve Chairman Ben Bernanke might come to Capitol Hill, too, if enough progress was made.
The meetings were to continue into the night.
After six days of intensive talks on the unprecedented package proposed by the Bush administration, with Wall Street tottering and presidential politics intruding six weeks before the election, there was more confusion than clarity.
Hong Kong Bank Runs
Hong Kong injected nearly $500 million £269 miillion into the financial system today to shore up liquidity a day after the Bank of East Asia was hit with what appears to be the region’s first big bank run since the global financial crisis erupted last year.
The embattled bank got a boost when Li Ka-shing, the territory’s richest man and a billionaire tycoon, bought the company’s shares after they plunged yesterday. “He did buy Bank of East Asia shares. It’s a personal investment.” a Li spokeswoman said.
Thousands of customers converged on Bank of East Asia offices across Hong Kong yesterday to demand their deposits amid unconfirmed rumours about the bank’s stability. About 200 people lined up at two branches alone. The fear then spread to Singapore, where the crowds had thinned today, although a few dozen depositors were seen at a few branches in the morning.
Bank of East Asia and the Hong Kong authorities were quick to shoot down the rumours, spread by mobile phone text messages in recent days, as “malicious and baseless.”
President Bush Speech On America’s Economy
THE PRESIDENT: Good evening. This is an extraordinary period for America’s economy. Over the past few weeks, many Americans have felt anxiety about their finances and their future. I understand their worry and their frustration. We’ve seen triple-digit swings in the stock market. Major financial institutions have teetered on the edge of collapse, and some have failed. As uncertainty has grown, many banks have restricted lending. Credit markets have frozen. And families and businesses have found it harder to borrow money. Read more
6.3 Earthquake Off Mexico Coast
A magnitude 6.3 earthquake struck near the western coast of Mexico at 7:33 p.m. local time, the U.S. Geological Survey said on its Web site. A tsunami warning was issued for coastal areas within 100 kilometers 60 miles.
The earthquake hit 255 kilometers southwest of the city of Colima at a depth of 42 kilometers, the USGS said. The epicenter was 690 kilometers west-southwest of Mexico City.
“Earthquakes of this size sometimes generate local tsunamis that can be destructive along coasts located within 100 kilometers,” the Pacific Tsunami Warning Center said in a bulletin. “No destructive widespread tsunami threat exists.”
The center put the magnitude of the quake at 6.5. There were no reports of casualties or damage.
Mexico lies in a zone where the North American, Cocos and Caribbean plates meet. These tectonic plates constantly shift, sometimes causing earthquakes which occasionally produce tsunamis. Earthquakes of magnitude 5 or more can cause considerable damage depending on their depth.
A magnitude 8 quake in September 1985 killed at least 9,500 people in Mexico and destroyed more than 4,000 buildings in Mexico City, according to the USGS Web site. Some reports put the death toll at 35,000, the USGS said.
Japan Prepares For Flu Pandemics
The National Police Agency released an action plan this week for dealing with outbreaks of new types of influenza to which people have little immunity.
Health experts fear that new types of influenza, such as bird flu, could soon hit large portions of the world population. The action plan lays out specific measures for the NPA and prefectural police to take if an outbreak becomes a pandemic.
As soon as an outbreak is suspected, a special task force will be set up at the NPA and the prime minister’s office, where NPA officials will be dispatched.
Police will then be equipped with masks and other protective gear while working with medical institutions so vaccines can be given to health care officials and others most likely to be exposed to a new flu outbreak.
US On Brink of Financial Meltdown?
Last Thursday, the top economic policymakers in the United States told congressional leaders that the financial system was only days away from a catastrophic failure — and that the only hope was an immediate, massive government bailout. Congress agreed in principle, buoying financial markets. But five days later, the specifics of the rescue legislation remain undecided. Two of yesterday’s market events — a 372-point drop in the Dow Jones industrial average and a $16-per-barrel jump in the price of oil — show just how rapidly the clock is ticking.
From The NY Times
It was a room full of people who rarely hold their tongues. But as the Fed chairman, Ben S. Bernanke, laid out the potentially devastating ramifications of the financial crisis before congressional leaders on Thursday night, there was a stunned silence at first.
Mr. Bernanke and Treasury Secretary Henry M. Paulson Jr. had made an urgent and unusual evening visit to Capitol Hill, and they were gathered around a conference table in the offices of House Speaker Nancy Pelosi.
“When you listened to him describe it you gulped,” said Senator Charles E. Schumer, Democrat of New York.
As Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the Banking, Housing and Urban Affairs Committee, put it Friday morning on the ABC program “Good Morning America,” the congressional leaders were told “that we’re literally maybe days away from a complete meltdown of our financial system, with all the implications here at home and globally.”
Mr. Schumer added, “History was sort of hanging over it, like this was a moment.”
When Mr. Schumer described the meeting as “somber,” Mr. Dodd cut in. “Somber doesn’t begin to justify the words,” he said. “We have never heard language like this.”
“What you heard last evening,” he added, “is one of those rare moments, certainly rare in my experience here, is Democrats and Republicans deciding we need to work together quickly.”
Although Mr. Schumer, Mr. Dodd and other participants declined to repeat precisely what they were told by Mr. Bernanke and Mr. Paulson, they said the two men described the financial system as effectively bound in a knot that was being pulled tighter and tighter by the day.
Russia Flexes It’s Muscles In US Backyard
Russia flexed its muscles in America’s backyard yesterday as it sent one of its largest warships to join military exercises in the Caribbean. The nuclear-powered flagship Peter the Great set off for Venezuela with the submarine destroyer Admiral Chabanenko and two support vessels in the first Russian naval mission in Latin America since the end of the Cold War.
“The St Andrew flag, the flag of the Russian Navy, is confidently returning to the world oceans,” Igor Dygalo, a spokesman for the Russian Navy, said. He declined to comment on Russian newspaper reports that nuclear submarines were also part of the expedition.
The voyage to join the Venezuelan Navy for manoeuvres came only days after Russian strategic nuclear bombers made their first visit to the country. Hugo Chávez, the President, said then that the arrival of the strike force was a warning to the US. The vehemently antiAmerican Venezuelan leader is due to visit Dmitri Medvedev, the Russian President, in Moscow this week as part of a tour that includes visits to Cuba and China.
Peter the Great is armed with 20 nuclear cruise missiles and up to 500 surface-to-air missiles, making it one of the most formidable warships in the world. The Kremlin has courted Venezuela and Cuba as tensions with the West soared over the proposed US missile shield in Eastern Europe and the Russian invasion of Georgia last month. Vladimir Putin, the Prime Minister, said recently that Russia should “restore its position in Cuba” – the nation where deployment of Soviet nuclear missiles in 1962 brought Russia and the United States to the brink of nuclear war.
