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Global Economy
<!--emo&Sad--><img src='style_emoticons/<#EMO_DIR#>/sad.gif' border='0' style='vertical-align:middle' alt='sad.gif' /><!--endemo--> NRI kills self, family over financial woes
Los Angeles: Shocked by finding himself a pauper from a Millionaire overnight by the plunging US stock market, an unemployed Indian origin businessman took the extreme step of shooting and killing his wife, three children and mother-in-law, before taking his own life here.
Karthik Rajaram (45), who once made more than USD 1.2 million in a London-based venture fund, was found dead in his Porter Ranch home here along with his wife Subasri (39), mother-in-law (70) and three sons Krishna (19), Ganesha (12) and Arjuna (7).

<b>Is It 1929 Again?</b>
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->There are parallels between then and now, but there are also big differences. Now as then, Americans borrowed heavily before the crisis -- in the 1920s for cars, radios and appliances; in the past decade, for homes or against inflated home values. Now as then, the crisis caught people by surprise and is global in scope  But unlike then, the federal government is a huge part of the economy (20 percent vs. 3 percent in 1929), and its spending -- for Social Security, defense, roads -- provides greater stabilization. Unlike then, government officials have moved quickly, if clumsily, to contain the crisis.<!--QuoteEnd--><!--QuoteEEnd-->
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>From 1929 to 1933, two-fifths of the nation's banks failed; depositor runs were endemic; the money supply (basically, cash plus bank deposits) declined by more than a third.</b> People lost bank accounts; credit for companies and consumers shriveled. Economic retrenchment fed on itself and overwhelmed the normal mechanisms of recovery  These channels included: surplus inventories being sold, so companies could reorder; strong firms expanding as weak competitors disappeared; high debts being repaid so borrowers could resume normal spending.<!--QuoteEnd--><!--QuoteEEnd-->
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->The economy will get worse. The housing glut endures. Cautious consumers have curbed spending. Banks and other financial institutions will suffer more losses. But these are all normal symptoms of recession. Our real vulnerability is a highly complex and global financial system that might resist rescue and revival.  The Great Depression resulted from the mix of a weak economy and perverse government policies. If we can avoid a comparable blunder, the great drama of these recent weeks may prove blessedly misleading.<!--QuoteEnd--><!--QuoteEEnd-->
<b>US calls for unity as markets dive</b>
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>Federal Reserve Bank of Dallas President Richard Fisher, considered an inflation hawk, said capital markets were in "semi-panic" and said he was more worried about markets breaking down than upward pressure on prices.

"What I'm more worried about is how dysfunctional the system has become and what we, as the lender of last resort, need to do to encourage the liquidity to flow," he said.</b><!--QuoteEnd--><!--QuoteEEnd-->
<b>Retirement accounts have lost $2 trillion</b>
By JULIE HIRSCHFELD DAVIS, Associated Press Writer 59 minutes ago
<b>Financial Tsunami: The End of the World as we Knew it
By F. William Engdahl

<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->The US Congress’ passage of a slightly modified form of the Bush Administration’s financial bailout plan on the week of October 3 has opened up the spectre for the first time of a 1931-style domino wave of worldwide bank failures. That process is already underway across the US banking sector with the failure, nationalization or forced liquidation in the past weeks of Fannie Mae and Freddie Mac, of the giant Washington Mutual mortgage lender, and the rapid collapse of the nation’s fourth largest deposit bank, Wachovia. That was on top of a wave of smaller bank failures that began with IndyMac in the spring. 

<b>The new act has been described as the financial equivalent of the US Patriot Act, </b>the law that gave the Bush Administration powers in violation of Constitutional safeguards under the climate of the September 11, 2001 attacks.

The treasury will have almost unlimited discretionary powers to price and buy distressed mortgage securities, or any other type of securities - including even car loans and student loans - which it considers important. Treasury can buy from any institution of its choice, through a process of its own design, which is as yet unknown and at a pace which the treasury deems appropriate. <b>Moreover, the Paulson Treasury will ‘outsource’ most of the management of the $700 billion purchases to the very financial institutions responsible for creating the crisis. </b> The treasury is reportedly planning to use up to 10 private asset managers to manage the assets purchased under the plan. Big players like PIMCO, Black Rock and Legg Mason are reported likely to be chosen for what will be some of the world's biggest asset management accounts. Heavy private sector involvement from the same community of investment bankers who are perceived to be the villains in this crisis, will make political management of the plan all the more difficult.

Former US Treasury Secretary Paul O’Neill in an interview has called the Paulson plan ‘crazy.’ O’Neill points out as this author and many other economists have, that the new plan does nothing to assure an end to the banking crisis. It merely rewards many of Paulson’s friends on Wall Street at US taxpayer expense. Were the moral backbone of the Democratic Congress at all strong, <b>there would be calls for indictment of Paulson and others in the Bush Administration for criminal misconduct in the most brazen financial swindle in the scandal-ridden American finance history.  </b>

As the details of the present crisis reveal, <b>there are huge ideological fault lines making for chaos and a potential meltdown of the Laissez Faire financial system. </b>That present system, which was built on the back of Wall Street financial and banking deregulation since 1987 when <b>Alan Greenspan, a devout follower and close friend of radical individualist Ayn Rand, </b>became Wall Street’s man at the Federal Reserve for almost 19 years, is over now with the failure of the Henry Paulson $700 billion bailout scheme. Governments worldwide now face no alternative but to begin the painful process of putting the financial genie back in the bottle and re-regulating an out-of-control financial system. <b>The failure of the UK Government and the US Government to address that fundamental issue is behind the present crisis of confidence. </b>

A brief look at history

The Great Depression in Germany in 1931 began with a seemingly minor event—the collapse of a bank in Vienna, Creditanstalt, that May. For readers interested in more on the remarkable parallels between that crisis and that of today, I recommend the treatment in my earlier volume, Stoljece Rata.

That Vienna bank collapse in turn was triggered by a political decision in Paris to sabotage an emerging German-Austrian economic cooperation agreement by pulling down the weakest link of the post-Versailles system, the Vienna Creditanstalt. In the process, Paris triggered a series of tragic events that led to the failure of the German banking system over a period of several weeks. The post-1919 Versailles System, much like the post-1999 US Securitization System, was built on a house of cards with no foundation. When one card was removed, the entire international financial edifice crumbled.

Then, in 1931, there was an inept Brüning government in Germany, which believed severe austerity was the only solution, merely feeding unemployment lines to pay the Young Plan German reparations to the new Bank for International Settlements in Basle.

Then, in 1931 George Harrison, a Germano-phobe, was the inexperienced Governor of the powerful New York Federal Reserve. Harrison was a member of the anglophile Skull & Bones, the elite Yale University secret society which also included George H.W. Bush and George W. Bush as initiates. Harrison, who went on to coordinate the secret Manhattan Project on the development of the Atomic bomb under fellow Skull & Bones member, War Secretary Henry Stimson, believed the crisis had started not from abroad but with German bankers trying to make a profit at the expense of others.

Within weeks of rumor and jitters, the New York Bankers Trust, ironically today a part of Deutsche Bank, announced it would be forced to cut the credit line to Deutsche Bank and by July 1931 began to pull its deposits from all big Berlin banks. Harrison insisted the Reichsbank dramatically raise interest rates to stabilize things, only turning bad into worse as a credit crisis across the German economy ensued. 

The Bank of England Governor, Montagu Norman, while somewhat more supportive of Luther argued that his friend Hjalmar Schacht was better suited to manage the crisis. On July 13, 1931, a major German bank, Darmstädter-und Nationalbank (Danat) failed. That triggered a general a depositors’ run on all German banks. The Brüning government merged the Danat with a weakly capitalized Dresdner Bank, and made large state guarantees in an effort to calm matters. It didn’t. 

New York Fed governor, Harrison, who was personally convinced it was a ‘German’ problem, barked orders to Reichsbank chief Hans Luther on how to manage the crisis according to archival accounts. A foreign drain on Reichsbank gold reserves ensued. 

The rest is history, the tragic history of the greatest most destructive war of the 20th Century, with all the suffering that ensued. At that time in history, the American banking elite saw itself, despite a stock market crash and Great Depression in America, as standing at the dawn of a new American Century.

The decline of the American Century

Today, in 2008, some 77 years later, <b>a German Finance Minister stands before the Bundestag announcing the end of that American Century.</b> Today the German government encourages a fusion of Dresdner with Commerzbank. Today Deutsche Bank, which some years ago acquired Bankers Trust in New York in a merger wave, appears to be in a stronger position than its American counterparts as <b>Wall Street investment banks, some more than 150 years old as the venerable Lehman Bros., simply vanish in a matter of days. </b>The American financial Superpower crumbles before our eyes.

In March 2008 there were five giant Wall Street investment banks, banks which underwrote Mortgage-Backed Securities (MBS), corporate bonds, corporate stock issues. They were not deposit banks like Citibank or Bank of America; they were known as <b>investment banks—Morgan Stanley, Merrill Lynch, Goldman Sachs, Lehman Brothers, Bear Stearns.  </b>

The business of taking deposits and lending by banks had been split during the Great Depression from the business of underwriting and selling stocks and bonds—investment banking—by an act of Congress, <b>the Glass-Steagall Act of 1933.</b> The law was passed amid the collapse of the banking system in the United States following the bursting of the Wall Street stock market bubble in October 1929.

That Glass-Steagall act was a prudent attempt by Congress to end the uncontrolled speculative excesses of the Roaring Twenties by New York finance. It established the Federal Deposit Insurance Corporation to guarantee personal bank deposits to a fixed sum that restored consumer confidence and ended the panic runs on bank deposits.

<b>In November 1999, after millions spent lobbying Congress, the New York banks and Wall Street investment banks and insurance companies won a staggering victory. The US Congress voted to repeal that 1933 Glass-Steagall Act. </b>President Bill Clinton proudly signed the repeal act with Sandford Weill, the chairman of Citigroup.

The man whose name is on that repeal bill was Texas Senator Phil Gramm, a devout advocate of ideological free market finance, finance free from any Government fetters. The major US banks had been seeking the repeal of Glass-Steagall since the 1980s. In 1987 the Congressional Research Service prepared a report which argued the case for preserving Glass-Steagall. The new Federal Reserve chairman, Alan Greenspan, just fresh from J.P. Morgan bank on Wall Street, in one of his first speeches to Congress in 1987 argued for repeal of Glass-Steagall.

The repeal allowed commercial banks such as Citigroup, then the largest US bank, to underwrite and trade new financial instruments such as Mortgage-Backed Securities (MBS) and Collateralized Debt Obligations (CDOs) and establish so-called structured investment vehicles, or SIVs, that bought those securities. <b>Repeal of Glass-Steagall after 1999, in short, enabled the Securitization revolution so openly praised by Greenspan as the “revolution in finance.” That revolution is today devouring its young.  </b>

That securitization process is at the heart of the present Financial Tsunami that is destroying the American credit structure. Citigroup played a major part in the repeal of Glass–Steagall in 1999. Citicorp had merged with Travelers Insurance company the year before, using a loophole in Glass-Steagall that allowed for temporary exemption. Alan Greenspan gave his personal blessing to the Citibank merger.

Phil Gramm, the original sponsor of the Glass-Steagall repeal bill that bears his name, went on to become the chief economic adviser to John McCain. Gramm also went on to become Vice Chairman of a sizeable Swiss bank, UBS Investment Bank, in the USA, a bank which has had no small share of troubles in the current Tsunami crisis.

Gramm as Senator in 2000 was one of five co-sponsors of the Commodity Futures Modernization Act of 2000. A provision of the bill was referred to as the ‘Enron loophole’ because the it was later applied to Enron to allow them unregulated speculation in energy futures, a key factor in the Enron scandal and collapse. The Commodity Futures Modernization Act, as I described in my earlier piece in May, Perhaps 60% of Today’s Oil Price is Pure Speculation, allowed investment bank Goldman Sachs (coincidentally the former bank of Treasury Secretary Paulson), to make a literal killing in manipulating oil futures prices up to $147 a barrel this summer.

Paulson’s impressive interest conflicts

The actions of Treasury Secretary Paulson since the first outbreak of the Financial Tsunami in August of 2007 have been directed with one apparent guiding aim—to save the obscene gains of his Wall Street and banking cronies. In the process he has taken steps which suggest more than a mild possible conflict of interest. Paulson, who had been chairman of Goldman Sachs from the time of the 1999 Glass-Steagall repeal to his appointment in 2006 as Treasury head, had been one of the most involved Wall Street players in the new securitization revolution of Greenspan.

Under Paulson, according to City of London financial sources familiar with it, Goldman Sachs drove the securitization revolution with an endless rollout of new products. As one London banker put it in an off-record remark to this author, “Paulson’s really the guilty one in this securitization mess but no one brings it up because of the extraordinary influence Goldmans seems to have, a bit like the Knights Templar order of old.’ Naming Goldman chairman Henry Paulson to head the Government agency now responsible for cleaning up the mess left by Wall Street greed and stupidity was tantamount to putting the wolf in charge of guarding the hen house as some see it.

Paulson showed where his interests lay. He is by law is the chairman of something called the President's Working Group on Financial Markets, the Government’s financial crisis management group that also includes Fed Chairman Bernanke, the Securities & Exchange Commission head, and the head of the Commodity Futures Exchange Commission (CFTC). That is the reason Paulson, the ex-Wall Street Goldman Sachs banker, is always the person announcing new emergency decisions since last August.

Two weeks ago, for example, Paulson announced the Government would make an unprecedented $85 billion nationalization rescue of an insurance group, AIG. True AIG is the world’s largest insurer and has a huge global involvement in financial markets.

AIG’s former Chairman, Hank Greenberg—a close friend of Henry <b>Kissinger</b>, a former Director of the New York Fed, former Vice Chairman of the elite New York Council on Foreign Relations and of David Rockefeller’s select Trilateral Commission, Trustee Emeritus of Rockefeller University—was for more than forty years Chairman of AIG. His AIG career ended in March 2005 when AIG's board forced Greenberg to resign from his post as Chairman and CEO under the shadow of criticism and legal action for cooking the books, in a prosecution brought by Eliot Spitzer, then Attorney General of New York State.[1]

In mid September, in between other dramatic failures including Lehman Bros., and the bailout of Fannie Mae and Freddie Mac, Paulson announced that the US Treasury, as agent for the United States Government, was to bailout the troubled AIG with a staggering $85 billion. The announcement came a day after Paulson announced the Government would let the 150-year old investment bank, Lehman Brothers, fail without Government aid. Why AIG and not Lehman?

What has since emerged are details of a meeting at the New York Federal Reserve bank chaired by Paulson, to discuss the risk of letting AIG fail. There was only one active Wall Street banker present at the meeting—Lloyd Blankfein, chairman of Paulson’s old firm, Goldman Sachs.

Blankfein later claimed he was present at the fateful meeting not to protect his firm’s interests but to ‘safeguard the entire financial system.’  His claim was put in doubt when it later emerged that Blankfein’s Goldman Sachs was AIG’s largest trading partner and stood to lose $20 billion in a bankruptcy of AIG. [2] Were Goldman Sachs to go down with AIG, Secretary Paulson would have reportedly lost $700 million in Goldman Sachs stock options he had, an interesting fact to put it mildly if true.

That is a tiny glimpse into the man who crafted the largest bailout in US or world financial history some days ago.

As respected economist, Nouriel Roubini pointed out, in almost every case of recent banking crises in which emergency action was needed to save the financial system, the most economical (to taxpayers) method was to have the Government, as in Sweden or Finland in the early 1990’s, nationalize the troubled banks, take over their management and assets, and inject public capital to recapitalize the banks to allow them to continue doing business, lending to normal clients. In the Swedish case, the Government held the assets, mostly real estate, for several years until the economy again improved at which point they could sell them onto the market and the banks could gradually buy the state ownership shares back into private hands. In the Swedish case the end cost to taxpayers was estimated to have been almost nil. The state never did as Paulson proposed, to buy the toxic waste of the banks, leaving them to get off free from their follies of securitization and speculation abuses.[3]

Paulson’s plan, the one essentially rejected on September 29 by the House of Representatives, would have done nothing to recapitalize the troubled banks. That recapitalization could cost an added hundreds of billions on top of the $700 billion toxic waste disposal.

Serious bankers I know who went through the Scandinavian crisis of the 1990’s are scratching their head trying to imagine how crass the Paulson TARP scheme is. That politically obvious bailout of Wall Street by the taxpayers, what some refer to as ‘Bankers’ Socialism—socialize the costs of failure onto the public, and privatize the profits to the bankers—is a major factor behind the defeat of the TARP compromise version. Under Paulson’s scheme, which seems likely to get very little alteration by Congress in coming days, the Treasury Secretary, initially Paulson, would have sole discretion, with minimal oversight, to use a $700 billion check book, courtesy of taxpayer generosity, to buy various Asset Backed Securities held not only by Federal Reserve regulated banks like JP Morgan Chase or Citicorp, or Goldman Sachs, but also by hedge funds, by insurance companies and whomever he decides needs a boost.

‘The Paulson plan is unworkable,’ noted Stephen Lewis, chief economist with the London-based Monument Securities. ‘No one has an idea how to set a price on these toxic securities held by the banks, and  in the present market a lot of them likely would be marked to zero.’ Lewis like many others who have examined the example of the temporary Swedish bank nationalization, called Securum, during their real estate collapse in the early 1990’s, stresses that ultimately only a similar solution would be able to resolve the crisis with a minimum of taxpayer cost. ‘The US authorities know very well the Swedish model, but it seems in the US nationalization is a dirty word.’     

But there is an added element. John McCain decided to boost his flagging Presidential campaign by trying to profile himself as a ‘political Maverick’ one who opposes the powerful Washington vested interests. He flew into Washington days before the Paulson Plan was to be approved by a panicked Congress and conspired with a handful of influential Republican Senate friends, including Banking Committee ranking member, Senator Shelby, to oppose the Paulson plan. What emerged, with McCain’s backing, was a political power play that may well have brought the United States financial system to its knees, and McCain’s Presidential hopes with it.

Power and greed are the only visible juice driving the decision-makers in Washington today. Acting in the long-range US national interest seems to have gotten lost in the scramble. As I wrote last November in my Financial Tsunami five part series on the background to today’s crisis, all this could be foreseen. It is what happens when elected Governments abandon their public trust or responsibility to a cabal of private financial interests. It will be interesting to see if anyone in Washington realizes that lesson.

Whatever next comes out of Washington, however, one thing is clear, as reflected in what German Finance Minister Peer Steinbrück told the Bundestag. <b>This is the end of the world as we knew it. The American financial Superpower is gone. The only important question will be what and how will the alternative be.        </b>

[1]          Associated Press,  Two charges against ...<!--QuoteEnd--><!--QuoteEEnd-->
Today AUD went down. current rate 1.4552
India Rupee is going down. Current rate is one USD = Rs 48.75
We may see Rs50 by end of this week.
Even Saudi Riyal is losing.

This week Fed may reduce interest rate.
Time to enter into market.
Some retail will go under or shutdown major stores before x-mas. Start from Linen n thing, BBB, Sears, JC Penny.
Pharmacy are already in consolidation mode.
<b>European Union tested by world economic crisis</b>
By WILLIAM J. KOLE, Associated Press Writer Tue Oct 7, 5:00 PM ET

Wall Street's woes extend far beyond Main Street and all the way to Law Street — the hulking headquarters of the European Union.

But the 27-nation bloc based at Rue de la Loi in Brussels, Belgium, hasn't taken sweeping joint action to deal with the global financial meltdown.

Instead, it's essentially left member countries to go it alone with a patchwork of measures aimed at keeping banks afloat.

Frustrated investors want to know why, and some have begun to question whether the EU — at its core, an economic union — will survive.

Although the EU pledged to act as one to calm roiled markets, it hasn't done much beyond a move Tuesday to boost guarantees on savings accounts.

That's led member states to take an a la carte approach, with major economic powerhouses like Britain and Germany putting together rescue packages, leaving smaller nations like Iceland to take the fall.

It's a risky business for the EU: In the short term, banks in poorer countries may flounder and fail. And by relinquishing key decisions to its members just as they're turning to EU headquarters for guidance at a time of crisis, the bloc could see decades of attempts to forge unity simply disintegrate.

Already, the 27 EU nations are divided over deploying troops to Afghanistan and deadlocked on a constitution designed to transform their union into a political super-state. Only 15 countries now use the common euro currency and the pride of the bloc — passport-free travel — doesn't apply to the entire EU.

Failure to pull together now on the financial crisis could push member nations even further apart, perhaps emboldening a resurgent Russia's influence on the fringes of the enlarged EU.

"Europe is in the midst of a once-in-a-lifetime crisis," 256 of the continent's leading economists said Tuesday in an open letter to EU leaders.

"Unless European leaders immediately unite to address this crisis before it spirals out of control, they may find themselves fighting over how best to salvage the aftermath," the economists said. They evoked "the dark years of the 1930s," adding: "It is not an exaggeration to say that it could happen again if governments fail to act."

And failure to act in unison has been an EU hallmark over the past few years.

A campaign to get all 27 nations to ratify a European constitution designed to streamline decision-making and give the expanding bloc more of a voice in world affairs remains stuck in limbo. Irish voters rejected it in June, three years after resounding "No!" votes in France and the Netherlands.

Many who backed a greater global role for the EU have consoled themselves by focusing on its roots as an economic union. Today's EU sprang from the six-nation European Economic Community established in 1957.

But the bloc designed to unify is riven by all kinds of divisions.

EU members have clashed repeatedly on deploying troops to Afghanistan or even whether to send 24 of their estimated 12,000 military helicopters to Darfur. They've bogged down completely on more thorny issues, such as how to respond to terrorism or recognize an independent Kosovo.

That makes the credit crisis now rattling markets and consumers worldwide even more of a test.

If the EU can't forge a common response to a collapse that transcends borders, involves multinational lenders and has pushed the euro currency down to its lowest level in a year, some wonder: What's the point of having an EU?

EU leaders have forfeited "a chance for Europe to find new leadership and credibility on the world stage," Italy's Il Sole 24 Ore financial daily said Tuesday. Instead, it warned, the leadership vacuum thrusts the entire bloc into "a suicidal position."

As calls mounted for a unified plan of action, EU finance ministers held an emergency meeting Tuesday in Luxembourg to debate raising guarantees for private savings across the bloc.

They agreed to raise the minimum bank deposit guarantee to $68,160 (euro50,000) — but that's just half of the $135,000 (euro100,000) backing that France wanted. Private deposits in most of the EU had been insured only up to $27,000 (euro20,000).

At the same time, some European governments have taken unilateral action: Germany pledged to guarantee all private bank savings and CDs in the country, and Iceland and Denmark followed suit. Ireland went even further by also guaranteeing Irish banks' debts.

It was easier for the EU to take common positions when it wasn't so big. Today's bloc is unwieldy, and it includes eight ex-communist countries that don't always take kindly to the notion of government intervention.

"The politicians in Europe are crazy. We didn't live under communism for 40 years just to return to it on EU soil," said Czech Finance Minister Miroslav Kalousek, who opposes 100 percent guarantees on bank deposits as unaffordable.

His Spanish counterpart, Pedro Solbes, disagreed. In a shared business climate, "decisions should be taken in agreement and not individually," he said.

El Pais, Spain's leading newspaper, agreed, warning in an editorial Tuesday: "There is a real risk that a great quantity of money will flow from those countries with fewer guarantees to those whose deposits are backed up absolutely."

Italian Premier Silvio Berlusconi has been pitching the idea of an "umbrella" fund for the common market. But German Chancellor Angela Merkel has ruled out a U.S.-style, EU-wide bailout of troubled banks.

Merkel's spokesman, Thomas Steg, told reporters Tuesday that although EU coordination is important, Germany believes "each must endeavor to solve the problems with the means and methods available to him."

"It's very painful that Europe is now divided," said Willem Vermeend, a former Dutch junior minister for finance.

"But I understand very well that countries say, 'We're going to take measures ourselves now.' If it doesn't come from Europe, you can't wait for Europe."

But, he added: "We need to save the economy. Period."
As expected.

<b>Fed, central banks cut rates to aid world economy</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->The Fed reduced its key rate from <b>2 percent to 1.5 percent</b>. In Europe, which also has been hard hit by the financial crisis, the <b>Bank of England cut its rate by half a point to 4.</b>5 percent and the <b>European Central Bank sliced its rate by half a point to 3.75 </b>percent<!--QuoteEnd--><!--QuoteEEnd-->

This will lead to major consolidation in retail. Now we have to watch how many go under before X-mas.
<b>Retailers report weak September sales</b>

Next is oil price future trading.
I want to start countdown on Oil price bubble to bust.

Today's headlines from Bloomberg
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Fed, ECB, BOE Cut Rates in Unprecedented Response to Combat Credit Freeze
•U.S. Stocks Retreat as Recession Concerns Outweigh Rate Cuts; Alcoa Drops
•<b>Pending Home Resales in U.S. Increase 7.4% as Foreclosures Reduce Prices </b>
•GE, American Express Reduce Commercial Paper Yields After Global Rate Cuts
•J<b>.C. Penney, Kohl's Cut Forecasts as September Sales Slump; Wal-Mart Gains </b>
•<b>Russia, Indonesia Halt Trading in Worst Emerging-Market Rout in 20 Years </b>
•Brazil Pension Funds See More Pain as Bovespa, Real Drop Most Since 1999
•McCain, Obama Clash Over Taxes, Regulation, Iraq, Skirt Personal Attacks
<b>•Putin May Use Financial Meltdown to Boost Influence as Iceland Seeks Loan </b> <!--QuoteEnd--><!--QuoteEEnd-->

<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->The Shanghai Stock Exchange is one of the worst performing exchange this year as investors grow nervous that the pre-Olympic boom may not be sustainable and inflation threatens to choke off the economy.  <b>Once over 6000, the Shanghai Composite Index is now a little above 2300</b>.  What went wrong here? <!--QuoteEnd--><!--QuoteEEnd-->
<b>China Cuts Rate to Protect Economy That's Now `Big Enchilada' </b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Japan is still a very big economic power, but China is the big enchilada on the field,'' said James Lilley, a former U.S. ambassador to Beijing. ``They really, in their own way, are joining the world financial community in dealing with a very severe crisis.''

China's move reflects how deeply the world's fourth-biggest economy has become integrated in the global financial system. While its gross domestic product expanded at 10.1 percent in the second quarter from a year earlier, its exports have been hit by a collapse in demand from the U.S. and Europe.
<!--QuoteEnd--><!--QuoteEEnd--><!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>China's reduction shows increased anxiety about the impact of the credit crisis on its own economy. The CSI 300 Index of stocks fell 3.8 percent yesterday for a 62 percent slump this year</b>.

Premier Wen Jiabao said on Sept. 27 that his nation wants to participate in a global solution.

``All countries should take proactive measures'' to deal with the financial crisis, and prevent it from spreading, he said in a televised speech to a conference.

``We share the same interest and goal in facing this crisis,'' the People's Bank of China said a week later, after the U.S. approved a $700 billion rescue plan for its financial system. ``All countries should take the responsibility to cooperate.''
<!--QuoteEnd--><!--QuoteEEnd--><!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>China's huge holdings of U.S. debt means it must bear a large proportion of the ``burden of sorting things out'' in the U.S., Yu said. ``China is very worried about the safety of its assets.''</b>
<b>Fed cuts rate: What does it mean to you?</b>

Fed cuts rate: What does it mean to you?
<b>Markets fall despite rate cut</b>

Süddeutsche Zeitung, Germany
<b>The Gorilla’s Downfall</b>
Today's Yahoo finance heading
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->U.S. eyes bank equity stakes as world looks to G7- Reuters
<b>Iceland suspends stock trading, creates new bank</b>- AP
Oil falls $2 as demand concerns outweigh OPEC- Reuters
<b>OPEC to hold emergency meeting on oil prices</b>- AP
GM shares fall to lowest level since 1950- Reuters
<b>Credit crisis hits Canada</b>- AP
Apparel chains report dismal September <!--QuoteEnd--><!--QuoteEEnd-->
<b>Crude Oil Falls More Than $2 as Demand Concern Outweighs OPEC </b>
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>OPEC is ``very likely'' to cut oil production at the Nov. 18 meeting in Vienna because prices have fallen ``dramatically,'' the group's president, Chakib Khelil, said today</b>.


<b>``Some OPEC members would like to cut production, but I think it would be suicide,'' said Phil Flynn, senior trader at Alaron Trading Corp. in Chicago. ``I don't think they will make a cut unless things improve dramatically on the economic front.'' </b>
<b>DOW - 8,639.32 (-618.78)</b>
S&P 500 935.72 -49.22 -5.00
<b>NASDAQ 1,645.62 -91.95 -5.44 </b>
Russell 2000 514.58 -31.99 -5.85
S&P/TSX Comp 9,670.07 -386.24 -3.84
Mexico Bolsa 20,544.72<b> -134.25</b> -0.65
Brazil Bovespa 37,503.85 <b>-1,089.69</b> -2.82
Headlines only -
<b>•Royal Bank of Scotland Loses Credibility After Goodwin's ABN Amro Purchase </b>

<b>•Russian Farmers Curb Siberian Push as $10 Billion Debt Threatens Harvests </b>
<b>•Bush Will Meet With G-7 Finance Chiefs to Tackle Credit Crisis, Aide Says </b>
•Iceland Seizes Kaupthing as Banking Industry Collapses Under Debt Weight
•Mutual Fund Withdrawals Jump to Record $72 Billion as Investors Seek Haven
<b>Mean Street: To Panic or Not to Panic?</b>
Watch India, Hongkong , Tokyo tomorrow.

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