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Ex-Nasdaq Chairman Arrested on $50B Fraud Charge

2008-12-13T01:12:00.005+07:00

Bernard L. Madoff, chairman of Madoff Investment Securities is seen on his Manhattan trading floor in this photo taken Dec. 30, 1999 in New York. The former Nasdaq stock market chairman was arrested on a securities fraud charge Thursday, Dec. 11, 2008, accused of running a phony investment business that lost at least $50 billion and amounted to nothing more than a "giant Ponzi scheme." (AP Photo/The New York Times, Ruby Washington).

NEW YORK – A Wall Street powerbroker for nearly 50 years who built an influential firm has confessed to a massive fraud scheme that will cost investors at least $50 billion, federal authorities say.

Bernard L. Madoff, 70, facing a single count of securities fraud, declined to speak with reporters after a federal magistrate judge in U.S. District Court in Manhattan ordered him released Thursday night on $10 million bail.

Andrew M. Calamari, associate director of enforcement in the Securities and Exchange Commission's New York office, said the SEC had filed a civil securities fraud charge as well and was alleging "a stunning fraud that appears to be of epic proportions."

The SEC said it was seeking emergency relief for investors, including an asset freeze and the appointment of a receiver for the firm. A hearing was scheduled for Friday.

If the allegations contained in a criminal complaint are true, it may be the largest fraud ever blamed on a single individual. Nearly all of the allegations stem from an FBI agent's recounting of what Madoff told two FBI agents and three senior employees of his firm, Bernard L. Madoff Investment Securities LLC.

It would be a steep fall for Madoff, a former Nasdaq stock market chairman who founded his business in 1960 with $5,000 he earned in part working as a lifeguard on Long Island beaches.

His firm was a market maker, handling trades in some of the largest securities on various stock exchanges, matching buyers and sellers. Investigators say Madoff's crime originated in a separate and secretive investment-advising business that served between 11 and 25 clients and had a total of about $17.1 billion in assets under management.

The criminal complaint signed by FBI Agent Theodore Cacioppi said Madoff told at least three senior employees at his Manhattan apartment Wednesday that the investment adviser business was a fraud and had been insolvent for years, losing at least $50 billion.

Madoff told the employees he was "finished," that he had "absolutely nothing," that "it's all just one big lie" and it was "basically, a giant Ponzi scheme," according to the complaint filed in court.

The employees understood Madoff's admission to mean that "he had for years been paying returns to certain investors out of the principal received from other, different, investors," said the complaint, which did not identify the investors impacted by the scheme.

Cacioppi said one of the employees told him that Madoff was "cryptic" about the firm's investment advisory business and kept its financial statements locked up. The FBI agent said another employee told him that Madoff last week said clients had asked for about $7 billion in redemptions and he was struggling to meet those obligations but thought he could do so.

Cacioppi said two senior Madoff employees told him that Madoff said during the Wednesday meeting that he planned to surrender to authorities in a week but first wanted to distribute $200 million to $300 million he had left to certain selected employees, family and friends.

Cacioppi said he and another FBI agent arrived Thursday at Madoff's apartment, where Madoff invited them in and acknowledged knowing why they were there.

"Madoff stated, in substance, that he had personally traded and lost money for institutional clients, and that it was all his fault," Cacioppi said.

The agent wrote that Madoff said he had "paid investors with money that wasn't there" and that he was broke and insolvent and had decided that "it could not go on" and that he expected to go to jail.

Defense lawyer Dan Horwitz called Madoff "a person of integrity" and said he intends to fight the charge.

If convicted, Madoff could face up to 20 years in prison and a maximum fine of $5 million.

Bernard L. Madoff Investment Securities LLC ranks among the top 1 percent of U.S. securities firms, according to the company's Web site.

In 2001, Barron's reported that Madoff's firm was one of the three top market makers in Nasdaq stocks and the third-largest firm matching buyers and sellers of securities on the New York Stock Exchange.

Shortly after leaving law school, Madoff founded his firm in 1960. It was one of five broker-dealers most closely involved in developing the Nasdaq Stock Market, where he served as a member of the board of governors in the 1980s and as chairman of the board of directors.

In the 1990s, Madoff was viewed as a maverick. He angered leaders of the New York and American stock exchanges by taking away some of their business by paying brokerage firms a penny a share to route orders through his system.

Sources :

Ex-Nasdaq chairman arrested on $50B fraud charge | By LARRY NEUMEISTER, Associated Press Writer.

Sterling Fall:How the Weak Pound is Affecting Travellers

2008-12-13T00:30:00.005+07:00

With the pound falling to a record low against many of the world's major currencies, exchange rates will have a big influence on where we travel in 2009.

Destinations where currency has slipped at the same rate as the pound - such as Cape Town in South Africa - may see an increase in British visitors Photo: REUTERS

Few holidaymakers used to take much notice of fluctuating exchange rates. Historically, the pound has always hovered around $1.6 and about 1.4 euros. Thailand, South America, Africa and the Far East have traditionally been seen as "good value". But with the pound in freefall against the world's major currencies – it fell to an all-time low against the euro today – all that has changed.

Some analysts predict that next year we could see parity between the pound and the euro and even the dollar. More than ever before, exchange rates are influencing holiday decisions. A survey of Telegraph readers last month found that nearly half admitted that exchange rates influence their choice of destinations.

Destinations
With NatWest Bank now offering travellers a rate of 1.08 euros for every pound, compared with 1.32 euros a year ago, popular eurozone destinations such as Spain and Greece have seen a sharp decline in British visitors. By comparison, Turkey where the pound has only fallen by five per cent, enjoyed its best ever summer. Iceland has also seen a surge in British visitors, with prices down by a third due to the collapse of the krona.

The slide of the pound against the dollar – from around $2 at this time last year to just $1.39 today – affects stays in the US as well as several Caribbean and African countries whose currencies are pegged to the dollar.

Bookings for ski trips to the US have already fallen this year as travellers head either to the better-value Canadian Rockies, where the pound has only recently fallen against the Canadian dollar (from $1.93 to $1.72), or to the European Alps.

For those looking for winter sun, popular destinations such as Barbados, Dubai and Egypt, will appear up to a third more expensive this year. Instead it is long-haul destinations such as South Africa, where prices are five per cent cheaper, New Zealand where the pound has stayed level and Australia, where it is dropped by less than 10 per cent, that offer the best value.

The high cost of foreign travel is expected to be a boon for domestic tourism next summer. Hoseasons, one of the largest UK operators has already reported a 20 per cent rise in bookings for 2009.

Package holidays
The rising price of the euro and the dollar has prompted many Britons to return to traditional all-inclusive package holidays. These are easier to budget for and they offer financial protection (which has grown in importance following the collapse of dozens of airlines).

However, package prices will increase next year. Tour operators are currently securing rooms for next at higher rates than previously for many of the popular destinations and will be forced to pass these extra cost on. The collapse of the tour operator XL this summer and the mergers of Britain's four leading operators (Thomson with First Choice and Thomas Cook with MyTravel) has reduced competition, enabling companies to keep their prices up by reducing the number of summer holidays they will offer in 2009.

Flights
Despite the price of aviation fuel falling by more than third since last year, fuel surcharges still remain higher than this time last year. BA's long-haul fuel surcharge is £192 for a return flight compared with £116 return in December 2007.

This week the head of International Air Transport Association (IATA) eported that air fares could fall by up to five per cent next year, but mainly on competitive routes to the US, Australia and Dubai. In recent weeks, airlines have been cutting services, which has reduced the competition on many short-haul routes.

Hotels
According to the annual Hotel Price Index researched by the accommodation website Hotels.com this week, a combination of slight price rises in Europe (two per cent) and the stronger euro has meant that, for British travellers, average room rates in some European destinations have risen by as much as 30 per cent. Geneva showed the biggest increase, with rooms rates up by third between July and September compared with the same period last year.

Over the same period, prices across North America fell by five per cent and four per cent in the Caribbean, although in real terms they would have increased due to the strengthening of the dollar against the pound. In Latin America, prices were down by one per cent and they remained static in Asia. British hotels have cut their rates for the first time in four years.

Cruises
It is overcapacity, rather than poor exchange rates, that is the main problem for cruise lines. With 40 more ships boasting more than 50,000 extra berths set to be launched by 2012, cruise lines will continue to struggle to fill their ships. This week, the Telegraph’s cruising correspondent, Jane Archer, was on a Windstar cruise which was less than a quarter full and staff outnumbered passengers by nearly three to one.

As a result there are some great deals. Several cruise lines are selling off cruises this winter for as little as a quarter of the brochure price, while others have cut their fuel surcharges in line with the drop in oil prices. Despite these savings, passengers on Mediterranean, US and Caribbean cruises will continue to feel the pinch when they step off the boat.

Holiday spending
A survey today by the Post Office showed the extent of price rises in Eurozone countries – with the price of holiday essentials rising, on average, by 23 per cent compared with last year.

The average price of a cup of coffee in France has risen from £1.55 to £1.86, while a three-course evening meal in Greece (including wine) has risen from £34 to nearly £42. Similar rises have been registered in Dubai, the US and the Caribbean.

Sources :

How the weak pound is affecting travellers | By Charles Starmer-Smith Last Updated: 4:38PM GMT 10 Dec 2008.
Value of pound falls to 28-year low | By Robert Winnett, Deputy Political Editor Last Updated: 9:03AM GMT 11 Dec 2008.

US Bailout Hits $8.5 Trillion

2008-12-06T20:29:00.010+07:00

Table courtesy of Global Research

Key dates in the federal government's campaign to alleviate the economic crisis:

March 11: The Federal Reserve announces a rescue package to provide up to $200 billion in loans to banks and investment houses and let them put up risky mortgage-backed securities as collateral.
March 16: The Fed provides a $29 billion loan to JPMorgan Chase & Co. as part of its purchase of investment bank Bear Stearns.
July 30: President Bush signs a housing bill including $300 billion in new loan authority for the government to back cheaper mortgages for troubled homeowners.
Sept. 7: The Treasury takes over mortgage giants Fannie Mae and Freddie Mac, putting them into a conservatorship and pledging up to $200 billion to back their assets.
Sept. 16: The Fed injects $85 billion into the failing American International Group, one of the world's largest insurance companies.
Sept. 16: The Fed pumps $70 billion more into the nation's financial system to help ease credit stresses.
Sept. 19: The Treasury temporarily guarantees money market funds against losses up to $50 billion.
Oct. 3: President Bush signs the $700 billion economic bailout package. Treasury Secretary Henry Paulson says the money will be used to buy distressed mortgage-related securities from banks.
Oct. 6: The Fed increases a short-term loan program, saying it is boosting short-term lending to banks to $150 billion.
Oct. 7: The Fed says it will start buying unsecured short-term debt from companies, and says that up to $1.3 trillion of the debt may qualify for the program.
Oct. 8: The Fed agrees to lend AIG $37.8 billion more, bringing total to about $123 billion.
Oct. 14: The Treasury says it will use $250 billion of the $700 billion bailout to inject capital into the banks, with $125 billion provided to nine of the largest.
Oct. 14: The FDIC says it will temporarily guarantee up to a total of $1.4 trillion in loans between banks.
Oct. 21: The Fed says it will provide up to $540 billion in financing to provide liquidity for money market mutual funds.
Nov. 10: The Treasury and Fed replace the two loans provided to AIG with a $150 billion aid package that includes an infusion of $40 billion from the government's bailout fund.
Nov. 12: Paulson says the government will not buy distressed mortgage-related assets, but instead will concentrate on injecting capital into banks.
Nov. 17: Treasury says it has provided $33.6 billion in capital to another 21 banks. So far, the government has invested $158.6 billion in 30 banks.
Sunday: The Treasury says it will invest $20 billion in Citigroup Inc., on top of $25 billion provided Oct. 14. The Treasury, Fed and FDIC also pledge to backstop large losses Citigroup might absorb on $306 billion in real estate-related assets.
Tuesday: The Fed says it will purchase up to $600 billion more in mortgage-related assets and will lend up to $200 billion to the holders of securities backed by various types of consumer loans.

Source : Associated Press

Sources :

by Kathleen Pender: Government bailout hits $8.5 trillion
Associated Press
Conquer The Wallstreet: Breakdown of US $8.5 trillion of the government rescue packages

Crisis Balance Sheet US $4.28 trillion

2008-11-26T20:42:00.006+07:00

Try $4.28 trillion dollars. That's $4,284,500,000,000 and more than what was spent on WW II, if adjusted for inflation, based on computations from a variety of estimates and sources (*).

Not only is it a astronomical amount of money, its' a complicated cocktail of budgeted dollars, actual spending, guarantees, loans, swaps and other market mechanisms by the Federal Reserve, the Treasury and other offices of government taken over roughly the last year, based on government data and news releases. Strictly speaking, not every cent is a direct result of what's called the financial crisis, but it is arguably related to it.

Some 68-percent of the sum falls under the Federal Reserve's umbrella, while another 16 percent is the under the Troubled Asset Relief Program, TARP, as defined under the Emergency Economic Stabilization Act, signed into law in early October.

(*) References includ US National Archive, US Dept of Defense, US Bureau of Reclamation, Library of Congress, NASA, Panama Canal Authority, FDIC, Brittanica, WSJ, Time, CNN.com, and a number of other websites.

Sources :

CNBC : Financial Crisis Tab Already In The Trillions | 18 Nov 2008 | 04:38 PM ET.

Pirates Halve Ransom Demand for Super-Tanker

2008-11-24T22:19:00.002+07:00

Somali pirates, who have been holding Saudi super oil-tanker for nine days, have reportedly halved their ransom demand of $25 million.

While Islamist spokesman Abdirahim Isse Adow said Monday "the middlemen proposed a $15 million ransom figure for the Saudi ship," an Arabic newspaper claimed the hijackers reduced the ransom demand to $12 million.

The Asharq Al-Awsat newspaper, quoting unidentified sources, said that the ransom demand could be cut further, and expected the impasse to be resolved in the next four days.

Adow, whose men wanted to confront the pirates and release the Sirius Star because it was a "Muslim" ship, added that the pirates have taken the ship further out to 100 kilometers off the coast of central Somalia fearing a chase by the Islamist militia.

The Liberian-flagged oil tanker, owned by Saudi Aramco, was seized on November 15 in the Gulf of Aden, southeast of the Keynyan port of Mombasa.

The mammoth tanker is carrying a cargo of two million barrels of oil, with 25 crewmembers on board.

The Saudi owners were negotiating with the pirates over a $25 million ransom, despite pleas from the British and Saudi governments to resist paying the money.

Sources :
RTTNews : Pirates halve ransom demand for super-tanker | 11/24/2008 8:35 AM ET.

US Agrees Bail-Out for Citigroup "Too Big to Fail"

2008-11-24T19:37:00.005+07:00

The US government agree to the rescue of Citigroup, entering an agreement to guarantee up to $306bn in problematic assets and inject $20bn cash in capital, adding to the $25bn the company received last month under the Troubled Asset Relief Program (TARP) to restore confidence in a bank that defines the term "Too Big to Fail".

Under the terms of the arrangement, the US Treasury will receive dividends at a rate of 8 per cent annually. On top of that amount, Citi is receiving an additional $7bn in return for preferred shares issued to both the Treasury and the Federal Deposit Insurance Corporation for their roles in guaranteeing the risky assets.

In addition to the $27bn capital infusion, the reconstruction of Citi’s balance sheet in effect frees up an additional $13bn, so the total capital benefit to Citi will be $40bn.

Following the agreement Citi promised to cut its dividend to 1 cent a share and to abide by restrictions on certain types of executive compensation.

Sources :

FT.com : US agrees bail-out for Citigroup | Last updated: November 24 2008 10:53.
Bloomberg : Citigroup Gets Guarantees on $306 Billion of Assets (Update3) | November 24, 2008 05:57 EST.

Malaysia Central Bank Cut Rate 25 bps To 3.25%

2008-11-24T19:15:00.003+07:00

Monday, the Malaysian central bank lowered its key interest rate to 3.25% from 3.5%. Economists had forecast the central bank to leave the base rate unchanged.

The Bank Negara Malaysia said in a statement, "The ceiling and floor rates of the corridor for the OPR are correspondingly reduced to 3.50 percent and 3.00 percent respectively".

The central bank also cut the Statutory Reserve Requirement to 3.5% from 4%, which will take effect on December 1.

Inflation is expected to moderate significantly, especially in the second half of 2009, the central bank said.

"Going forward, the global economic and the international financial conditions are expected to continue to remain volatile and uncertain. Bank Negara Malaysia will monitor closely the evolving developments and will undertake the appropriate policy response to avoid a severe economic downturn", the central bank said.

Sources :

RTTNews : Malaysia Central Bank Lowers Key Policy Rate By 25 bps To 3.25% | 11/24/2008 7:07 AM ET.

Citigroup Profiles

2008-11-22T13:29:00.006+07:00

Vikram Pandit, chief executive, and Sir Win Bischoff, chairman.
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Sir Win Bischoff

Sir Win Bischoff became one of a handful of Europeans to reach the highest ranks of Wall Street when he was appointed chairman of Citigroup in December.

Sir Win, who has dual British and German citizenship and was born in Aachen in 1941, joined Citigroup in 2000 after the bank bought Schroders, where he was chairman and had worked since 1966.

He worked for Schroders in Hong Kong before returning to the UK in 1983 and moving up to become chief executive ahead of 'Big Bang' in 1986. He became chairman of Schroders in 1995.

The 67-year-old, who had a short stint at Chase Manhattan bank in New York early in his career, negotiated the division of Schroders in 2000, with what was then Salomon Smith Barney acquiring Schroders' corporate advisory division. The asset management side remains as an independent London-listed entity. With Citigroup then acquiring Salomon, Sir Win became chairman of Citi in Europe in 2000.

Sir Win, a City grandee who is widely seen as charming and affable, has come under increasing pressure within Citigroup due to a perception that he does not have the experience to steer a mammoth financial services business at a time of turmoil.

Vikram Pandit

Vikram Pandit joined Citigroup in May 2007 when the bank bought his hedge fund, Old Lane Partners. Citi paid $800m (£411m) for Old Lane, with $165m going to Mr Pandit. He agreed to invest $100m back into the fund.

Before that, Mr Pandit had spent 20 years at Morgan Stanley, but lost out in the jostle to succeed Philip Purcell.

Indian-born Mr Pandit, who came to the US aged 16, left Morgan Stanley, taking some colleagues with him, and set up Old Lane in 2005.

On joining Citi, he initially headed its alternative investment group but his responsibilities grew to include the investment bank. He replaced Charles Prince as chief executive of Citi in December 2007.

Mr Pandit, 51, holds masters and bachelor's degrees in electrical engineering and a PhD in finance, all from Columbia. He serves on the boards of Columbia University and India School of Business Hyderabad, in India.

Sources :

Telegraph.co.uk : Citigroup profiles | 21 November 2008, 10:33PM GMT.
Bloomberg : Citigroup Names Pandit CEO to Clean Up Subprime Mess (Update2)

Temasek Plans Pay Cut The Managers

2008-11-22T13:12:00.003+07:00

By Chen Shiyin

Temasek key managers will lead a companywide pay cut, to anticipates Global recession may extend beyond 2009. The pay cut has volunteered to take a 15 percent to 25 percent.

The key managers will provide almost 90 percent of the savings from the companywide cut.

Temasek, led by Chief Executive Officer Ho Ching, is seeking to cut costs amid a slump in financial markets that has wiped out more than $33 trillion in global stocks this year, hurting the value of its investments. It bought stakes in Merrill Lynch & Co. and Barclays Plc after the credit crisis led to about $966 billion of writedowns and credit losses and more than 170,000 financial job losses worldwide.

Sources :
Bloomberg : Temasek’s Managers to Lead Companywide Pay Cut Amid Recession | November 21, 2008 17:05 EST.

20th This Year : Community Bank of Loganville, Georgia, Closed

2008-11-22T12:57:00.004+07:00

By Ari Levy

Community Bank of Loganville, Georgia, was closed by a state regulator today, the 20th U.S. bank seized this year as foreclosures rise and home prices extend declines in the worst housing slump since the Great Depression.

Bank of Essex in Tappahannock, Virginia, will take over all of the $611.4 million of deposits from Community Bank, Community Bank’s four offices will open Nov. 24 as Bank of Essex branches.

Bank of Essex will buy about $84.4 million of the failed bank’s $681 million in assets, Community Bank opened in 1946.

Regulators this year have closed the most banks since 1993, including 15 since July, and the collapses of Washington Mutual Inc. and IndyMac Bancorp Inc. were among the biggest in history. The U.S. is seeking to boost bank capital and avert failures using $250 billion from a bank-rescue fund enacted after the housing slump and tightening credit froze markets.

The U.S. closed 27 banks from October 2000 through the end of last year, according to a list at fdic.gov.

Related Posts :

19 Bank Fail This Year

Sources :

Bloomberg : Community Bank of Loganville, Georgia, Is Shuttered (Update1) | November 21, 2008 18:42 EST

Prince Alwaleed Save Citigroup

2008-11-21T10:09:00.003+07:00

Rich Saudi Arabian prince, Alwaleed bin Talal will save Citigroup. The largest individual shareholder of Citigroup is willing to inject funds into the bank's.

The inject will increasing ownership to be 5 percent from the current less than 4 percent. Shares of Citigroup, which previously fallen to 23%, now rise 21 cents to US $6.61 in pre-opening transactions Thursday (20/11/2008).

In his statement, Prince Alwaleed said that he believes Citigroup shares have been dramatically undervalue plummet to 90 percent since 2006. Citigroup market capitalization now only remaining US $34.9 billion.

By this calculation, Prince Alwaleed will inject up to US $349 million, based on the closing market price yesterday.

"The Bank will take all steps necessary to put these companies face many challenges in the banking industry and the global economy," said prince Alwaleed, as quoted from Reuters, Thursday (20/11/2008).

Prince Alwaleed was to reduce the portion of the shares at the end of 2007. However, in early 2008, Citigroup capital increase of about US $50 billion from several sovereign wealth funds and other investors including the Prince Alwaleed. Citigroup recently also received bailout package US $25 billion from the US government.

Shares of Citigroup since this year has fallen to 78%. With bad debts problem, Citigroup announced to axe 52,000 jobs had make shares of Citigroup plummet to the lowest point in 13 years in the trade yesterday.

Oil under $50 on fears of deep recession

2008-11-20T22:41:00.005+07:00

By. PABLO GORONDI | Associated Press / AP Online

Oil prices plunged over $3 Thursday, briefly dipping below $50 a barrel as 16-year high U.S. unemployment figures and plummeting stock markets caused investors to price in lower crude demand.

Light, sweet crude for December delivery was down $3.25 to $50.37 a barrel in electronic trading on the New York Mercantile Exchange by early afternoon in Europe.

Crude briefly dipped below $50 for the first time since Jan. 18, 2007 when prices struck $49.91, just a penny above the 2007 low.

On Wednesday, the contract fell 77 cents to settle at $53.62.
In London, January Brent crude fell $2.89 to $48.83 on the ICE Futures exchange.

Markets worried that a steep economic slowdown would cut demand for oil.

A production cut by OPEC may keep prices from falling further. OPEC President Chakib Khelil has signaled the group may announce production cuts at the December meeting, but some members, such as Iran, have called for earlier cuts.

In other Nymex trading, gasoline futures fell 7.30 cents to $1.034 a gallon. Heating oil lost 5.33 cents to $1.7064 a gallon while natural gas for December delivery slid 9.9 cents to $6.644 per 1,000 cubic feet.

Hear the news from MSNBC

Sources :
IStockAnalyst : Oil dips under $50 on fears of deep recession | Thursday, November 20, 2008 9:59 AM.

Peugeot Citroen to cut 2,700 jobs

2008-11-20T22:28:00.004+07:00

French automaker PSA Peugeot Citroen said Thursday it plans to cut at least 2,700 jobs in response to the worsening economic crisis that has seen European car sales plummet.

In a statement, the carmaker said the cuts would be made "at all sites and in all group departments."

Peugeot could offer "voluntary departure measures" to another 850 technicians and white collar employees at a Peugeot site in western France, taking the total possible job cuts to 3,550, company spokesman Laurent Cicolella said.

"This recession will continue in 2009," the company warned, with a minimum decline of 10 percent Europe-wide for the year, the company forecast.

With this forecast the carmaker plan to shift about 900 factory workers from its plant in Rennes to other sites, because of a "significant drop" in demand for the mid- to upper-range sedans built at Rennes.

Car sales in Europe have fallen dramatically since July, with an estimated 17 percent drop in the fourth quarter alone, Peugeot Citroen said.

Peugeot shares fell on the news, and at 0930 GMT were down 3.3 percent at euro12.89 ($16.29).

Sources :

IStockAnalyst : Peugeot Citroen to cut at least 2,700 jobs | Thursday, November 20, 2008 9:59 AM.

Swiss Central Bank Cuts Interest Rate 100 Basis Points

2008-11-20T20:28:00.004+07:00

Thursday, the Swiss National Bank unexpectedly lowered the target range for the three-month Libor by 100 basis points to 0.5%-1.5%, with immediate effect. This is the second reduction in key interest rate in November.

The central bank noted that fall in raw material and oil prices would assist to restore price stability sooner than expected. Inflation would possibly fall below 2% as early as the end of this year, the SNB said.

On November 6, the SNB had cut the interest rate by 50 basis point to 2% from 2.5%, which was the second rate cut in a span of one month. The central bank was not scheduled to announce a rate decision until December.

Sources :

RTTNews : Swiss Central Bank Unexpectedly Cuts Interest Rate | 11/20/2008 7:34 AM ET.
Bloomberg : SNB Cuts Benchmark Rate by a Record 100 Basis Points (Update2) | November 20, 2008 07:58 EST.

BASF To Cut 20,000 Jobs

2008-11-19T21:40:00.005+07:00

By. Steve Goldstein | MarketWatch Pulse

LONDON -- BASF , the world's biggest chemicals company, said it was mothballing several plants as it reported a "massive" decline in demand as the auto industry canceled orders. This condition will affect cutting 20,000 jobs and warned adjusted earnings before interest and tax won't grow this year.

It's temporarily shutting down 80 plants worldwide and reducing production at 100 plants. Flexible working time arrangements will be used wherever possible and scheduled maintenance work is being brought forward.

Most affected will be the company's main site in Ludwigshafen, Germany, where 5,000 jobs will be lost. The job cuts are coming as the company has purchased 94.6% of Switzerland's Ciba.

Sources :

FoxBusiness : BASF To Cut 20,000 Jobs As It Warns On Profit
MarketWatch : BASF shutting plants as it warns on profit

Toyota to Cut Production & temp Worker

2008-11-19T21:29:00.005+07:00

Associated Press | Wednesday, November 19, 2008

TOKYO--Toyota Motor Corp.(TM) will reduce production in the United States to cope with slowing sales in the world's largest economy.

Toyota will stop production at all its plants in the U.S. and Canada for two extra days in addition to the regular Christmas holidays next month, and cut about half of 500 temporary workers at a plant in Georgetown, Kentucky by March.

Beginning January, Japan's top automaker plans to reduce production of the Sienna minivan at its Indiana plant, and slow a line for the Camry and Avalon sedans at the Kentucky plant.

At New United Motor Manufacturing Inc. in Fremont, California -- its joint venture with General Motors Corp. -- Toyota will eliminate a shift producing the Tacoma pickup truck.

Earlier this month, Toyota net profit for the July-September quarter plunged 69 percent and downgraded its full-year profit forecast to about a third of last year's result.

Sources :

FoxBusiness : Toyota to Cut Domestic Production
MarketWatch : Toyota to cut US output, cut temp workers

Citigroup Axe 52,000 Jobs Again

2008-11-18T19:46:00.003+07:00

Global banking giant Citigroup is to axe 52,000 jobs in the next six months as it attempts to reduce its cost base by 20pc in the wake of $20.8bn of losses in the last 12 months as a result of the continuing financial crisis.
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By. James Quinn in New York and Jonathan Sibun in London
Last Updated: 11:05PM GMT 17 Nov 2008

Cranes surrounding the Citigroup tower at Canary Wharf, east London.

The job cuts – the biggest round of job losses by a single company since the credit crisis began in the summer of 2007 – will affect 15pc of the bank's global staff, reducing numbers from 352,000 to 300,000.

The Daily Telegraph understands that up to 1,500 of the job losses will come from Citigroup's operations in the UK, where the bank employs 11,000 people, with the majority coming from its European headquarters in Canary Wharf, London.

Chief executive Vikram Pandit believes the cuts are necessary in order to bring the bank's cost structure in line with its future profitability, with 2009 expenses set to be in the $50bn-$52bn range, down 20pc from their peak levels.

Sources :
Telegraph.co.uk : 52,000 jobs to go at Citigroup

China Oil Demand Weakens

2008-11-18T19:39:00.003+07:00

The Associated Press | Published: November 18, 2008

BEIJING: Fuel demand in China has weakened sharply since September due to the global financial crisis, the country's biggest oil company says.

China National Petroleum Corp. has suffered a "fairly big impact," its president, Jiang Jiemin, said in a Nov. 14 speech to employees, according to a transcript on the company's Web site. Jiang gave no details.

"Especially since September, the impact is more obvious and prominent. Basically, it is reflected in such things as a sharp shrinking of consumer demand," Jiang said, according to the transcript.

China's economic growth slowed in the latest quarter to 9 percent, down from 11.9 percent last year.

Sales of gasoline and diesel at State-owned CNPC, the parent of publicly traded PetroChina Ltd., and its rival China Petroleum & Chemical Corp., also known as Sinopec, have grown at annual rates of more than 10 percent in recent years.

Sources :

International Herald Tribune : China oil demand weakens due to global crisis

Three of America’s largest cities have asked Bailout

2008-11-16T07:45:00.003+07:00

Posted by. David Gaffen | November 14, 2008, 2:32 pm

Three of America’s largest cities have asked the U.S. Treasury for billions of dollars to shore up pension systems, cover short-term borrowing needs and boost infrastructure spending.

The mayors of Philadelphia, Phoenix and Atlanta asked for the creation of a $50 billion fund to spur infrastructure investments as well as for loans to cover unfunded pension liabilities and to address cash flow crunches amidst tight credit markets.

They pointed to recent budget cuts in Philadelphia, Chicago, Phoenix and New York, saying that as cities finish rebalancing budgets their citizens could find themselves facing reduced police, fire and senior services as well as potential job losses.

They said stimulus packages currently under consideration by Congress would do little to help cities themselves because of their structure. The mayors envision funds to fulfill their requests coming from the government’s $700 billion Troubled Asset Relief Program. Of the $350 billion Congress has already allocated to Treasury under the program, $290 billion has been promised to several banks and to troubled insurer American International Group.

Mr. Paulson, in a news conference Monday, said assisting state and local governments isn’t the focus of the TARP legislation. The focus of TARP is to help strengthen our financial system and support lending institutions, he said.

Sources:
MarketBeat WSJ Online : TARP City

Pakistan Agrees to $7.6 Bln IMF Loan

2008-11-16T07:26:00.005+07:00

By Khalid Qayum

Nov. 15 (Bloomberg) -- Pakistan reached an agreement in principle with the International Monetary Fund on a $7.6 billion loan package aimed at preventing the nation from defaulting on foreign debt and restoring investor confidence.

Pakistan, has been forced to seek IMF assistance after its foreign-exchange reserves shrank 75 percent in the past year to $3.5 billion last week.

The State Bank of Pakistan, the nation's central bank, increased its benchmark interest rate by 2 percentage points, the most in more than a decade, to 15 percent on Nov. 12, citing inflation that reached 25 percent in October, a 30-year high.

The IMF funds would be available over 23 months and have an interest rate of 3.5 percent to 4.5 percent.

The rupee in October plunged to an all-time low and the balance of payments deficit in the first three months of the fiscal year started July 1 widened to $3.95 billion, from $2.27 billion a year earlier. The deficit reached a record $14 billion last year.

Standard & Poor's yesterday cut Pakistan's debt rating to CCC from CCC+, the lowest level in 10 years, citing the risk of a default on external debt payments of $3 billion due in the next 12 months.

Sources:

Bloomberg : Pakistan Agrees to $7.6 Billion IMF Loan Program (Update3)

Saudi King Pledges Global 'Stability' in Oil Markets at G-20

2008-11-16T07:14:00.004+07:00

By Timothy R. Homan

Nov. 15 (Bloomberg) -- Saudi Arabia will help alleviate global financial stress by maintaining stable oil markets and boost its own economy by funding infrastructure projects, King Abdullah said in Washington.

"We will continue to fulfill our role in ensuring the stability of the oil market," Abdullah said today in a statement after a five-hour summit with the Group of 20 leaders. "We will continue the program for government investment in spending on basic projects and services."

Abdullah said he expects infrastructure spending "for the government and oil sectors to exceed $400 billion over the next five years."

The world leaders agreed that more action must be taken to shore up the global economy while improving regulation of financial markets, according to a statement released by the White House after the meeting. Nations should act individually "as deemed appropriate" to deal with domestic economic concerns.

OPEC decided on Nov. 13 to meet in Cairo at the end of the month for its third meeting in as many months as oil prices fell to a 21-month low. The group announced a reduction of 1.5 million barrels a day on Oct. 24, after a September agreement to pare excess supplies by observing official output quotas.

"Saudi Arabia has made many sacrifices, including maintaining costly additional productive capacity amounting to about 2 million barrels per day," Abdullah said in today's statement.

G-20 members are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the U.S., the U.K. and the European Union.

The Netherlands and Spain are also represented, as are the IMF, World Bank, the Financial Stability Forum and United Nations.

Sources :

Bloomberg : Saudi King Pledges Global `Stability' in Oil Markets at G-20

Tech firms feel impact of economic crisis

2008-11-15T07:08:00.005+07:00

(RTTNews) - In recent days, many technology companies have announced plans to cut jobs and restructure their operations to reduce costs. Many have issued profit warnings for the current quarter and the full year.

Market research firm Gartner, Inc. (IT) said last month that IT spending would slow in 2009, as global economic problems are impacting IT budgets.

Peter Sondergaard, senior vice president at Gartner and global head of Research, said, "Developed economies, especially the United States and Western Europe, will be the worst affected, but emerging regions will not be immune. Europe will experience negative growth in 2009, the United States and Japan will be flat."

Nokia Corp. (NOK: News ), the world's biggest maker of mobile phones, on Friday lowered its outlook for industrywide mobile device volumes for the fourth quarter and the full year 2008, citing a sharp pull back in global consumer spending amid the global economic slowdown and unprecedented currency volatility.

Earlier Friday, software and computer server maker Sun Microsystems Inc. (JAVA: News ) said it plans to slash up to 6,000 jobs, or 18% of its global work force, as it scrambles to cut costs to offset a devastating slump in sales of its high-end servers. Sun also said its software chief, Rich Green, has resigned, as the company splits its software division into three new business groups.

Intel Corp. (INTC: News ), the world's biggest chipmaker, on Wednesday lowered its fourth quarter revenue forecast, citing significantly weaker than expected demand in all geographies and market segments.

Intel's announcement came soon after chipmaker National Semiconductor Corp. (NSM: News ) lowered its second quarter revenue forecast and announced plans to cut 330 jobs, and semiconductor equipment maker Applied Materials Inc. (AMAT: News ) reported a 45% drop in fourth quarter profit and said it will cut 1,800 jobs.

Gartner last week reduced its estimate for semiconductor industry growth in 2009 to 1% from nearly 8%, citing the impact of the economic crisis.

Chipmaker Qualcomm Inc. (QCOM: News ) last week reported a 22% drop in fourth quarter profit and forecast first quarter and fiscal year 2009 revenue and earnings below analysts' estimates.

Also last week, Cisco Systems, Inc. (CSCO: News ), the world's largest computer networking gear maker, reported first quarter profit that remained essentially flat with last year even as sales increased 8% in what it called a very a challenging global economy. However, Cisco chief executive John Chambers warned on a conference call that the company's second quarter sales could fall 5% to 10% from a year ago.

Texas Instruments Inc. (TXN), the world's second largest maker of mobile phone chips, last month reported a 27% drop in third quarter profit and forecast fourth quarter revenue and earnings below analysts' estimates. The company also said it was in talks with potential buyers to sell part of its wireless operations.

Even Microsoft Corp. (MSFT: News ) could not buck the impact. The software giant last month reported first quarter profit that rose a modest 2% from last year, as revenue growth slowed amid the challenging economic environment. The company forecast second quarter revenue and earnings below analysts' current consensus estimates and lowered its revenue and earnings forecast for the fiscal year 2009.

Related Post :

Source :

Tech firms feel impact of economic crisis, 11/14/2008 7:04 PM ET.

ANZ bank to axe more than 500 jobs

2008-11-15T06:47:00.004+07:00

By Peter Smith in Sydney
Published: November 14 2008 09:42 | Last updated: November 14 2008 09:42

Australia and New Zealand Banking Group is to cut more than 500 jobs in a move that adds weight to industry estimates that as many as 10,000 positions could be lost from Australia’s financial services industry in the next 18 months.

ANZ admitted to the job cuts on Friday after it poured cold water on a newspaper report that said it planned to cut 10 per cent or 3,500 workers.

Australia’s financial services industry is in the midst of a cost-cutting drive in response to weaker domestic and international growth and the global credit crisis. Local and international banks operating in Australia are also braced for a rise in bad debt charges as a rising number of indebted businesses fail.

Macquarie Group, the Australian investment bank which reports results on Tuesday, has also been the subject of unsubstantiated rumours it may cuts thousands of jobs among its 13,000 employees. Nicholas Moore, chief executive, is expected to be quizzed on the group’s costs base and potential job losses next week.

Westpac, which has bought fifth-ranked St George for A$17bn, has not commented on the level of job cuts resulting from the merger. However, the Finance Sector Union, which represents 50,000 workers, believes it could result in 5,000 fewer jobs at the enlarged entity.

The FSU estimates that 1,500 have already been lost from Australia’s financial services industry this year.

KPMG, the professional services firm, said it was cautious about the outlook for Australia’s banking sector in 2009, and estimated that perhaps two thousand jobs would be lost at each of Australia’s five largest banks.

KPMG noted there had been weakness in the banks’ cost to income rations. With falling revenues, the banks need to cut costs, including jobs, to maintain their cost to income rations, KPMG added.

ANZ said on Friday that it had already announced a “new structure with fewer middle management roles”.

“What we are undertaking is a significant belt tightening exercise over the coming weeks and months – the focus is on middle management roles - but at this stage its not possible to be more definitive on numbers,” it said

Source :

ANZ bank to axe more than 500 jobs

Retailers' Weak Results

2008-11-15T05:34:00.005+07:00

(RTTNews) - The ongoing economic crisis, which has been dubbed as the worst since the Great Depression, has wreak havoc on retailers, as it has forced consumers to sharply cut back on their spending. A shaky job market and a prolonged housing slump have added to the gloom.

Many retailers have reported lower earnings for the third quarter and issued profit warnings for the all-important fourth quarter, which includes the holiday shopping season. Wall Mart Stores, Inc. (WMT: News ), the world's biggest retailer, reported higher earnings for the third quarter but forecast fourth quarter earnings below analysts' estimate and cut its earnings outlook for the full year.

With the holiday shopping season approaching fast and economic data pointing to weak sales, retailers are expected to experience their weakest holiday sales in years.

The Commerce Department said today that retail sales fell 2.8% in October, surpassing the old mark of a 2.65% drop in November 2001 in the wake of the 9/11 terrorist attacks. Economists had been expecting sales to decrease by a more modest 2.1%.

Sales excluding autos fell 2.2%, almost twice the expected drop of 1.2%. It was the biggest ex-autos drop since at least 1980.

In October, vehicle sales were down 5.5%, furniture sales fell 2.5%, electronic sales were down 2.3%, department store sales declined 1.3% and non-store sales (internet & catalogue) were down 1.8%. Gas sales fell a stunning 12.7%, reflecting a sharp drop in gas prices.

October also marked the fourth consecutive month of increasingly steep declines in consumer spending.

Among the retailers, department store operator Kohl's Corp. (KSS: News ) on Thursday reported a 17% drop in its third quarter profit and cut its earnings outlook for the fourth quarter and the full year. Kohl's also said it expects same-store sales to fall between 8% and 12% for the fourth quarter.

Also on Thursday, fashion specialty retailer Nordstrom Inc. (JWN: News ) reported third quarter earnings that fell 57% from last year. The company also forecast fourth quarter earnings below analysts' expectations and lowered its earnings outlook for the full year.

On Friday, department store chain J.C. Penney Co., Inc. (JCP: News ) reported a 52% drop in its third quarter profit, forecast fourth quarter earnings below analysts' expectations and predicted that the challenging retail conditions will last well into 2009. J.C. Penney said it expects same-store sales to fall 9% to 11% in the fourth quarter.

Teen apparel retailer Abercrombie & Fitch Co. (ANF: News ) said Friday that its third quarter profit fell 46% from last year, hurt by weak demand for its girls' tops and the overall consumer spending slowdown. The company forecast fourth quarter earnings below analysts' expectations and slashed its earnings outlook for the full year 2008. The company expects same-store sales to drop 26% in the fourth quarter.

Earlier this week, electronics retailer Best Buy Co (BBY: News ) cut its full-year forecast, citing "seismic changes" in consumer behavior.

Also this week, Circuit City Stores, Inc., the second largest U.S. electronics retailer, filed for Chapter 11 bankruptcy, citing vendor concerns about the company's liquidity and ability to pay for its purchases in a challenging economic climate. However, the troubled electronics retailer said it plans to continue operating its business as usual.

Amid the global financial crisis, shoppers have curbed their spending on buying TVs and other discretionary items to focus on necessities, as rising unemployment and tight credit dents their purchasing power.

To overcome the impact, many retailers are taking drastic steps to cut costs through store closures and job cuts.

If the recent results and outlooks from retailers are any indications for difficult days ahead, the retail sector should brace itself for a disappointing holiday season, when retailers usually generate about one-third of their annual sales.

Related Post :
1. J.C Penney Q3 Earning Slides

Source :
1. Retailers' weak results, outlooks ominous signs for holiday shopping season, 11/14/2008 5:02 PM ET.

SEC Roundtable Examine Impact Of Financial Turmoil On Small Business

2008-11-15T05:25:00.004+07:00

(RTTNews) - The impact of the credit crisis on small businesses will be the focus of a Securities and Exchange Commission panel, the U.S. regulatory agency announced Friday. The forum will allow representatives from both the public and private sectors to discuss how small businesses are dealing with the recent financial turmoil in terms of raising capital.

Topics like the current credit crisis, regulatory initiatives to facilitate small business capital formation, and intermediaries assisting small businesses with raising capital and M&A activities will be discussed, the SEC said.

The forum will take place on November 20th at SEC headquarters in Washington, D.C.

Source :
1. SEC Announces Roundtable To Examine Impact Of Financial Turmoil On Small Business, 11/14/2008 4:43 PM ET.