Sorry but unless i make the blog entires so long that no one will read them i can't get to all the economic news each day i would like to and still have a around source of information for you all. So here is a few older ones but they still have import, in understanding how bad it really is. The last thing the Federal Reserve should be doing and wants to do is to buy short term paper like this also they have hinted at a 1/2 point or more drop (which they did a day ago). Make sure the your personal horse is still in the barn.
Here is that state of where we are after 7 losing sessions with the dow
Dow plunges 679 to fall to lowest level in 5 years
October 9, 2008 - 5:32pm
AP Business Writer
NEW YORK (AP) - Stocks plunged Thursday, sending the Dow Jones industrial average down 679 points _ more than 7 percent _ to its lowest level in five years. Stocks took a nosedive after a major credit-rating agency said it might cut its rating on General Motors and Ford, further rattling investors already fretting over the impact of tight credit on the economy.
The Standard & Poor's 500 index also fell more than 7 percent.
The declines came on the one-year anniversary of the closing highs of the Dow and the S&P. The Dow has lost 5,585 points, or 39.4 percent, since closing at 14,164.53 on Oct. 9, 2007. It's the worst run for the Dow since the nearly two-year bear market that ended in December 1974 when the Dow lost 45 percent. The S&P 500, meanwhile, is off 655 points, or 41.9 percent, since recording its high of 1,565.15.
U.S. stock market paper losses totaled $872 billion Thursday and the value of shares over all has tumbled a stunning $8.33 trillion since last year's high. That's based on figures measured by the Dow Jones Wilshire 5000 Composite Index, which tracks 5,000 U.S.-based companies' stocks and represents almost all stocks traded in America.
Thursday's sell-off came as Standard & Poor's Ratings Services put General Motors Corp. and its finance affiliate GMAC LLC under review to see if its rating should be cut. The action means there is a 50 percent chance that S&P will lower GM's and GMAC's ratings in the next three months. GM has been struggling with weak car sales in North America.
S&P also put Ford Motor Co. on credit watch negative. The ratings agency said that GM and Ford have adequate liquidity now, but that could change in 2009.
GM, one of the 30 stocks that make up the Dow industrials, fell $2.15, or 31 percent, to $4.76, while Ford fell 58 cents, or 22 percent, to $2.08.
"The story is getting to be like that movie 'Groundhog Day,'" said Arthur Hogan, chief market analyst at Jefferies & Co. He pointed to the still-frozen credit markets, and Libor, the bank-to-bank lending rate that remains stubbornly high despite interest rate cuts this week by the Federal Reserve and other major central banks.
"Until that starts coming down, you'll be hard-pressed to find anyone getting excited about stocks," Hogan said. "Everything we're seeing is historic. The problem is historic, the solutions are historic, and unfortunately, the sell-off is historic. It's not the kind of history you want to be making."
The Dow ended the day at its lows, finishing down 678.91, or 7.3 percent, at 8,579.19. The blue chips hadn't closed below 9,000 since June 30, 2003, and haven't closed at this level since May 21, 2003.
The Dow's 2,271-point tumble over the last seven sessions is its steepest seven-day point drop ever. Its seven-day percentage decline of 20.9 percent is the largest since the seven-day plunge ending Oct. 26, 1987, when the Dow lost 23.8 percent. That sell-off included Black Monday, the Oct. 19, 1987 market crash that saw the Dow fall nearly 23 percent in a single day.
Broader stock indicators also tumbled Thursday. The S&P 500 fell 75.02, or 7.6 percent, to 909.92, while the Nasdaq composite index fell 95.21, or 5.5 percent, to 1,645.12.
The Russell 2000 index of smaller companies fell 47.37, or 8.7 percent, to 499.20.
A wave of fear about the economy sent stocks lower in the final two hours of trading after a volatile morning in which major indicators like the Dow and the S&P 500 index bobbed up and down. The Nasdaq, with a bevy of tech stocks, spent much of the session higher but eventually declined as the sell-off intensified. Still, its losses were less severe because of the relatively modest drops in names like Intel Corp. and Microsoft Corp.
On the New York Stock Exchange, declining issues came to nearly 3,000, while fewer than 250 advanced.
The sluggishness in the credit markets that triggered much of the heavy selling in markets around the world since mid-September appeared little changed Thursday following days of efforts by the Federal Reserve and other central banks to resuscitate lending.
Libor, the bank lending benchmark, for three-month dollar loans rose to 4.75 percent from 4.52 percent on Wednesday. That signals that banks remain hesitant to make loans for fear they won't be paid back.
The Fed and other leading central banks this week lowered key interest rates to help unclog the credit markets and promote lending to help the global economy. While a rate cut can take up to a year to work its way through the economy, the move was aimed as a boost to investor sentiment.
"We're stuck in a morass and I think it's going to take quite some time to come out of it," said Stephen Carl, principal and head of equity trading at The Williams Capital Group.
Demand remained high for short-term Treasurys, a refuge for investors willing to trade modest returns to protect their money. The yield on the three-month Treasury bill, which moves opposite its price, fell to 0.58 percent from 0.63 percent late Wednesday. Longer-term debt prices fell, with the yield on the 10-year note rising to 3.79 percent from 3.65 percent late Wednesday.
Investors across markets were mulling a plan being considered by the Bush administration to invest in hobbled U.S. banks as a way to stabilize the financial sector. The $700 billion rescue package signed into law last week allows the Treasury Department to inject fresh capital into financial institutions and obtain ownership shares in return.
Britain rolled out a similar plan, though no U.K. bank has received any investments. In Iceland, the government now has control of the country's three major banks as it struggles to contain the troubles there.
Wall Street is also looking for any effects of short selling now that a three-week ban imposed by regulators has expired. Short selling is a technique in which investors borrow shares in a company from a broker and sell them, hoping to buy them back later at a lower price. Essentially, it's a bet that a stock's price will fall. Short sellers can lose money if they have to repurchase the stock after it has risen.
Some analysts believe the unprecedented ban on short selling _ an effort to bolster investor confidence _ did more harm than good at a time of historic market volatility. They contend that short sellers help the market rally by covering their bets and creating demand for stocks.
"I think the market's way oversold. But I can't stand in the way of this falling knife _ I'd get sliced open," said Phil Orlando, chief equity market strategist at Federated Investors. "Investors are just saying, get me out at any price."
He also said that with the short-selling rule back in play, hedge funds might be shorting again to make up for their forced liquidations.
Energy names were among the biggest decliners as the price of oil fell and investors worried about a slowing economy. Exxon Mobil Corp. fell $9, or 12 percent, to $68, while Chevron Corp. fell $9.10, or 12 percent, to $64.
Light, sweet crude fell $1.81 to settle at $86.62 a barrel on the New York Mercantile Exchange, the lowest closing price since October last year.
Health insurer WellPoint Inc. fell $3.94, or 9.7 percent, to $36.50, while insurer and investment manager Lincoln National Corp. fell $9.66, or 35 percent, to $18.31.
The tech sector saw less selling than other parts of the market after IBM Corp. affirmed its forecast.
IBM fell $1.55, or 1.7 percent, to $89. Meanwhile, Intel fell 65 cents, or 4 percent, to $15.60 and Microsoft fell 71 cents, or 3.1 percent, to $22.30.
Consolidated trading volume on the NYSE came to 8.14 billion consolidated shares compared with 8.54 billion traded Wednesday.
In Asia, Japan's Nikkei 225 closed down 0.50 percent while the Hang Seng added 3.31 percent. In Europe, Britain's FTSE-100 fell 1.21 percent, Germany's DAX fell 2.53 percent, and France's CAC-40 declined 1.55 percent.
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On the Net:
New York Stock Exchange: http://www.nyse.com
Nasdaq Stock Market: http://www.nasdaq.com
Fed to lend to companies in emergency move
October 7, 2008 - 6:30pmAP Economics Writer
WASHINGTON (AP) - Frantically trying to stop the bleeding on Wall Street, the Federal Reserve took a first-time step Tuesday to get cash directly to businesses and hinted that interest rates could come down soon. Stocks continued their free fall anyway and hit new five-year lows.
The central bank invoked emergency powers to lend money to companies outside the financial sector and buy up mounds of commercial paper, the short-term debt that firms use to pay for everyday expenses like salaries and supplies.
The Fed, which has only loaned money to banks before, made the move as the gravest financial crisis in decades wore on and concern spread around the world.
In a speech to the National Association for Business Economics, Fed Chairman Ben Bernanke delivered a strong signal interest rates may need to be cut. And he warned the country could be stuck in the economic doldrums for some time.
"The outlook for economic growth has worsened," Bernanke said. "The heightened financial turmoil that we have experienced of late may well lengthen the period of weak economic performance."
The gloomy assessment appeared to open the door wider to an interest rate cut on or before the Fed convenes again Oct. 28. The Fed's key interest rate now stands at 2 percent.
Wall Street turned its back. The Dow Jones industrials lost 508 points, more than 5 percent, to close at 9,447, the lowest since Sept. 30, 2003. The Standard & Poor's 500, a broader stock index, closed below 1,000 for the first time since that same day.
President Bush again sought to strike a reassuring tone and said the nation would make it through an economy blighted by job losses, record foreclosures and shriveled retirement savings. Congress' top budget analyst estimated Tuesday that Americans' retirement plans have lost as much as $2 trillion in 15 months.
"Have faith, this economy is going to recover over time," the president said in a speech in Virginia. "I wish I could snap my fingers and make what happened stop. But that's not the way it works."
Bush reached out to European leaders earlier Tuesday to urge coordination on efforts to solve the crisis. The White House said Bush was open to the idea of a summit.
The contagion has spread overseas. Britain's chief financial regulator was readying a statement to make before markets opened Wednesday, and the BBC reported that the British government was poised to announce a rescue package for the banking system there.
Concerns are mounting that a global recession is developing, and pressure is growing on the U.S. government to do something beyond the $700 billion financial bailout package that Bush signed into law Friday.
To that end, the Fed announced it would begin buying companies' short-term debt. The powers were bestowed during the Depression as part of the Federal Reserve Act.
The government's bailout package is aimed at thawing lending by buying bad mortgage-related debt off the books of troubled financial institutions. The idea is that the banks would then be in a better position to lend and get the economy moving.
Commercial paper borrowing usually ranges from overnight to less than a week. But in the current climate of mistrust, the market has dried up considerably.
The action makes the Fed a crucial source of credit for nonfinancial businesses in addition to commercial banks and investment firms _ and also exposes it to risk because so much of the debt would not be backed by collateral.
Credit markets, clenched up for weeks now, relaxed somewhat after the Fed's move.
The Fed said it was creating a new entity to buy two types of short-term debt, known as three-month unsecured and asset-backed commercial paper, directly from eligible companies. It hopes to have the program up and running soon, Fed officials said.
Fed officials said they would buy as much of the debt as necessary to get the market functioning again but refused to say how much that might be. They noted that around $1.3 trillion worth of commercial paper would qualify.
The Treasury Department, which worked with the Fed on the program, said the action was "necessary to prevent substantial disruptions to the financial markets and the economy."
The Treasury will provide money to the Federal Reserve Bank of New York to support the new program, the Fed said. The money would be separate from the $700 billion financial bailout package.
The Fed said it planned to stop buying the short-term debt on April 30 but may extend the program.
There was $1.6 trillion in outstanding commercial paper, seasonally adjusted, on the market as of last week, the most recent data from the Fed. The market has shrunk from $2.2 trillion last summer.
You need to understand the Federal Reserve System and the Federal Reserve Note are only based on having "faith" in our economy. When we moved off the Gold and Silver Standards, this type of crash in confidence was inevitable. When people realized that the paper money had little or no worth (ie. when the oil rose so quickly weeks ago, and the news was blaming it on the drop in value in the dollar) they soon realized how much value their homes really held. It was just to much for the common man to take. When he realizes that his savings is gone and that he will never see Social Security and if he gets it then he will have to eat dog food to live (thanks to the media and Television). He loses hope and has no sense of purpose. When he realizes that he won't be richer or better off then his father, he despairs. Because he is weak and that is the way the Government wants it, they wan the masses to be weak in mind and heart, and willing to do anything to feed themselves, secondarily he thinks of feeding his family, because that is way he has been programed by the TV.
Retirement accounts have lost $2 trillion so far
October 7, 2008 - 6:23pmWASHINGTON (AP) - Americans' retirement plans have lost as much as $2 trillion in the past 15 months _ about 20 percent of their value _ Congress' top budget analyst estimated Tuesday as lawmakers began investigating how turmoil in the financial industry is whittling away workers' nest eggs.
The upheaval that has engulfed financial firms and sent the stock market plummeting is also devastating people's savings, forcing families to hold off on major purchases and even delay retirement, Peter Orszag, the head of the Congressional Budget Office, told the House Education and Labor Committee.
As Congress investigates the causes and effects of the meltdown, the panel pressed economists and other analysts on how the housing, credit and other financial troubles have battered pensions and other retirement funds, which are among the most common forms of savings in the United States.
"Unlike Wall Street executives, America's families don't have a golden parachute to fall back on," said Rep. George Miller, D-Calif., the panel chairman. "It's clear that their retirement security may be one of the greatest casualties of this financial crisis."
More than half the people surveyed in an Associated Press-GfK poll taken Sept. 27-30 said they worry they will have to work longer because the value of their retirement savings has declined.
Orszag indicated the fear is well-founded. Public and private pension funds and employees' private retirement savings accounts _ like 401(k)'s _ lost about 10 percent between the middle of 2007 and the middle of this year, and lost another 10 percent just in the past three months, he estimated.
Private retirement plans may have suffered slightly more because those holdings are more heavily skewed toward stocks, Orszag added.
"Some people will delay their retirement. In particular, those on the verge of retirement may decide they can no longer afford to retire and will continue working," Orszag said.
A new AARP study found that because of the economic downturn, one in five workers 45 and older has stopped putting money into a 401(k), IRA or other retirement savings account during the past year, and nearly one in four has increased the number of hours he works. More than one-third of these workers have considered delaying retirement, according to the study, which also found that more than half now find it difficult to pay for basic items such as food, gas and medicine.
The hearing came just as workers are receiving _ or about to receive _ their quarterly retirement savings account statements, which are likely to show disheartening drops in the value of holdings.
Jerry Bramlett, the head of BenefitStreet Inc., a retirement savings plan administration company, said there's a risk that people will overreact to the bad news by pulling their money out of the accounts, which could add to their potential losses.
"For participants with many years of retirement, a drastic abandonment of equity positions in their retirement account will only serve to lock in as-of-yet-unrealized losses. Markets do go up and down, and 401(k) participants must try to think long-term," Bramlett said.
Still, he said workers should do their best to diversify their retirement savings accounts and "perhaps consider less volatile investments."
On the heels of enacting a $700 billion market bailout, lawmakers are searching for ways to help workers who are feeling the ripple effects of the financial crisis.
"What should we be doing to try to find a way to salvage the retirement position of American workers?" said Rep. Dennis Kucinich, D-Ohio, an opponent of the government rescue plan. Congress, he added, "rushed to protect Wall Street in hopes that some benefits would trickle down to workers."
The massive losses have already reopened a bitter and long-running debate about what role _ if any _ the government should play in helping workers save for retirement.
Some experts argue that the hefty tax subsidies that Congress has put in place in recent decades for 401(k) and other worker-contribution accounts have made people's retirement income less secure by shifting risks, decisions and costs from employers to people who often know little about investing.
"They are fatally flawed," Teresa Ghilarducci, an economist at the New School for Social Research, said of the tax-advantaged plans. "They're too risky, and it's not good policy to have workers run their own retirement plan. They want government help."
Common mistakes workers make include overinvesting in a single stock _ often their company's _ and participating in funds that carry large fees or involve excessive risk, the witnesses said.
"You cannot tell the participants at the bottom of your fund prospectus, 'Warning: Your psychology may lead you to make irrational choices,'" said Christian E. Weller of the University of Massachusetts Boston.
The current market turmoil adds to an already difficult retirement savings picture for Americans, who are increasingly shouldering the burden of managing and funding their own company-sponsored retirement savings plans as firms eliminate traditional pensions.
Even before the recent downturn, older Americans were on track to continue working longer. Twenty-nine percent of people in their late 60s were working in 2006, up from 18 percent in 1985, according to the Bureau of Labor Statistics. Over the next decade, the number of workers who are 55 and older is expected to increase at more than five times the rate of the overall work force, the BLS reported.
Falling home values and now the decimation of much of their savings could plunge older Americans into period of austerity not seen in decades, Miller said: "The fear factor is huge, and they don't see the availability of resources to them to get well."
Orszag said the situation has little precedent in American history.
"The period that we're experiencing is arguably the greatest collapse in confidence that we've experienced since the Great Depression," he said.
Spending to Save: As unprofitable as it sounds
After crunching numbers with some highly touted bank savings programs, Consumer Reports research reinforces the fact that saving money by spending is as unprofitable as it sounds.
Bank of America promises an easy way to save by rounding up every check-card purchase and sliding that difference into a savings account.
“Even though Bank of America will match some of the money you deposit, after the first three months that match goes way down. And the account pays much less interest than you can get at many other banks,” Consumer Reports Greg Daugherty said.
In advertisements, Wachovia Bank says every time a person uses their debit-card or pays a bill online it transfers $1 from their checking to their savings and will “pay you up to $300 just for saving.”
“Sounds good, but to get that full $300 bonus, you'd have to pay bills online or use your debit card 4,800 times in the first year,” Daugherty said.
Instead of wearing out that debit-card, Consumer Reports said there are better ways to save. The magazine suggests using direct deposit and putting part of your paycheck into a high-yield online savings account that charges no fees and is linked to a free, interest-bearing checking account. The account would save more money in the long run.
Consumer Reports said many employers allow employees to deposit their paychecks directly into more than one account to help them keep their savings on track.
To compare interest rates and frees, check out BankRate.com.
Russia pushes security pact to rival NATO
By Andrea Stone, USA TODAY
In a challenge to 60 years of U.S. leadership in Europe, Russia's president said Wednesday that America's financial crisis had diminished its power and called for a new security pact to rival NATO.
President Dmitry Medvedev told European leaders that Washington had abused its superpower status by invading Iraq, expanding NATO to Russia's doorstep, and espousing an "economic egotism" that led markets to collapse worldwide.
"A desire by the United States to consolidate its global domination led to it missing an historical chance" after the Sept. 11 attacks "to build a truly democratic world order," he said at a conference in Evian, France.
Medvedev proposed that European countries work with Russia to form a new trans-Atlantic organization in which the United States was no longer the dominant power.
His statements came as Russia takes a more aggressive stance against the West, especially following this summer's war in Georgia.
Medvedev has dismissed any talk of a new Cold War, but analysts say Russia envisions itself as a rising power and may sense now is the time to challenge American hegemony.
Joseph Collins, a professor at National War College, said Russia "is a country that clearly has a little Rodney Dangerfield in it. They're starved for respect."
However, "to ask the Europeans to turn their back on the United States … is laughable," he said.
Tobi Gati, a former national security adviser on Russia, said many Europeans agree NATO needs to be updated beyond its original mission of countering Soviet expansion, but they doubt "the Russians are the right people to propose this."
Russia has been hit especially hard by the global economic crisis. Its stock market has fallen 70% this year, in part because the Georgia war scared away many foreign investors.
French President Nicolas Sarkozy said he was willing to discuss Medevedev's proposal but America could not be excluded from any new pact. "America is our friend and ally," he said.
http://www.usatoday.com/news/world/2008-10-08-russia_N.htm
Here is a follow up to the sad story i posted on the 8th, it is only money nothing to kill yourself or your famly over.
Plunge in markets brings another kind of depression
Porter Ranch murder-suicide is an extreme example of the stresses gripping the American psyche, experts say. Mental health professionals say referrals have soared.
By Denise Gellene, Los Angeles Times Staff Writer October 8, 2008
A Porter Ranch man who murdered his family and killed himself last weekend as he faced financial ruin is the latest and most extreme case of a wave of distress washing over the American psyche.Karthik Rajaram, an unemployed financial advisor, left a suicide note saying that his financial state left him few options but to kill his wife, three children and mother-in-law. Los Angeles Deputy Police Chief Michel Moore described Rajaram, 45, as a man stuck in a rabbit hole of despair.
The tragic case of the Rajaram family is at the bleakest edge of the economic turmoil that is rattling Americans' emotional well-being. Worries about home foreclosures, job losses and plunging stock prices have sparked a surge in mental health problems."The closest I have seen to this in the last 10 to 20 years is the spike after 9/11," said Richard Chaifetz, chief executive of ComPsych Corp., a Chicago-based company that coordinates mental health referrals for employers. "But this is more geographically dispersed and is not going to get better in a month."Rich Paul, a vice president at Virginia-based ValueOptions Inc., which also handles mental health referrals, said that calls about stress related to foreclosure and financial hardship have gone up 200% in California in the last year.
At Kaiser Permanente's San Francisco Medical Center, Dr. Mason Turner, chief of psychiatry, said there was a fourfold increase in psychiatric admissions at his hospital during August, with roughly 60% of patients saying financial stress contributed to their problems.In Stockton, the epicenter of California's home foreclosure crisis, mental health counselor Victoria Tabios said that more than a third of her cases revolve around foreclosures. Inevitably, problems spill into other parts of family life."They are falling behind on their house payments because of bad loans, so they begin fighting and blaming each other. Some resort to drinking," she said. "It's a domino effect."By comparison, some people experience relatively minor symptoms -- fatigue, headaches and lack of motivation. The problems can gradually wear down a person as the economic turmoil continues."I'm so drained, I feel like a need a B-12 shot every 15 minutes," said glass artist Darin Jackson, 44, whose Moreno Valley neighborhood is pocked with foreclosed homes.For others, like, Rajaram, the financial pressures can seem like an inescapable pit.What drove him over the edge to total despair is a mystery. By all accounts, he had enjoyed a successful career as an investor in start-up companies before running into an economic crisis that led him to a violent end.Rajaram, his wife, 39, his 69-year-old mother-in-law, and three sons, ages 7, 12 and 19, appeared to be a typical suburban family, although one former business associate said that "he had some behavioral problems. . . . He was not an emotionally stable person."Police found no obvious foreclosure looming in Rajaram's future and no bankruptcy. But one investigator familiar with the case said Rajaram "lost a lot of money in the markets.""We know he believed he had no options," Police Capt. Sean Kane said. "It is a shame he believed that, because he clearly had options."Rates of depression and suicide tend to rise during hard economic times. A study that looked at economic shifts between 1972 and 1991 found suicides rose an average of 2% when the economy faltered.Depressed over their financial situation, people often begin to isolate themselves from family and friends, setting themselves on a downward spiral, Turner said. Cut off from a support network they so desperately need, they sink into hopelessness.But suicides are rare. More common is a nagging sense of unease that begins to disrupt work and personal relationships, and makes problems in other areas seem worse.The early signs, such as insomnia, sadness, irritability and intestinal problems, can be subtle and easily missed by family members or friends.A survey released by the American Psychological Assn. on Tuesday found that eight of 10 Americans say the economy is a major source of stress in their lives. Nearly half say they are worried about providing for their families' basic needs.
"If a person feels stressed about one thing they feel stressed about everything. It's a snowball effect," said Santa Monica psychologist and American Psychological Assn. representative Elaine Rodino.The study was conducted before the last big declines in the stock market, and Rodino is certain the figures have gone up even further.
The economic turmoil has affected not only those who lost their homes or jobs, but also broad swath of the American economy that is dependent on investments for their families' future. This week, the Dow Jones industrial average sank to its lowest point in five years.The economy "is an equal opportunity stress agent," Long Beach psychologist Jana Martin said. "It's touching people from all walks of life."At a certain point of financial loss, even small expenses can balloon into crushing burdens. Martin said one patient, a teacher, was depressed about making a career change because she could no longer afford the gasoline for her 35-mile commute.
Another patient, a small-business owner, felt like a failure because she had to lay off employees.Jackson of Moreno Valley said cheap pleasures like walks in the park or board games have become painful because they remind him that his family can't afford to do much else. "You can only play so many games of Scrabble," he said.Unlike many emotional troubles, patients' depression is so connected to their financial state that mental health professionals say they must also tackle patients' money problems. Kaiser Permanente's Turner said some patients are so debilitated that he must take on the role of financial coach.In some cases, he has helped patients apply online for mortgage refinancings during counseling sessions."These people are so depressed they just throw up their hands. They can't do anything, and problems pile up," he said. "They don't realize that if they fill out one piece of paper or make one phone call they could avoid some of these negative outcomes."Even for those who manage to dig themselves out of trouble, the psychological effects of the downturn could be lasting."If they translate the financial crisis as personal failure, it could have long-term consequences. If they feel there is no need to try very hard they will lower expectations of themselves," Martin said.After a decade of easy money and soaring housing prices, the bursting economic bubble has been hard for many people to face.For immigrant strivers intoxicated with the American dream, the blow is particularly hard.Rajaram was part of a model minority community that has achieved the American Dream in less time than almost any other wave of immigrants, said Lakshmy Parameswaran, a family counselor and founder of Houston based DAYA Inc., an organization that help South Asian victims of domestic violence. With that success comes incredible expectations and pressure."There is a constant pressure to make good and for one to show to those back home you are living the American Dream," she said. "There is a lot of pressure to have it all."A few weeks ago, the family seemed relaxed and happy at a party in Beverly Hills, recalled a friend, Uma Rajaram of Tustin."I don't think any of their close friends even know what is going on," said the woman, who is not related to the family. People don't talk much about finances, she said. "It's the culture you grow up with."denise.gellene@latimes.com
Run on Royal Bank of Scotland sees £10bn knocked off share price
Oct 8 2008 By Kevin Schofield
PANICKING City traders wiped more than £10billion off the Royal Bank of Scotland's share price yesterday as the credit crunch crisis plumbed new depths.
The value of Scotland's biggest company plunged by almost 40 per cent in a few hours. The 281-year-old business is now worth less than £15billion, compared with nearly £50billion a year ago.
RBS customers admitted they feared for the future, despite repeated assurances that the money in their accounts is safe.
And with no sign of an end to the City hysteria, the bank's 15,000 staff were left wondering if their jobs would survive.
One young employee said: "It's a dreadful feeling in there.
"Staff are worried but they're not showing it yet. No one is safe."
The Government tried to ease the crisis last night by promising to inject £50billion of taxpayers' money into the big banks.
But in the hours before Chancellor Alistair Darling's announcement, analysts were at a loss to imagine how the markets could be calmed.
Expert Tim Hughes, of IG Index, said: "At the moment, it's difficult to see what can be done for confidence in the banks."
The banking panic came after it was revealed that RBS, Lloyds TSB and Barclays bosses met Darling on Monday evening.
The news led to speculation that the banks were demanding an urgent injection of public money.
Claims spread early yesterday that RBS chief executive Fred Goodwin had asked the Government for an emergency £15billion bailout.
He later issued a denial but it was too late. The share price had already crashed.
The other big banks also suffered a bruising day as City investors worried that the rumoured Government bailout would lessen the value of their shares.
HBOS shares fell by 42 per cent, Lloyds TSB slumped by more than 13 per cent and Barclays suffered a 10 per cent fall.
Things got even worse for RBS when Standard and Poor, who rate the health of major companies, downgraded the bank's credit rating.
The move made it harder for RBS to borrow cash on money markets already frozen by the effects of the credit crunch.
Goodwin, known as "Fred the Shred" because of his record of ruthless job cuts, tried in vain to limit the damage.
He admitted the outlook for 2009 was "challenging" but insisted: "We are delivering against our plans and targets. We have operational strength to meet these challenges."
The reassurances had little effect. By the end of the day, the RBS share price had fallen to just 90p.
The banking shares slump put an end to hopes that the FTSE 100 would rebound from Monday's disastrous losses, when the market suffered its worst one-day fall since Black Monday in 1987. At the close of the day's trading, the FTSE had risen by only 16 points.
Rumours have been circulating in the City for months that RBS have severe cash problems.
The business are badly exposed to "toxic" mortgage debts from the US "sub-prime" market. Only HBOS, already set to be taken over by Lloyds TSB, have a bigger gap between the cash they hold in deposits and the loans they have made.
RBS are also burdened with huge bills from their badly timed £50billion takeover of Dutch bank ABN Amro last year.
The deal saddled the bank with their first loss in 40 years and forced former City darling Goodwin to reassure investors that he was still the man to run the company.
Staff at RBS watched in horror yesterday as the value of their business tumbled. A 20-year-old investment banking assistant said: "It came as a big shock to see the fall. It happened so quickly. We didn't predict it would affect RBS to that extent."
A32-year-old accountant added: "People are pretty despondent about everything. There is too much panic in the market.
"Banks aren't lending to each other and it's all about confidence. We haven't seen the bottom fall out yet and it is going to get a lot worse for the markets in general."
But one of his colleagues was more optimistic. He said: "Everything is so volatile. It might go the other way tomorrow."
RBS customers in Edinburgh were also uneasy, and confused by the crisis.
Neil Raeburn, 32, said customers would find the situation "scary", even though all deposits up to £50,000 are guaranteed by the Government. He said: "I could see a lot of people taking their money out of the banks."
IT worker David Nelson, 31, said: "I think somebody's making a lot of money out of this somewhere and it won't be me.
"I'm a bit concerned but I've got everything in premium bonds, which seems to be the best decision at the minute."
Despite the trauma in the banking industry, David is thinking of buying RBS shares in the next few months. He added: "They're a good long-term investment but maybe not the best in the short term."
RBS have grown over the last 300 years to become one of the top 10 banks in the world.
Last year, the bank posted a record profit of £10billion - or £2000 a minute - despite being forced to write off £1.5billion due to sub-prime mortgage debts.
http://www.dailyrecord.co.uk/news/scottish-news/2008/10/08/run-on-royal-bank-of-scotland-sees-10bn-knocked-off-share-price-86908-20783852/
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