Eeyores news with a view

Too many times in two weeks,
Dow plunges 733 on new disheartening economic data October 15, 2008 - 7:39pm
By JEANNINE AVERSA AP Economics Writer
(AP) - The economy lurched deeper into the doldrums Wednesday and took the stock market down with it, sending the Dow Jones industrials to a staggering 733-point loss and erasing any hopes that the convulsions that have shaken Wall Street for a month were over.
The daylong sell-off came as retailers reported the biggest drop in sales in three years and as a Federal Reserve snapshot showed Americans are spending less and manufacturing is slowing around the country.
Piling up losses in a rough final hour of trading, the Dow ended the day down nearly 8 percent _ its steepest drop since one week after Black Monday in 1987. The Dow has wiped out all but about 127 points of its record-shattering 936-point gain on Monday of this week.
Earlier this week, after governments around the world announced plans to use trillions of dollars to prop up banks, including a U.S. plan to buy about $250 billion in bank stocks, the market had appeared to be turning around _ or at least calming down.
Instead, relentless selling gave the Dow its 20th triple-digit swing in the past 23 trading sessions, an unprecedented run of volatility. The Dow has finished higher on only one day this month. The loss of 733 points is the second-worst ever for the average, topped only by a 778-point decline Sept. 29.
The plunge in stocks put the nation's economic anxiety front-and-center as the two major presidential candidates, Sens. Barack Obama and John McCain, prepared for their final debate Wednesday night in Hempstead, N.Y.
In the meantime, the man they each hope to succeed met with his Cabinet. President Bush predicted "in the long run that this economy will come back."
(the rest of the article is here) http://www.wtop.com/?nid=111&sid=1450051

Again it happening, America is the leader, but a not very good one.
World stocks tumble as Tokyo markets plunge 11 pct October 16, 2008 - 6:34am
Pedestrians watch an electric market board in Tokyo, Thursday, Oct. 16, 2008. Japan's key stock index plunged more than 10 percent in early trade Thursday, hit by another dive on Wall Street and growing recession fears. (AP Photo/Katsumi Kasahara)
By JEREMIAH MARQUEZ AP Business Writer
HONG KONG (AP) - World stocks tumbled Thursday, with Tokyo's market plunging more than 11 percent, after another dive on Wall Street as worse-than-expected data about the U.S. economy heightened fears of a global recession.
Japanese Prime Minister Taro Aso blamed the renewed drop in markets, which had rebounded earlier this week, on investor concerns that the U.S. government's $700 billion bank bailout was insufficient.
"Since it was insufficient, the market is again falling sharply," Aso told lawmakers. He did not elaborate.
Tokyo's Nikkei 225 stock average slid 1,089.02 points, or 11.41 percent, to 8,458.45, its biggest drop since the 1987 stock market crash.
In South Korea, the main index dropped 9.25 percent after Standard & Poor's said it may downgrade the credit ratings of some of the country's leading banks. The ratings agency warned the credit crisis could make it difficult for the companies to refinance maturing debt.
Hong Kong's key index trimmed losses, closing down 4.8 percent after falling more than 8 percent earlier.
Benchmarks in Britain, Germany and France opened about 3 percent lower. Russia's RTS also fell back.
Investors were unnerved by U.S. data showing the country's retail sales fell 1.2 percent in September, almost double the 0.7 percent decline analysts expected _ clear evidence that consumer spending, which accounts for more than two-thirds of U.S. economic activity, was weakening.
That was followed by more bearish data from the U.S. Federal Reserve that showed the economy continued to slow in the early fall as financial and credit market problems took a turn for the worse.
All told, the readings provided some of the most ominous signs to date that the world's largest economy _ a critical export market for Asia _ was sliding into recession, if not already in one.
"Sentiment is deteriorating very fast. People are losing what little confidence they have on a day-by-day basis," said Jacky Choi, a Hong Kong-based fund manager at Value Partners Ltd., which manages about $5 billion in Asia. "Everyone is very worried about the economy in the U.S and around the world.
In New York on Wednesday, the Dow Jones industrial average ended down 733.08, or 7.87 percent, at 8,577.91 _ its second-biggest point loss ever.
U.S. stock futures were higher, suggesting Wall Street might rebound Thursday. Dow futures were up about 1 percent at 8,600. (The rest of the story can be found at:)
http://wtop.com/?nid=111&sid=630962

Great Depression holds lessons for surviving tough economy

(CNN) -- Memories of salvaging and stealing to avoid going hungry are part of the legacy of the Great Depression. Some iReporters say they can't help but look at the current economy and feel the past holds lessons for the present.

Donna LeBlanc of Waxia, Louisiana, says she carries no credit to this day as a result of the frugality and self-reliance instilled in her by her family. Her husband keeps the couple's credit card and maintains a zero balance.
The Great Depression meant scary times for many households as a period of economic downturn spread throughout the world. Historians trace its start to the "Black Tuesday" stock crash on October 29, 1929, and argue that the resulting global desperation set the stage for World War II.
LeBlanc said her grandparents were fortunate that they didn't have investments and could grow -- or catch -- their own food during the Depression years.
Her grandfather Lester was a "Cajun cowboy" often seen wearing a cowboy hat, and her grandmother Ida was a resourceful woman who spent much of the 1930s working as a store clerk. LeBlanc, always told never to keep credit card debt, heard frightful stories from Ida.
"She remembered vividly the barrels of flour, the bolts of cloth and the hunger in the faces of people as they begged for store credit," LeBlanc said. "The store must have been at least marginally successful, because my grandmother was able to purchase, a piece at a time, a complete six-person setting of Gorham Chantilly silverware for her trousseau, linens and even a Lane cedar chest to house her treasures."
The couple would catch wild hogs, feed them corn for a year and eat them once the wild taste was out of the scavenging animals. They also took advantage of available squirrel meat, a common food in the South at that time.
"It was a uniquely disgusting thing ... to see my grandfather take a stewed, skinned squirrel's head, smack the skull's dome with a heavy silver tablespoon, and dine on the brains," LeBlanc said.
Years after the Depression, LeBlanc's grandparents were well off once again. Ida became a packrat and couldn't help saving what she could. When the family opened up the old cedar chest after she died, they found a decades-old treasure trove of sewing materials and other keepsakes. The Great Depression turned many Americans into packrats who couldn't bear to part with anything of potential value. They couldn't always afford to buy what they needed.

Pam van Hylckama Vlieg of Williamsburg, Virginia, says her great grandfather, Glen Surber, resorted to stealing food at times because he had hit rock-bottom.
Surber left the family behind in Saltville, Virginia, so he could head out to West Virginia's coal mines. After he got laid off, he found himself trying to steal chickens from a nearby farmer to feed his hungry family. He hid behind a tree to wait for nightfall, but his plan was stymied when he found another person lurking in the shadows.
"Both men took off running and then they realized they each thought the other was the farmer, but they were both there to steal a chicken," van Hylckama Vlieg said. "Needless to say, that was another night of water bread."
Digging into her memories, van Hylckama Vlieg says her great grandfather eventually found a work program after the New Deal and was able to rebuild his life.
She is confident we haven't hit another Depression and that we've learned enough lessons from the past to avoid letting things get as bad as they were before.
"Poppy always said the world turns and everything that has happened would happen again. I am sure if he were still with us today he would be warning us to start a garden and buy some chickens."
Saving is a habitual behavior for those who have lived through the Great Depression, says Anjanette Sanchez of Globe, Arizona. Her grandmother, Vera Vasquez, had a difficult time with the Great Depression and seemed to be scarred by it long after.
"She spoke of the time with great disgust in her voice as if it was the most awful time of her life," Sanchez said. "She mostly spoke of being hungry and having to wear old boots that didn't fit."
Vasquez continued to save her things and always kept her freezer packed with food -- like frozen cactus to eat with her scrambled eggs -- because she'd lived through harsh times. There was never room for ice cubes.
"I guess to her, food was more valuable than ice," Sanchez said. "Her motto at the table was to eat as much as you want, but not to waste the food. Take all you want, but eat all you take."
Sanchez now passes on the same ideas to her children and reminds them not to be wasteful.

Kimberly Kolaski of Richmond, Virginia, says her family's claim to fame is her great granduncle Paul Satko's remarkable attempt to travel to Alaska in a wooden ark to find land and a better life. He spent a couple of weeks making the treacherous trip on board the boat, termed the Ark of Juneau.
"He was on a mission and he was going to do it no matter what," Kolaski says. She's heard numerous stories about the hardships Satko endured, including being stopped while driving his unusual payload to Seattle, Washington, where the ark was to be launched.
The story is inspirational for the family and provides a sobering lesson about economic security for Kolaski. "I've learned to put my money away and don't touch it," she says.

Sheila Elrod of Atlanta, Georgia, says many secrets to success have been passed along through the years in her family.
"My grandfather, born in 1898, was an established small businessman by 1929, owning and managing a gas station and grill patronized by the mill workers. As his children and grandchildren grew into adulthood, he reminded us of some guiding principles that he learned during the depression."
Elrod says her grandmother worked inside the nearby mill because people of the time believed that one must "work hard, regardless of your status."
"Oddly enough, she and her sisters were ladies that were taught all the graces of being ladies," Elrod said. "However, here's an example that even ladies didn't shy away from hard work during that time.
Elrod said her grandfather had to be careful to whom he gave credit and learned many smart business secrets along the way. He passed them along to Elrod:
Always do the right thing.
Take care of the customer.
Pay attention to details.
Know the people with whom you are doing business.
NEVER borrow money without a clear plan for how you will pay it back.

Richard Holland of Phoenix, Arizona, says his grandfather packed up a Ford Model T in search of a better life. The family ended up taking shelter in a barn while Orville Holland continued onward to find work.
"In those days, telephones were few and far between across the Great Plains, and months elapsed with no word or money from my grandfather. The coming winter was a serious concern as they considered the threat of living in the unheated barn." "As fall approached, the story continues that my grandfather returned in a borrowed car. He had walked, hitchhiked and ridden the rails until he secured a job, saving every penny to finally rent a place for his family."
Gayla Uslu of Conyers, Georgia, says she never understood why her grandmother was so big on saving plastic bowls and other packaging until now.
"She grew up in the depression and also lived in a rural area, far from the soup and bread lines in the urban areas. It wasn't just a matter of getting food, it has to be stored and kept long-term as well."
Uslu finds much to learn from her grandmother and catches herself doing the same things that mystified her before.
"Today, I find myself really thinking twice before I throw uneaten food away. Leftovers aren't such a bad idea anymore, and I find myself holding on to a few of those plastic containers myself."

Iceland shares plunge 76% as trading resumes
Angela Jameson
Shares on the Reykjavik stock exchange plunged by 76 per cent when trading resumed after three days of closure as Iceland’s economy continued to teeter on the brink of collapse.
Shares later recovered to leave the OMX Iceland 15 index down 47 per cent in morning trade.
Market officials said the astounding figure was misleading since the country’s three largest banks — Kaupthing, Landsbanki, Glitnir — which had accounted for three quarters of the exchange’s value, had been removed from the index after they were nationalised last week.
Other financial stocks would remain on the index but would not resume trading until Iceland’s Financial Services Authority gave the green light, the bourse said.
Not counting financial shares, the main index had shed 5 per cent in early afternoon trading.
Trading in three other financial stocks — Straumur-Burdaras, Reykjavik Savings Bank (Spron) and Exista — remain suspended.
The exchange had been suspended since Thursday with the last official trade coming on Wednesday.
A delegation of Icelandic officials began talks in Moscow today over a €4 billion loan to help the country's financial sector. The head of the Icelandic delegation said that there had been no discussion so far on a Russian loan amount to Iceland but the group had received an "excellent reception."
However, the party does not included any ministers or the Icelandic central bank's chief, suggesting that negotiations have some way to go before politicians become involved.
Iceland needs Russia's money to help rebuild its battered economy after the country of 300,000 people became the most potent symbol of the damage wrought by the global credit crisis.
The UK has also offered to lend up to £100 million to Landsbanki, one of three banks taken over by the Icelandic Government, to help facilitate prompt compensation for British savers whose money has been trapped in Icesave's administration.
Iceland has turned to oil-rich Russia for help, where a €4 billion loan would be worth around one per cent of Russia’s gold and foreign exchange reserves.
Moscow has unveiled a rescue package for the Russian market worth more than $210 billion, but analysts say capital flight may not stop until global financial markets stabilise.
Helping Iceland could help to ensure that happens, although Russia’s move is widely regarded as politically motivated.
Last week, Iceland said the loan could be for between three and four years at an interest rate of between 30 and 50 basis points above Libor.
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4940623.ece

Stocks plunge anew as retail sales show steep drop October 10, 2008 - 7:17pm
By TIM PARADIS AP Business Writer
NEW YORK (AP) - Investors agonizing over a faltering economy sent the stock market plunging all over again Wednesday after two disheartening reports convinced Wall Street that a recession, if not already here, is inevitable. The Dow Jones industrials dropped as much as 572 points, more than half their huge 936-point advance from Monday, and all the major indexes fell at least 5 percent.
The government's report that retail sales plunged in September by 1.2 percent _ almost double the 0.7 percent drop analysts expected _ made it clear that consumers are reluctant to spend amid a shaky economy and a punishing stock market.
The Commerce Department report was sobering because consumer spending accounts for more than two-thirds of U.S. economic activity. The reading came as Wall Street was refocusing its attention on the faltering economy following stepped up government efforts to revive the stagnant credit markets.
The release of the Beige Book, the assessment of business conditions from the Federal Reserve, added to investors' angst. The report found that the economy continued to slow in the early fall as financial and credit problems took a turn for the worse. The central bank's report supported the market's belief that difficulties in obtaining loans have choked growth in wide swaths of the economy.
"Even though the banking sector may be returning to normal, the economy still isn't. The economy continues to face a host of other problems," said Doug Roberts, chief investment strategist at ChannelCapitalResearch.com. "We're in for a tough ride."
Fed Chairman Ben Bernanke offered a similar opinion, warning in a speech Wednesday that patching up the credit markets won't provide an instantaneous jolt to the economy.
"Stabilization of the financial markets is a critical first step, but even if they stabilize as we hope they will, broader economic recovery will not happen right away," he told the Economic Club of New York.
Analysts have warned that the market will see continued volatility as it tries to recover from the devastating losses of the last month, including the nearly 2,400-point plunge in the Dow over eight sessions. Such turbulence is typical after a huge decline, but the market's anxiety about the economy is also expected to cause gyrations in the weeks and months ahead.
Investors apparently have come to believe that Monday's big rebound, a response to the government's plan to invest $250 billion in banks to get the lending business restarted, was overdone given the problems elsewhere in the economy.
"It really doesn't come as a shock after Monday's gains were I think a little bit excessive," said Charles Norton, principal and portfolio manager at GNICapital, referring to the market's pullback.
He contends that the government has taken so many steps that investors must now wait for some of the actions to help steady the economy.
"It seems like all the tools in the tool chest have mostly been used now and now it's back to reality," he said. "We're still faced with the fact that the economy is slowing and earnings aren't very good."
Doubts about the economy were already surfacing in Tuesday's session, when investors halted an early rally and began collecting profits from stocks' big Monday advance. Wednesday's data confirmed the market's fears that the economy is likely to remain weak for some time, and that corporate profits are likely to suffer.
Mark Coffelt, portfolio manager at Empiric Funds, said moves by European and U.S. government officials to begin investing directly in banks are easing worries about credit. But the steep pullback in stocks that began last month after the credit markets lurched to a near standstill has now created worries that consumers will spend less after seeing the value of their retirement accounts and other investments drop.
"Markets abhor uncertainty and so we got a lot of that resolved this weekend and we got the reward Monday but now people are saying 'OK, now what is the economy going to do?'"
"We're definitely going to get a slowdown from the terror of going through that," Coffelt said.
In late afternoon trading, the Dow fell 544.15, or 5.84 percent, to 8,766.84 after falling more than 572.67 shortly after the release of the Beige Book.
Broader stock indicators also skidded. The Standard & Poor's 500 index fell 69.99, or 7.01 percent, to 928.02, and the Nasdaq composite index fell 110.25, or 6.20 percent, to 1,668.76.
With Wednesday's drop likely to hold, the Dow will, after a one-day break, resume a string of triple-digit losses or gains. On Tuesday, after swinging erratically throughout the session, the blue-chip index closed the day down a moderate 76 points.
The stock market was trying to recover from last week's terrible run, which erased about $2.4 trillion in shareholder wealth and brought the Dow to its lowest level since April 2003. The tumble occurred amid a seize-up in lending stemming from a lack of trust among institutions in response to the bankruptcy of investment bank Lehman Brothers Holdings Inc. and the failure of Washington Mutual Inc., which had been the nation's largest thrift.
The credit markets have been showing tentative signs of recovery, though they remain strained, and demand for safe assets remains high. The three-month Treasury bill on Wednesday was yielding 0.33 percent, up from 0.21 percent on Tuesday. Overall yields remain low, showing that demand is so high that investors are willing to earn meager returns as long as their principal is preserved.
The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 4.01 percent from 4.03 percent late Tuesday.
Meanwhile, the Labor Department said the producer price index, which measures inflation pressures before they reach the consumer, fell 0.4 percent in September, driven by lower energy costs. That decline matched analysts' expectations.
In corporate news, Intel Corp., topped analysts' estimates and posted a third-quarter profit increase of 12 percent. Shares of the world's largest maker of PC microprocessors fell 44 cents, or 2.8 percent, to $15.49.
JPMorgan's results topped forecasts but the problems seen in all types of loans, not just home equity debt but also prime mortgages and credit cards, is worrisome for the banking industry. The stock fell 63 cents to $40.08.
Wells Fargo rose $1.17, or 3.5 percent, to $34.69 after its report.
Declining issues outnumbered advancers by about 7 to 1 on the New York Stock Exchange, where volume came to 1.1 billion shares.
The Russell 2000 index of smaller companies fell 35.69, or 6.43 percent, to 518.96.
In Asian trading, Hong Kong's Hang Seng Index lost nearly 5 percent after rising more than 13 percent the previous two days. Markets in Australia, South Korea, China, India and Singapore also sank. Japan's Nikkei 225 index, however, ended up 1.1 percent after soaring 14 percent in the previous session.
In Europe, Britain's FTSE 100 fell 7.08 percent, Germany's DAX index fell 6.49 percent, and France's CAC-40 fell 6.82 percent.
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On the Net:
New York Stock Exchange: http://www.nyse.com/
Nasdaq Stock Market: http://www.nasdaq.com/

Unemployment rises at fastest rate in 17 years
Grainne Gilmore

UK unemployment has surged by a 17-year high of 164,000 to 1.79 million and could rise even further to two million by the end of the year.
The rise in unemployment during the three months to August marks the biggest increase since 1991 while the number of people claiming jobless benefits rose by 31,800 over the 12 weeks to September.
David Blanchflower, a member of the Bank of England's rate-setting committee has predicted the ILO measure of unemployment could hit two million by the end of the year.
The total number of people in employment slumped by 122,000 in the three weeks to August, the largest drop since early 1993. (the rest of the story is at)
http://business.timesonline.co.uk/tol/business/economics/article4946956.ece

Jobless shock sends London shares diving
Dearbail Jordan
London shares ended a two-day rally this morning as fears of a recession intensified and UK unemployment jumped at the fastest rate in 17 years.
The FTSE 100 index of leading blue chip companies lost 137.91 points at 4,256.3 following the surprise rise in jobless numbers, extending earlier losses when Rio Tinto, the mining giant, announced it would delay plans to sell $10 billion in assets due to "challenging financial markets"
In the three months to August, unemployment grew by 164,000 to 1.79 million – the fastest rise since 1991 – while the number of people claiming jobless benefit rose by 31,800 in the three months to September.
Across other markets, focus shifted from the global banking bailout that has been consuming investors to the wider economy and fears that a recession will soon envelop leading industrialised nations. (the rest of the story is at)
http://business.timesonline.co.uk/tol/business/markets/article4947445.ece


Researchers expect hackers to prey on cell phones October 15, 2008 - 12:25am
By JORDAN ROBERTSON AP Technology Writer
SAN FRANCISCO (AP) - Some of the most vicious Internet predators are hackers who infect thousands of PCs with special viruses and lash the machines together into "botnets" to pump out spam or attack other computers.
Now security researchers say cell phones, and not just PCs, are the next likely conscripts into the automated armies.
The mobile phone as zombie computer is one possibility envisioned by security researchers from Georgia Tech in a new report coming out Wednesday.
The report identifies the growing power of cell phones to open a new avenue of attack for hackers. Of particular concern is that as cell phones get more computing power and better Internet connections, hackers can capitalize on vulnerabilities in mobile-phone operating systems or Web applications.
Botnets, or networks of infected or robot PCs, are the weapons of choice when it comes to spam and so-called "denial of service attacks," in which computer servers are overwhelmed with Internet traffic to shut them down. For example, botnets were used against Estonia's government and financial Web sites in a devastating wave of attacks last year.
Botnets are so troubling because they have massive computing power and a seemingly endless supply of newly infected PCs to replace old ones that are wiped clean or taken offline. Millions of PC have fallen victim. The owners typically never know.
The Georgia Tech researchers say that if cell phones become absorbed in botnets, new types of moneymaking scams could be born. For example, infected phones could be programmed to call pay-per-minute 1-900 numbers or to buy ringtones from companies set up by the criminals.
"The question is, can they do it effectively _ make a lot of money without much risk?" said botnet expert Joe Stewart, director of malware research with SecureWorks Inc. "And if they can, then they will do it."
The Georgia Tech researchers say a big appeal of cell phones for hackers is that the devices are generally always on, they're sending and receiving more data, and they typically have poor security. Antivirus software would suck up massive amounts of battery life, which is a killer on a mobile device.
"This is the perfect platform (for hackers)," said Patrick Traynor, an assistant professor of computer science at Georgia Tech and a contributor to its Emerging Cyber Threats Report.
One big hurdle hackers will face is learning how the cellular networks work and adapting their attacks. Unlike the wide-open world of Internet providers, cell phone operators have tighter control over their networks, which means they could shut down the lines of communication between infected phones much easier.
Traynor noted that researchers have very little hard evidence that hackers are already targeting cell phones. But successfully attacking cell phones requires that people do a lot of Internet browsing and downloading programs onto their phones, and that is just starting to happen now.
"There are some challenges for the adversaries, but we've seen them overcome the challenges in their way before," Traynor said.
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On the Net:
http://www.gtiscsecuritysummit.com/

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