WILD RIDE THIS WEEK AROUND THE WORLD

STORMS HURRICANES-TORNADOES

LUKE 21:25-26
25 And there shall be signs in the sun, and in the moon, and in the stars; and upon the earth distress of nations, with perplexity;(MASS CONFUSION) the sea and the waves roaring;(FIERCE WINDS)
26 Men’s hearts failing them for fear, and for looking after those things which are coming on the earth: for the powers of heaven shall be shaken.

Hurricane Norbert nears Mexico's Baja California By KIRSTEN JOHNSON, Associated Press Writer OCT 11,08

PUERTO SAN CARLOS, Mexico - Fishermen pulled in their boats and hotels warned tourists away from beaches Friday as Category 2 Hurricane Norbert bore down on Mexico's southern Baja California peninsula. Norbert, with winds of near 105 mph, was expected to hit land early Saturday along a relatively unpopulated stretch north of the resort of Cabo San Lucas.Paula Lucero Aviles set out with six children and four other adults in a small fishing boat Friday when they got a cell phone call warning them to return to the port of San Carlos, where the skies had already turned dark with the hurricane's approach.We turned back because they warned us bad weather was coming, Aviles said. We would have been risking our lives. It is coming on strong.A hurricane warning was issued for the west coast of Baja California from Puerto San Andresito to Agua Blanca. Forecasters said Norbert would weaken somewhat before hitting land.But the government issued hurricane warnings along the coast of the northwestern border state of Sonora and on the east coast of the Baja peninsula from near La Paz north to Loreto.Norbert is expected to sweep across Baja on Saturday, cross the Gulf of California and then head toward the Mexican mainland.

The storm's remnants were expected to dump more rain on water-logged West Texas, where authorities were preparing for more flooding.State and local officials plan to activate an emergency operations center Monday in Presidio, where an earthen levee is struggling to hold back the swollen Rio Grande.The Governor of Baja California Sur state, Narciso Agundez, said officials here are very worried.It is certain that it will hit land tomorrow in Baja California Sur, one of two states that make up the peninsula, Agundez said.Under overcast skies, fishermen hauled their boats onto beaches in La Paz, a port town on the peninsula's eastern coast. Yellow flags on beaches warned people to stay out of the water.Eli and Claudia Tubia, on vacation from Texarkana, Texas, took a cruise Wednesday night despite the coming storm, but their hotel in resort-dotted Cabo San Lucas was already storing outdoor furniture and paintings.They kind of cleared out the beach, and the restaurants that they have on the beach, they took all the furnishings away, Eli Tubia said.Norbert was centered 210 miles west of Baja's southern tip late Friday and was moving north at 12mph, said the U.S. National Hurricane Center in Miami.Meanwhile in southern Mexico, Tropical Storm Odile was approaching the resort of Acapulco, but was expected to remain offshore.The government extended a tropical storm warning from Lagunas de Chacahua westward past Acapulco and Zihuatanejo to Punta San Telmo, as Odile moved parallel to the Pacific coast with winds of about 60 mph.Odile was located about 75 miles southeast of Acapulco, and was moving northwest at about 13 mph. Odile could become a hurricane, and a small deviation in its path could bring the storm inland, the hurricane center said. Forecasters said Odile would sweep close to land on Saturday and could dump as much as 8 inches of rain, threatening dangerous mudslides. Odile has already caused flooding in Acapulco and forced officials to cancel classes at local schools. Civil defense officials in the southern state of Guerrero, where Acapulco is located, urged about 10,000 people living along river banks or other dangerous areas to evacuate. But Adrian Jaimes Celso, who lives in a vulnerable mountainside settlement in Acapulco, said residents don't know where any shelters are if we have to evacuate, or what provisions have been made.

As storm nears, west Texas braces for more floods By ALICIA A. CALDWELL, Associated Press Writer Fri Oct 10, 6:54 PM ET

EL PASO, Texas - Officials planned to activate an emergency operations center in west Texas, where the remnants of Hurricane Norbert are expected to bring rain to already saturated areas, an official said Friday. The storm was expected to hit Mexico's western coast early Saturday with winds of at least 100 mph. The National Weather Service issued a flood warning for the Presidio area Friday, saying that heavy rain in Mexico could cause flooding along the Rio Grande there and downriver in Lajitas.The reservoirs are full, so the water has to come out through Presidio, Presidio County Attorney Rod Ponton said.Additional rain in riverside Mexican towns could mean levee breaks in Texas, he said. Last month, heavy rains in Mexico caused Rio Grande to eclipse its banks, filling a nearly quarter-mile-wide channel between levees on each side of the border.Fearing a dam break, Mexican officials released flood waters into channels that feed the Rio Grande near Presidio and the Mexican town of Ojinaga.A levee break flooded hundreds of acres of farmland and swamped a golf course on the U.S. side east of Presidio, about 250 miles southeast of El Paso. Emergency crews built a makeshift dam along a railroad trestle to keep the flood from reaching town, but some farmland remained under water because the water table is now saturated, Ponton said.The highway that connects Presidio, Redford and Lajitas via the Big Bend Ranch State Park remained closed Friday after a flood last month washed away chunks of the road, Ponton said.The International Water and Boundary Commission, the two-nation agency responsible for maintaining border levees in Texas, has been monitoring them for weeks and plans to send more people to the area. But officials don't anticipate significant new flooding until the middle of next week, Ponton said.This isn't like standing around watching a wreck. This is like standing around, waiting for a wreck, he said. You know exactly where it's going to happen.(This version CORRECTS that the flood warning is for the Presidio area, not the El Paso area.)

British mother, teenage daughter drown in Spanish floods Fri Oct 10, 9:27 AM ET

MADRID (AFP) - A British woman and her 14-year-old daughter have drowned in a flash flood in eastern Spain which has been lashed by torrential rains, officials said on Friday. The pair had tried to cross a swollen stream on foot near the town of L'Olleria on Thursday after rising flood waters forced them to abandon the car they were travelling in with two other British citizens, a spokeswoman for the government representative in Valencia said.The flood waters reached between 12 and 16 inches but they did not correctly measure the force of the stream and they were swept away, the spokeswoman said. The other passengers in the car were not injured.The body of the 47-year-old woman and her daughter were only found at around midnight on Thursday, some four hours after they were swept away by the waters.

Israeli town hit by third day of Jewish-Arab clashes by David Furst
Fri Oct 10, 3:13 PM ET

ACRE, Israel (AFP) - Police clashed with Jewish protesters in Acre on Friday on the third day of violence between Arabs and Jews as Foreign Minister Tzipi Livni travelled to the northern Israeli city to appeal for calm. Police fired a water cannon at a crowd of about 200 people as some demonstrators hurled bottles and stones at security forces.Chanting death to Arabs, the protesters were headed from a predominantly Jewish neighbourhood to the house of an Arab when police intervened.

The incident occurred hours after Livni, who is trying to form a new government and replace outgoing Prime Minister Ehud Olmert, issued in Acre what she said was a message of reconciliation and cooperation to calm tempers within the population.

Police deployed an additional 500 officers to help the 200-strong local force after violence broke out on Wednesday night as Jews observed Yom Kippur, or Day of Atonement.We have also raised our level of alert throughout the country so that similar incidents do not occur again in Acre, or elsewhere, police spokesman Micky Rosenfeld told AFP.By Friday evening, Acre was quiet again.Calm was restored to the city in the evening, police commander Shimon Korn said on public television.Israeli President Shimon Peres had earlier appealed for calm.Jews and Arabs must stop immediately this violence which will not benefit anyone, he said in a statement.Two protesters and a police officer have been lightly wounded. Twelve people -- Arabs and Jews -- have been arrested since the first clashes broke out, Rosenfeld said.About 100 cars and 40 stores were damaged by Arab demonstrators, he said.

Rosenfeld said the initial unrest erupted when an Arab motorist drove into a neighbourhood where Arabs and Jews live, playing his car stereo loudly.A group of Jewish youths assaulted the driver, accusing him of deliberately making noise and disrupting the sanctity of Yom Kippur, when most Jews in Israel observe a religious ban on driving.Rumours then spread out, namely from mosques, claiming that the motorist had been killed, prompting several hundred Arabs to take to the streets, Rosenfeld said.Clashes started again on Thursday, when rioters from both sides hurled rocks at each other and the police used tear gas to disperse them, media reported.Football matches planned for the weekend were cancelled as was an annual theatre festival that was to be held next week and which usually draws thousands of visitors to the Mediterranean coastal city, media reported.Some MPs criticised the decision to call off the festival. It is an expression of coexistence in Acre, said Ophir Pinez-Paz, who heads the Knesset's Internal Affairs Committee. Speaking on army radio, he insisted the festival should be held despite the events or maybe because of them.On Thursday, ultra-nationalist MP Arieh Eldad denounced what he called Arab pogroms. One should not be surprised if Jews take up arms to defend themselves while the police do nothing to protect them, Eldad said. Arab MP Mohammed Barakeh blamed Jewish fascist gangs, which he said operate against the city's Arab population with complicity from the police.About one third of Acre's population of almost 50,000 are Arabs. The Haaretz daily meanwhile said several ambulances were pelted with stones to protest their operating on a holiday. An ailing 76-year-old told the daily about 50 Jewish religious students hurled stones from a bridge at the vehicle transporting him to a Haifa hospital.

Palestinians raid Hamas bomb factory in Hebron Fri Oct 10, 7:28 PM ET

HEBRON, West Bank (Reuters) - Palestinian President Mahmoud Abbas's security forces raided a Hamas bomb factory and arrested 11 members of the rival Islamist faction in the West Bank city of Hebron on Friday, a senior police officer said. The raid was part of a law-and-order drive pursued by Abbas in the West Bank since he broke with Hamas over its seizure of the Gaza Strip last year and revived peacemaking with Israel.Ramadan Awad, chief of the Palestinian Authority police in Hebron, said more than 100 kg (220 lbs) of explosives were seized along with ammunition and homemade firearms.The factory was preparing bombs which would have been used against us and against the will of the Palestinians, he told Reuters.A Hamas official in Hebron said the targeted building had no links to the Islamic faction .Abbas has also deployed Palestinian security forces in other major West Bank cities like Nablus and Jenin.(Reporting by Haitham al-Tamimi, Writing by Dan Williams; Editing by Charles Dick)

Inspectors eye Russian help for Iranian nuclear experiments: NYT Fri Oct 10, 1:48 PM ET

NEW YORK (AFP) - International inspectors are looking into whether a Russian scientist helped Iran carry out experiments on how to detonate a nuclear weapon, The New York Times reported Friday. Quoting unnamed US and European officials, the report said inspectors at the International Atomic Energy Agency are seeking information from the scientist, who they believe acted on his own as an adviser on experiments described in a lengthy document obtained by the agency.The officials ... said that the document appeared authentic ... but they made it clear that they did not think the scientist was working on behalf of the Russian government, the report added.Still, it is the first time that the nuclear agency has suggested that Iran may have received help from a foreign weapons scientist in developing nuclear arms.

Six powers trying to scale back Iran's nuclear ambitions will consult soon via telephone about the next steps to take at the United Nations, a State Department official said Wednesday.Top State Department and foreign ministry officials from the United States, Britain, China, France, Germany and Russia will debate further UN Security Council action to halt Iran's sensitive nuclear work, the official said.The West and Israel have accused Iran of using its nuclear program as a cover to build nuclear arms. But Tehran insists its program is strictly peaceful and solely aimed at generating electricity.

Long road ahead to resolve Georgia-Russia crisis: Kouchner by Claire Snegaroff Fri Oct 10, 1:33 PM ET

GORI, Georgia (AFP) - French Foreign Minister Bernard Kouchner said Friday that a long road lay ahead to resolve issues remaining from August's Georgia-Russia war, even after Russian troops withdrew from buffer zones around Georgia's rebel regions.

On a visit to Georgia to check first-hand whether Russia was complying with an EU-brokered ceasefire, Kouchner said Russia had fulfilled its obligation to withdraw from buffer zones around South Ossetia and Abkhazia by Friday.The Russians needed to have left the adjacent zones, they have, he said, referring to the buffer zones.But he also noted that Russian forces had not yet withdrawn fully to positions held before the war.Negotiations will begin in five days in Geneva. Nothing is perfect, it's a long road, step by step, he said. For the moment it seems to be relatively satisfying.Under an agreement brokered by the European Union in September, Russia had until Friday to withdraw from Georgian territory outside of South Ossetia and Abkhazia, the so-called buffer zones.But the initial ceasefire agreement that ended the war in August called for Russian soldiers to withdraw to positions held before the conflict.Russian forces remained Friday in at least two positions they did not hold prior to the conflict: the Akhalgori district of South Ossetia and the Kodori Gorge in Abkhazia. Both areas were under Georgian control before August.We had said the adjacent zones first and the adjacent zones have been emptied, Kouchner said. It's not the same step.He added that Akhalgori is a problem we are aware of and we will obviously begin discussing it in Geneva, referring to international talks on the crisis due to take place on October 15.After talks with Kouchner, President Mikheil Saakashvili said Georgia would continue to insist that Russian forces leave the country entirely.The Russians must withdraw from the whole of Georgia. We will never tolerate the occupation of Georgia, Saakashvili told reporters in the Black Sea city of Batumi.Saakashvili also thanked France and the EU for its role in the crisis, saying: The Georgian people for the first time in their history felt they were not alone in the face of aggression.In a statement released in Brussels, EU foreign policy chief Javier Solana confirmed that Russian forces have completed their planned withdrawal from the buffer zones.

Solana said he hoped the pullout would allow internally displaced people to return to their homes and contribute to the normalisation of living conditions in these areas.Russian President Dmitry Medvedev told reporters in Kyrgyzstan that Russia was fully complying with the ceasefire.Everything that depended on us we've done. All the obligations we undertook... we have fulfilled, he said.But Georgia's Foreign Minister Eka Tkeshelashvili said Friday Russia had not fully respected the terms of the ceasefire and warned against a return to normal relations with Moscow. After accompanying EU monitors on patrol near South Ossetia, Kouchner spoke with villagers returning to the area following the Russian withdrawal and later visited a tent camp in the city of Gori for Georgians who had fled their homes during the conflict. This is always very sad to see some houses destroyed, and the people coming back and discovering their belongings in such a desperate state, he said. The French foreign minister's visit came amid EU divisions over whether Russia has fulfilled its promise under the ceasefire to pull back from positions in Georgia after the August war. Diplomats say some countries including the Baltic nations, Poland and Sweden are insisting Russia must fully withdraw to positions held before the war and reduce troops in South Ossetia and Abkhazia to pre-conflict levels. But for France and many other member states, the Russian withdrawal from buffer zones adjacent to the rebel regions was the only condition to be fulfilled, diplomats say. More than 3,500 Russian peacekeepers were deployed in the two regions prior to the conflict and Moscow now intends to keep more than 7,600 troops in South Ossetia and Abkhazia, which Moscow recognised as independent states in August. Russian troops and tanks surged into Georgia on August 8 to beat back a Georgian offensive to wrest control of South Ossetia from separatists.

HOARDING OF GOLD AND SILVER

DOCTOR DOCTORIAN FROM ANGEL OF GOD
then the angel said, Financial crisis will come to Asia. I will shake the world.

JAMES 5:1-3
1 Go to now, ye rich men, weep and howl for your miseries that shall come upon you.
2 Your riches are corrupted, and your garments are motheaten.
3 Your gold and silver is cankered; and the rust of them shall be a witness against you, and shall eat your flesh as it were fire. Ye have heaped treasure together for the last days.

REVELATION 18:10,17,19
10 Standing afar off for the fear of her torment, saying, Alas, alas that great city Babylon, that mighty city! for in one hour is thy judgment come.
17 For in one hour so great riches is come to nought. And every shipmaster, and all the company in ships, and sailors, and as many as trade by sea, stood afar off,
19 And they cast dust on their heads, and cried, weeping and wailing, saying, Alas, alas that great city, wherein were made rich all that had ships in the sea by reason of her costliness! for in one hour is she made desolate.

EZEKIEL 7:19
19 They shall cast their silver in the streets, and their gold shall be removed: their silver and their gold shall not be able to deliver them in the day of the wrath of the LORD: they shall not satisfy their souls, neither fill their bowels: because it is the stumblingblock of their iniquity.

REVELATION 13:16-18
16 And he(FALSE POPE) causeth all, both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads:(CHIP IMPLANT)
17 And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name.
18 Here is wisdom. Let him that hath understanding count the number of the beast: for it is the number of a man; and his number is Six hundred threescore and six.(6-6-6) A NUMBER SYSTEM

TSE drops 40% in the last 4 months.
DOW down 40% from record close oct 9,2007
DOW down 35% from its high this yearon may 2,2008.
DOW drops 18% this week,worst in 112 year history.
S&P drops 18% this week.
S&P worst weekly drop since 1933.
NASDAQ drops 15% this week.
Stocks lose $2.4 trillion dollars this week.

G-7 Commit to All Necessary Steps' to Stem Global Meltdown By Simon Kennedy

Oct. 11 (Bloomberg) -- Group of Seven finance chiefs, meeting after stocks plunged and as a global recession looms, vowed to prevent the failure of vital banks while failing to unveil new initiatives for thawing credit markets. The current situation calls for urgent and exceptional action, the finance ministers and central bankers said in a statement after talks in Washington yesterday. They pledged to take all necessary steps to unfreeze credit and money markets without detailing how that would be accomplished. Signaling they would intervene to avoid a repeat of last month's collapse of Lehman Brothers Holdings Inc., the officials promised to ensure major banks have access to cash and are able to tap public funds for capital. By refraining from specific fresh measures such as embracing a U.K. plan to guarantee loans between banks, they still run a risk of disappointing investors. They've seen what Lehman did and the repercussions, said Jeff Pantages, chief investment officer at Alaska Permanent Capital Management in Anchorage, which oversees $2 billion. If you're a bondholder, you've got to feel better. If you're a shareholder, you're not so sure.Lehman's downfall precipitated the latest chapter of the 14-month crisis, causing banks to stop lending to each other out of concern they may not get their funds back. The G-7's willingness to now back systematically important financial institutions may provide some relief for Morgan Stanley, whose stocks and bonds dropped this week on concerns for its health.

Bank Discussions

U.S. Treasury Secretary Henry Paulson said no bank was singled out in the discussions yesterday. The policy makers from the U.S., Japan, Germany, U.K., France, Canada and Italy convened after stock indexes this month plunged more than 20percent from Japan to Europe to North America. The G-7 nations were under pressure to roll out new policies and adopt a united front to quell the panic in markets after their previous steps failed to do so. Instead, they outlined principles for all nations to follow. Measures taken should protect taxpayers and avoid potentially damaging effects on other countries, the group said. In the past month, European countries have taken unilateral actions to increase bank-deposit guarantees, spurring concern that savers would drain cash from nations with less protection.

Paulson said it would be naive to think that different nations in different circumstances could come up with the same policy paths.

Emergency Actions

In the past two weeks, global central banks executed emergency interest-rate cuts and pumped more cash into markets, the Federal Reserve said it would buy commercial paper, European governments bailed out banks and the U.K. and U.S. said they would start taking equity stakes in financial companies. Money markets remain gridlocked even so, with the three- month London interbank offered rate climbing to 4.82 percent yesterday, a record premium over the Fed's benchmark rate. The seizure spurred British policy makers to propose a program to backstop loans between banks.

G-7 officials shied away from the U.K. idea, which would either turn central banks into clearing houses for banks' loans or have governments back the obligations. The jump in borrowing costs and restricted access to credit prompted Merrill Lynch & Co. to predict the G-7 economies next year will be the weakest since 1982.

Stock Slump

U.S. stocks fell for an eighth straight day yesterday, with the Dow Jones Industrial Average capping its worst week since 1914. The MSCI World Index of equities in 23 developed countries slid 20 percent this week, the most since records began in 1970.

Policy makers expressed confidence that investors will ultimately recognize the scale of actions under way, including a new U.S. plan to buy stocks in a broad array of financial companies. We have taken a lot of actions, European Central Bank President Jean-Claude Trichet said. My experience of markets is that it always takes a little time to capture the elements, of the decisions taken, he said. Paulson signaled his top priority is getting his plan to buy financial stocks running as soon as he can. This is a plan that I'm quite confident will work, he said. The Treasury chief also said ``we have more to do in the liquidity area.The American plan follows U.K. Prime Minister Gordon Brown's 50 billion pound ($87 billion) program that will partly nationalize at least eight lenders.

Canadian Plan

Canada's government yesterday moved to shore up its banks by saying it will buy as much as C$25 billion ($21.6 billion) in mortgages from them. German Finance Minister Peer Steinbrueck and Bundesbank President Axel Weber said they're working on a package of measures to rescue banks that'll be revealed before markets open next week. The situation in financial markets is demanding unusual and far-reaching decisions from all policy makers, Weber told reporters. There is no alternative to these measures because banks have come under strong pressure.While the joint statement made no mention of currencies, Trichet said the group viewed excess volatility in exchange rates as detrimental and urged China to allow faster gains in the yuan. Highlighting the stakes facing the world economy, further talks will be held this weekend. The G-7 officials will meet today with President George W. Bush and gather with counterparts from the Group of 20, which includes emerging markets.

European Summit

Trichet will head to Paris for a summit of European leaders tomorrow that French Finance Minister Christine Lagarde said will seek to go beyond the G-7's agreements.

Rifts within the G-7 were exposed by an unprecedented public split in which Italian Finance Minister Giulio Tremonti rejected a draft statement yesterday for being too weak. The ultimate text that won his blessing was shorter than the original and aimed at wielding a strong psychological impact, Lagarde said. Tremonti after the meeting described the Basel II accord that regulates accounting for banks as dead and said he will propose a shake-up of global financial architecture today. The G-7 promised to implement high-quality accounting standards.Earlier, Italian President Silvio Berlusconi sowed confusion by saying governments may close financial markets, only to reverse himself an hour later. To contact the reporter on this story: Simon Kennedy in Washington at skennedy4@bloomberg.net

US to buy stake in banks; first since Depression By JEANNINE AVERSA, AP Economics Writer OCT 11,08

WASHINGTON - The government will buy an ownership stake in a broad array of American banks for the first time since the Great Depression, Treasury Secretary Henry Paulson said late Friday, announcing the historic step after stock markets jolted still lower around the world despite all efforts to slow the selling stampede.

Separately, the U.S. and the globe's other industrial powers pledged to take decisive action and use all available tools to prevent a worldwide economic catastrophe.This is a period like none of us has ever seen before, declared Paulson at a rare Friday night news conference. He said the government program to purchase stock in private U.S. financial firms will be open to a broad array of institutions, including banks, in an effort to help them raise desperately needed money.The administration received the authority to take such direct action in the $700 billion economic rescue bill that Congress passed and President Bush signed last week.

Earlier Friday, stock prices hurtled downward in the United States, Europe and Asia, even as President Bush tried to reassure Americans and the world that the U.S. and other governments were aggressively addressing what has become a near panic.A sign of how bad things have gotten: A drop of 128 points in the Dow Jones industrials was greeted with sighs of relief after the index had plummeted much further on previous days. The week ended as the Dow's worst ever, with the index down an incredible 40.3 percent since its record close almost exactly one year earlier, on Oct. 9. 2007.

Investors suffered a paper loss of $2.4 trillion for the week, as measured by the Dow Jones Wilshire 5000 index, and for the past year the losses have totaled $8.4 trillion.It was even worse overseas on Friday. Britain's FTSE index ended below the 4,000 level for the first time in five years; Germany's DAX fell 7 percent and France's CAC-40 finished down 7.7 percent. Japan's benchmark Nikkei 225 index fell 9.6 percent, also hitting a five-year low. For the week, the Nikkei lost nearly a quarter of its value. Russia's market never even opened.Paulson announced the administration's new effort to prop up banks at the conclusion of discussions among finance officials of the Group of Seven major industrialized countries. That group endorsed the outlines of a sweeping program to combat the worst global credit crisis in decades.Earlier this week, Britain had moved to pour cash into its troubled banks in exchange for stakes in them — a partial nationalization.Paulson said the U.S. program would be designed to complement banks' own efforts to raise fresh capital from private sources. The government's stock purchases will be of nonvoting shares so it will not have power to run the companies.The purchase of stakes in companies would be in addition to the main thrust of the $700 billion rescue effort, which is to buy bad mortgages and other distressed assets from financial institutions. The aim is to unthaw frozen credit, get banks to resume more normal lending operations and stave off severe problems for businesses and everyday Americans alike.It would mark the first time the government has taken equity ownership in banks in this manner since a similar program was employed during the Depression.In 1989, the government created the Resolution Trust Corp. to deal with the aftermath of the savings and loan crisis. It disposed of the assets of failed savings and loans.

Paulson and Federal Reserve Chairman Ben Bernanke met with their counterparts from the world's six other richest countries late in the day as the rout of financial markets sped ahead despite earlier dramatic rescue efforts in the U.S. and abroad.

In a statement at the end of that meeting, the G7 officials vowed to protect major banks and to prevent their failure. They also committed to working to get credit flowing more freely again, to support the efforts of banks to raise money from both public and private sources, to bolster deposit insurance and to revive the battered mortgage financing market.They did not provide specifics beyond that five-point framework.At the White House earlier in the day, Bush said, We're in this together and we'll come through this together. He added, Anxiety can feed anxiety, and that can make it hard to see all that's being done to solve the problem.He made it clear the United States must work with other countries to battle the worst financial crisis that has jolted the world economy in more than a half-century. We've seen that problems in the financial system are not isolated to the United States, he said. So we're working closely with partners around the world to ensure that our actions are coordinated and effective.The Dow dropped a little over 100 points while he was speaking. Fear has tightened its grip on investors worldwide even as the United States and other countries have taken a series of radical actions including an unprecedented, coordinated interest rate cuts by the Federal Reserve and other major central banks. Besides the United States, the other members of the G7 meeting in Washington are Japan, Germany, Britain, France, Italy and Canada. Finance officials also planned to meet with Bush Saturday at the White House. We are in a development where the downward spiral is picking up speed, said Germany's Finance Minister Peer Steinbrueck, who wanted to see an orchestrated response among the G7.

So did French Finance Minister Christine Lagarde, who said a coordinated, synchronized and rightly timed approach was needed. An even larger group of nations — called the G20 — will meet with Paulson on Saturday evening. How the world's finance officials and central bank presidents can better contain the spreading financial crisis also will dominate discussions at the weekend meetings of the 185-nation International Monetary Fund and the World Bank in Washington. The British, who recently announced a plan to guarantee billions of dollar worth of debt held by major banks, have been pitching that idea to the rest of the G7 members. The idea behind all these ideas — as well as bold steps previously announced in recent weeks —is to get credit flowing more freely again. In the United States, hard-pressed banks and investment firms are drawing emergency loans from the Federal Reserve because they can't get money elsewhere. Skittish investors have cut them off, moving their money into safer Treasury securities. Financial institutions are hoarding whatever cash they have, rather than lending it to each other or customers. The lending lockup — which is making it harder and more expensive for businesses and ordinary people to borrow money — is threatening to push the United States and the world economy as a whole into a deep and painful recession. In Europe, governments have moved to protect nervous bank depositors. Germany pledged to guarantee all private bank savings and CDs in the country, and Iceland and Denmark followed suit. Ireland went even further by also guaranteeing Irish banks' debts. The United States will temporarily boost deposit insurance from $100,000 to $250,000 in cases where its banks or savings and loans fail. The Fed, meanwhile, has repeatedly tapped its Depression-era authority to be a lender of last resort, not only to financial institutions but also to other types of companies. Earlier this week, the Fed said it would buy massive amounts of companies' debts, in another unprecedented effort to break through the credit clog. Associated Press writers Harry Dunphy, Desmond Butler, Martin Crutsinger and Deb Reichmann contributed to this report.

G7 undermines price discovery October 10, 2008, 10:51 PM by NP Editor
Terence Corcoran, markets, bailouts,The purpose of markets is to allow people to determine prices ,By Terence Corcoran

Speculation raged throughout the day yesterday as to whether the G7 cabal of finance ministers would reach a consensus on a coordinated mass effort to end the global financial crisis. As the day progressed, and the meeting got underway in Washington, many of the worst ideas appeared to have fallen by the wayside. That doesn’t mean the financial markets of individual countries won’t continue to struggle under the burden of unprecedented and troubling interventions, including U.S. government purchase of bank equity.The list keeps growing. Governments are pushing to invest directly in banks, put all deposits under unlimited insurance guarantees, pass laws to allow treasury departments to buy mortgages and related instruments, even lending between banks could come with government guarantees. What all these initiatives have in common is their ability to undermine and prevent market forces from operating. The purpose of markets — the only purpose of markets, some might say — is to allow people to determine prices. Without trades in an open market, there can be no accurate determination of value. And without prices, nobody can know what assets are worth and what to pay for them. And without that knowledge, nothing can happen.In the current financial crisis, the only functioning markets appears to be the stock markets, where traders are doing their best to divine price levels in a world distorted, even frozen, by increasing government activity. Even the Canadian banking system, allegedly rock solid, came under pressure when the government brought new uncertainty to the market.

In a move yesterday, Ottawa announced a so-called relief plan to buy up to $25-billion in insured mortgage pools from Canadian banks. Finance Minister Jim Flaherty said the plan would help Canadian banks raise long-term funds for consumers, home buyers and businesses. Really? Looks more like a bailout of a banking system that a week ago didn’t need one. The plan appears to send $25-billion worth of bank mortgage paper, already guaranteed by the government’s Central Mortgage and Housing Corp., directly into hands of government. Is this Canada’s quota of home-grown subprime-like mortgage loans? When news of the package started to leak out Thursday, Canadian bank shares began a plunge that continued yesterday. Their status would not have been helped by former U.S. Federal Reserve Chairman Paul Volcker, who said in an interview that the governments of all G7 countries now own up to the fact that their banks are going to need support.No wonder stock markets are gyrating wildly. How can you value shares, especially bank shares, when banks can’t do business, when they can’t accurately value the assets in their own portfolios let alone another bank’s assets, when governments are playing with interest rates, and now when some banks themselves join in seeking government aid.Instead of allowing banks to value and trade in mortgage assets on the open market, setting accurate prices, the system is likely to remain frozen — unless governments plan to buy up all under-performing assets. The financial system isn’t frozen, the price discovery system is frozen.
A small step in allowing more accurate valuation of mortgage and other assets is expected to come this weekend from the U.S. Financial Accounting Standards Board. The board will provide new guidance that will allow banks and other financial institutions to modify rigid mark-to-market rules that forced them to write off large chunks of assets that may actually have value. The large write offs forced banks to take hits to their capital, distorting their balance sheets, creating credit squeezes and punishing share values.The more governments move in on the banks and the financial markets, with blanket insurance guarantees and nationalizations, the less opportunity there is for real price discovery. Such moves also increase investor and consumer uncertainty. The Financial Times reported yesterday that Germans were stunned to learn of the government’s plan for total insurance coverage on all deposits. If they are doing this, then the situation must really be desperate, said one German consumer.

There are small signs that some good sense may yet overtake the G7 regulatory rush. In the U.K., where the Labour government announced plans to buy up equity positions in banks, some banks are resisting the offer. They would rather sell shares to private non-government investors than expose themselves to government meddling and the controls that would inevitably accompany any government investment.Without a return to market pricing of assets, especially U.S. mortgage assets, but also all forms of financial instruments — from derivatives to bank loans to corporate loans — the financial markets will continue to be paralyzed. The only functioning market right now is the stock market. And even those markets looked to be at risk yesterday when Italy’s president said he thought equity markets should be closed. That idea died, avoiding a total system lock-up. At least one attempt to determine prices and values is still functioning, as best it can. Financial Post,Terence Corcoran is Editor of the Financial Post.

G7 vows action to douse global firestorm,Firestorm sweeps world markets
Australia best placed, says Swan Lift the savings surety: Turnbull
October 11, 2008 - 2:08PM

Group of Seven finance chiefs today unveiled a five-point plan to fight the global economic firestorm and restore confidence in the financial system by shoring up struggling banks.The G7 agrees today that the current situation calls for urgent and exceptional action, the US Treasury said in a statement on behalf of G7 nations.We commit to continue working together to stabilise financial markets and restore the flow of credit, to support global economic growth, it added after finance ministers and central bank chiefs from the United States, Germany, Japan, France, Britain, Italy and Canada met in Washington.Treasury secretary Henry Paulson said it was an aggressive plan to address the turmoil in global financial markets and the stresses on our financial institutions.Washington would start moving as soon as we can to inject capital into troubled banks, he told journalists. We're going to do it as soon as we can do it and do it effectively.And he added: We are in close coordination and communication with Japan and China and other investors around the world.Under the G7 plan, the economic powers would seek to ensure that banks ``can raise capital from public as well as private sources, in sufficient amounts to re-establish confidence and permit them to continue lending to households and businesses.The seven nations also committed to taking decisive measures to stop further bank collapses and unfreeze credit lines to pump more liquidity into the market.The move came after global stock markets went into a freefall today as panicked investors found no place to hide, even though Wall Street managed to stem the losses in a stomach-churning session of ups and downs.Some markets plunged 10 per cent in the worst performance since the 1987 stock crash as part of a global meltdown that began with Tokyo's 9.6 per cent nosedive.If you could measure the overall confidence level of investors, it would likely be so low that it would frighten the rest of the longs out of the market, said Kevin Giddis at Morgan Keegan.

This is the scary part of the movie where the slasher is hiding in the shadows around the corner waiting to pounce.On Wall Street, the Dow Jones Industrial Average saw early losses of as much as 700 points, and two sudden spurts into positive territory before closing down 128.00 points (1.49 per cent) at 8,451.19.The market saw a stomach-turning session at the end of a vicious week of selling that sent the Dow and S&P indexes tumbling 18 per cent.US President George W Bush, who is due to meet tomorrow with G7 ministers at the White House, insisted the raging firestorm would be put out.As stock exchanges from Tokyo to London to New York were sucked deeper into the turmoil, Bush blamed uncertainty and fear for much of the global financial meltdown.Anxiety can feed anxiety and that can make it hard to see all that is being done, he said in a White House statement. We can solve this crisis, and we will.London's FTSE 100 index skirted close to a 10-per cent loss before a slight pullback. The Paris CAC 40 dived 10.57 per cent and there were similar losses in Frankfurt.Japan's Nikkei-225 index closed down 9.62 per cent, Hong Kong lost 7.2 per cent and Singapore 7.34. Tokyo briefly halted some trading in futures and options as the Nikkei saw its biggest fall since the crash of October 1987.A fresh injection $US45.5 billion ($A66.57 billion) into Japanese money markets failed to stop the collapse as the crisis claimed its first Japanese victim, with Yamato Life Insurance filing for bankruptcy protection.Nowhere was immune from the rout. South America's largest stock market in Sao Paulo was suspended after the market slid more than 10 per cent. Trading in Moscow was also halted.And in Mexico, the central bank had to pump billions of dollars into the market to help the plummeting peso which reached record lows.European heads of state and government meanwhile agreed to hold a financial crisis summit in Paris on Sunday to define a joint action plan for the eurozone and the European Central Bank, the French presidency said.Despite repeated pledges to coordinate their action, EU governments have gone their own ways so far in tackling the crisis at the national level.AFP

G7 finance chiefs pledge action to stem bank crisis
Updated: Fri Oct. 10 2008 17:07:59 CTV.ca News Staff

The world's top finance officials have pledged to take all actions needed to stem the worst global financial crisis since the Great Depression. The so-called Group of Seven countries released a five-point plan that they say will unfreeze the credit crisis that has hit Wall Street and worldwide markets. The G7 said they would take decisive action and use all available tools to protect major financial institutions from failure. They also committed to get credit flowing again, support banks' efforts to raise money, bolster deposit insurance and revive the mortgage financing market. They did not provide specifics besides the sweeping five-point plan. The actions should be taken in ways that protect taxpayers and avoid potentially damaging effects on the countries, the finance officials said in a statement. U.S. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke met with their counterparts from the G7, including Canada's Finance Minister Jim Flaherty, in Washington Friday. Paulson made another major announcement Friday evening, saying that the U.S. will buy an ownership stake in a number of American banks -- for the first time since the Great Depression. This is a period like none of us has ever seen before, Paulson said in a rare Friday night news conference. He said the move will help banks raise desperately needed money. Besides the United States and Canada, the G7 countries are Japan, Germany, Britain, France, and Italy.

Wild week for markets

A turbulent week at the markets came to a wild close Friday with the loonie posting a record one-day decline and the Toronto stock exchange briefly dropping below the 9,000 level for the first time in three years. The main S&P/TSX composite index closed at 9,065.2, down 534.98 points on the day. But at one point on Friday it was down nearly 750 points. The TSX index lost 1,738 points or 16 per cent of its value this week. The Canadian dollar fell nearly five cents against the U.S. dollar to a low of 82.41 cents US Friday, but rebounded at close to 84.69 cents US. Since November 2007, when the dollar hit an all-time peak of 110.3 cents US, the loonie has fallen more than a quarter. The Bank of Canada's exchange rate website says the dollar hasn't fallen more than three cents in one day since June 21, 1961, when it lost 3.38 cents US. It hasn't been below 83 cents since Feb. 21, 2003. The TSX index was particularly hit hard by energy stocks, which have lost value as oil prices continue to retreat. The November crude contract on the New York Mercantile Exchange closed at US$77.70 down $8.89 a barrel Friday. New York's Dow Jones industrials closed down 128 points to 8,451.19, following up on a 679-point retreat yesterday.

The Nasdaq composite index gained 4.39 points to close at 1,649.51 while the S&P 500 index lost 10.70 points to close at 899.22. Momentum is running against the market and you don't want to get hit by a train, Jack Ablin, chief investment officer at Harris Private Bank in New York, told The Associated Press. This is now about market psychology. There's extreme fear and panic out there.Overseas, Asian and European markets slumped sharply on Friday as investors there also continued to sell hard.

London's FTSE 100 index slumped 5.24 per cent while the German DAX was down 6.9 per cent and the Paris CAC-40 fell 9.8 per cent. In Japan, the benchmark Nikkei 225 index in Japan lost 881.06 points, or 9.6 per cent, to 8,276.43 -- the lowest closing level since May 2003. Hong Kong's Hang Seng index fell more than 8 per cent while the Kospi index in South Korea lost 7.4 per cent. Shanghai's index fell 4.1 per cent and Singapore's Straits Times index lost 7 per cent. In Australia, observers called the slump Black Friday after the key S&P/ASX200 dropped 8.34 per cent, or 360.2 points -- its sharpest one-day percentage loss ever. The freefall was largely in response to the massive sell-off on Wall Street on Thursday and rising global economic uncertainty. Selling is unstoppable in New York and Tokyo, said Yutaka Miura, senior strategist at Shinko Securities Co. Ltd. in Tokyo told The Associated Press.

Investors were gripped by fear.

Also Friday, Flaherty announced that the government will buy $25 billion in mortgage-backed securities from Canadian banks in a bid to maintain the availability of credit. The banks responded by cutting their prime rates. With files from The Associated Press.

US President George W Bush, who is due to meet tomorrow with G7 ministers at the White House, insisted the raging firestorm would be put out.As stock exchanges from Tokyo to London to New York were sucked deeper into the turmoil, Bush blamed uncertainty and fear for much of the global financial meltdown.Anxiety can feed anxiety and that can make it hard to see all that is being done, he said in a White House statement. We can solve this crisis, and we will.London's FTSE 100 index skirted close to a 10-per cent loss before a slight pullback. The Paris CAC 40 dived 10.57 per cent and there were similar losses in Frankfurt.Japan's Nikkei-225 index closed down 9.62 per cent, Hong Kong lost 7.2 per cent and Singapore 7.34. Tokyo briefly halted some trading in futures and options as the Nikkei saw its biggest fall since the crash of October 1987.A fresh injection $US45.5 billion ($A66.57 billion) into Japanese money markets failed to stop the collapse as the crisis claimed its first Japanese victim, with Yamato Life Insurance filing for bankruptcy protection.Nowhere was immune from the rout. South America's largest stock market in Sao Paulo was suspended after the market slid more than 10 per cent. Trading in Moscow was also halted.And in Mexico, the central bank had to pump billions of dollars into the market to help the plummeting peso which reached record lows.

European heads of state and government meanwhile agreed to hold a financial crisis summit in Paris on Sunday to define a joint action plan for the eurozone and the European Central Bank, the French presidency said.Despite repeated pledges to coordinate their action, EU governments have gone their own ways so far in tackling the crisis at the national level.AFP

MONEYNETDAILY China stiffing America for $100 billion in debt Yet U.S. taxpayers helping Beijing as part of trillion-$ credit bailout October 10, 2008
10:15 pm Eastern By Bob Unruh 2008 WorldNetDaily

While Chinese companies are in line to benefit directly from U.S. taxpayers' $700 billion-plus bailout of Wall Street, Fannie Mae, Freddie Mac and other financial institutions, Beijing is stiffing the U.S. for $100 billion or more in unpaid debt.

The status of the Chinese economy, including its repudiated debt, has prompted one analyst to warn of an ominous threat involving China's finances and suggest the possibility of a dramatic reversal for the so-called Chinese Miracle.One of the greatest problems facing China is the government's failure to acknowledge and effectively address the true extent of state institutions' bad debt, Kevin O'Brien writes in an article titled, Reassessing China's Sovereign Risk: Emerging Global and Domestic Trends Threaten the 'Chinese Miracle.O'Brien's report was published at a website for the Global Association of Risk Professionals, a not-for-profit independent trade association of risk management practitioners around the world. It has 77,000 members from fields such as banking, investment management and academics.

One problem that should be addressed, he writes, is the $260 billion in sovereign debt owed U.S. and other investors which China has said it simply won't repay.The repayment obligation was inherited by the People's Republic of China, when the communists took control in 1949. The successor government doctrine of settled international law affirms continuity of obligations among international recognized successive governments, O'Brien said.The PRC is the internationally recognized successor government … which contracted the credit sovereign debt … and which had a loan agreement that states that such debt is intended to be a binding engagement upon the Republic of China and its successors.The bonds, however, were excluded from a 1979 settlement of Chinese debts and in 1987, China even concluded a discriminatory settlement accord with bondholders in Great Britain – an agreement that excluded from settlement any bonds held by non-UK citizens.Then in 2006, the Chinese Ministry of Finance issued an official communiqué addressed to the Embassy of the United States of America in China, in which the Chinese government formally repudiated China's defaulted full faith and credit sovereign debt and announced that it would not repay any debt held by American citizens, O'Brien said.The repudiation still stands, even though the China Economic Review confirmed that major Chinese banks own $8 billion in Fannie Mae and Freddie Mac securities that are the targets of bailout provisions.Bank of China said last month it owned $7.5 billion in Fannie and Freddie bonds, the report continued. The bank also held $5.2 billion in mortgage-backed securities guaranteed by the two agencies.Those owners will be among the beneficiaries of the overall bailout plan assembled by the government and funded by taxpayers to rescue bad debt created by an agenda of loaning money to subprime recipients who may not have had the wherewithal to repay the loans.

Recipients of the U.S. taxpayers' generosity also may include various private Chinese interests with investments in American real estate and mortgage.As recently as three weeks ago, China Investment Corp. was in active discussions to buy into U.S. financial institutions, including Morgan Stanley.All the while Congress has been aware of the Chinese default but unwilling to mandate action.Elton Gallegly, a California Republican in Congress, called it the China debt syndrome.After Saddam Hussein's government was replaced in Iraq, China demanded that the new government pay off the debt Saddam's regime ran up against China. China prevailed and is getting 100 percent of the more than $10 billion Iraq owes it, he said in a recent commentary.China, however, refuses to recognize the debt its current government inherited when the communists took control in 1949. That debt includes about $260 billion on bonds issued by the former Republic of China. Of that, more than 300 American citizens are owed nearly $100 billion from bonds on which the People's Republic of China has defaulted, the congressman wrote.It's time China owned up to its international obligations. Pressure is the only thing China understands. And pressure works. Americans weren't the only ones owed billions when the communists seized control. British citizens were among the bondholders communist China had been ignoring. That lasted until 1987, when Great Britain enacted a law denying Chinese access to British capital markets and China responded by negotiating a settlement to pay off the bonds, he wrote.Now, he said, China is in negotiations with France on defaulted bonds but continues to ignore the United States.He said worse than the actual monetary loss is the message that suggests China does not have to play by the rules when it competes in the global economy. This helps explain Beijing's refusal to abide by trade agreements, the manipulation of its currency, its underwriting of the genocidal regime in Sudan and its financial relationship with the terrorist-sponsoring government in Iran.To that list we can add China’s refusal to crack down on the widespread theft of intellectual property. The piracy of U.S. movies, books, music and other products is costing Americans billions of dollars each year, he said.

China, meanwhile, is boasting of its economy growth and influence. On a Chinese-promoted website today the headlines bragged: China ranks among the world’s top 30 economies,China Investment Corp to start investing in Japan stocks and China's ship industry strives for No. 1 spot.A resolution similar to Gallegly's also has been introduced in the Senate. The plan by Sen. James Inhofe, R-Okla., targets China's attempt to conceal its defaulted government debt from investors.The Senate measure labels China's present investment-grade credit rating as artificial and in testimony before the Senate Banking Committee, SEC Chairman Christopher Cox acknowledged that wrongful actions by a credit rating agency may subject the agency to revocation of its SEC registration, an announcement said.At Washington Watch, the criticism focused on the U.S. credit rating agencies that have allowed the situation to remain under the radar.In China's instance, the three largest rating agencies (Standard & Poor's, Moody's and Fitch) are accused of intentionally violating their published criteria and metrics, said the report. Sovereign Advisers, a risk metrics firm assisting the defaulted creditors of the Chinese government, has performed comprehensive research on this matter and has provided the U.S. Congress and the Securities and Exchange Commission with evidence suggesting that the actions of Standard & Poor's and Moody's were intentionally designed to conceal the Chinese government's debt repudiation and establish an artificial sovereign benchmark in order to increase ratings revenue from expanded securities issuance by Chinese corporations.On the Washington Watch website, several participants in an online discussion expressed concern over the situation.It is about time the PRC was made to pay for their financial indiscretions from the past, said one.The situation is crystal clear, said another. China has an obligation and if it wishes to operate globally it must meet this and any other obligations.If it walks like a duck, quacks like a duck, looks like a duck. China's credibility should be disclosed so investors are aware of the risk. China needs to pay its debts, added another.Gallegly's effort also was to encourage that knowledge among investors.This action will put all investors on notice that China has refused to honor its obligations in contravention of international law, he wrote. It will also encourage China to negotiate in good faith with American bondholders to settle their claims on defaulted bonds.O'Brien called China's actions selective default.He said that's a practice whereby a government selectively defaults on one specific class of full faith and credit soverereign obligations … yet honors repayment to selected creditors of a separate class..China's refusal to honor repayment of its full faith and credit sovereign debt to American bondholders is best characterized by a statement that appeared in a recent news article: When it comes to territory, China claims Tibet and Taiwan based on historical claims predating the current communist government assuming power, but when it comes to debts owed to American citizens, it's a different story, he wrote.

WND reported in 2007 about the influence China wielded over the American dollar because of its investments in financial instruments.WND also has reported extensively on a long list of defective and even dangerous products that have been exported from China to the U.S.

Iceland and UK in diplomatic war over banks
LUCIA KUBOSOVA 10.10.2008 @ 09:22 CET

British Prime Minister Gordon Brown has accused Iceland of illegal action for freezing the accounts of UK private and public depositors in collapsed banks. What happened in Iceland is completely unacceptable. I've been in touch with the Icelandic prime minister. I said this is effectively illegal action that they have taken, Mr Brown told the BBC about Reykjavik's move to nationalise several Icelandic banks while preventing their British customers to access their money.Iceland has been pummelled by the ongoing bank crisis as its bank debts are many times its annual GDP of €14 billion, with fears that the entire nation of 320,000 people could go bankrupt. On Thursday (9 October), the country's government took over the last of three major banks and shut down the stock exchange. Trading in the Icelandic krona has ceased and foreign banks are not willing to take the currency even for lower rates.Reykjavik is supposed to pay out as much as €20,000 in compensation per frozen account at a total cost of €2.7 billion, but London has not received assurance that public authorities in Iceland will meet this commitment.The UK government has promised to protect hundreds of thousands private savers affected by the failed Icelandic banks but it is not clear what will happen to the over €1.1 billion that British public authorities such as councils, the police and fire services have invested in Iceland.This is fundamentally a problem with the Icelandic-registered financial services authority - they have failed not only the people of Iceland, they have failed people in Britain, complained Mr Brown.In a bid to boost pressure on the country's authorities, the British government has itself invoked the Anti-Terrorism Crime and Security Act of 2001 in a bid to freeze the assets of Icelandic companies in the UK - which sparked an angry reaction by Reykjavik.Iceland's prime minister, Geir Haarde, told journalists it was not very pleasant to find out that a terrorist law was being applied against us, adding that he considered it as a completely unfriendly act.

I'm afraid that not many governments would have taken that very kindly, to be put in that category and I told the chancellor that we were not pleased with that, Mr Haarde said.It is expected that Iceland will have to turn to the International Monetary Fund for help and forced to accept strict disciplinary budget measures to restore fiscal and monetary stability.Next Tuesday, Reykjavik is expected to start talks with Russia over an emergency €4 billion Moscow has offered to provide to Reykjavik.