Tuesday, September 30, 2008

Market Meltdown = "Signs of the Times"?

"With the chaos and uncertainty growing around the world almost daily, more people than ever should be preparing for the event that will bring about the climax to human history, and the restoration of all things, in other words, a NEW Heaven, and a NEW Earth: The Second Coming of Christ. The Bible describes how God's plan for a personal relationship with man had a definite beginning (with Adam almost 6000 years ago) and will have a definite end, climaxing in the return of Jesus Christ. God does indeed declare "the end from the beginning". The Bible contains many prophetic scriptures concerning world events, the nation of Israel, and Jesus Christ. Many have been already confirmed by history, while others relate to what the Bible terms "the last days".

Monday, September 29, 2008

A Day To Remember

Leo (July 23 — Aug. 22)

You can resolve to be more sensible about your plans or you can listen to your intuition, trust your imagination and go even further in your wish to follow a dream. It's precarious, delicate and difficult, but the magic of the stars is with you.

TSX in biggest drop in 8 years
Bleak picture

TSX Closing numbers so far in September
The TSX has lost 2,486.18 points since the beginning of September.

Markets tank after Republicans, Democrats say no
September 29, 2008


North American stock markets plummeted today after the U.S. House of Representatives rejected a $700 billion (U.S.) bailout plan for Wall Street while the financial crisis stiffened its stranglehold on global banks.

Canada's benchmark stock index bore the brunt of the losses - erasing more than 800 points or 6.93 per cent - in a stunning freefall that marked its biggest percentage drop in nearly eight years.

The Wall Street bailout bill - defeated by a vote of 228-205 - left White House officials scrambling, while the world's central banks ramped up their efforts to resuscitate the floundering financial system through more massive injections of cash.

Market sentiment wilted right from the opening bell after investors panned Citigroup Inc.'s speedy takeover of Wachovia Corp., the latest in a string of government-arranged marriages to rock America's financial services industry. What's more, the forced rescue of some European banks fuelled fears the credit crisis was deepening despite unprecedented government intervention in several countries.

After the dust settled, Toronto's S&P/TSX composite index lost 840.93 points to 11,285.07. The TSX had fallen by more than 900 points at its session low, capitulating under the weight of spiralling energy and financial shares.

The energy sector lost more than 10 per cent as the price of crude oil sank as the botched bailout bill dimmed prospects for global growth. Crude oil for November delivery fell $10.52 (U.S.) to $96.37 a barrel on the New York Mercantile Exchange.

"The recent sharp decline in commodity prices, as well as the extreme day-to-day volatility, reflects as much the impact of U.S. and global financial market developments as it does actual world supply/demand fundamentals for commodities," observed Patricia Mohr, a commodity market specialist with the Bank of Nova Scotia.

The TSX financial sub-index, meanwhile, was 5.79 per cent lower as investors worried domestic lenders would be caught in the undertow of the cascading financial crisis. Royal Bank of Canada, this country's largest lender, saw its shares lose $3.42 to $47.50 (Canadian).

Stock in Manulife Financial Corp., meanwhile, lost $1.55 to $36.25 after the insurance giant revealed about $600 million in exposure to Wachovia.

CEO Dominic D'Alessandro said Manulife is in an "excellent position" to weather the ongoing tumult. Nonetheless, he cautioned: "I can't tell you at this moment what the impact is or what the prospects are for our $600 million."

This country's financial institutions have so far been relatively sheltered from the winds howling around the global financial community - in part because of their cozy market position and limited exposure to the toxic mortgage-backed securities that have toppled other lenders.

Global banks and securities firms have already taken some $590.8 billion (U.S.) in asset writedowns and credit losses since America's subprime mortgage market imploded last year. At $11.6 billion, the running tally for Canadian banks is a mere fraction of that total.

"They are some of the healthiest banks on the planet," said Andrew Martyn, a portfolio manager at Davis-Rea Ltd. "But remember that banks are leveraged 15 to one on their book, so they can't afford to take on much damage without sinking ..... That's the danger.

"In simple terms, it doesn't matter if you are a good bank or a bad bank, the cost of money and the cost of funding is rising around the world."

On Wall Street, the blue-chip Dow Jones Industrial Average lost 777.68 points to 10,365.45. Investors were digesting news of Citigroup's hastily-arranged deal to buy Wachovia's banking operations. The deal, partially-assisted by the U.S. Federal Deposit Insurance Corp., would see Citigroup absorbing up to $42-billion (U.S.) of losses from Wachovia's $312-billion loan portfolio.

A new research report from American research and advisory services firm TowerGroup predicted that more mergers and restructuring would be in the cards for U.S. banks over the coming months.

The Federal Reserve, meanwhile, announced a $330 billion expansion of arrangements to boost U.S. dollar liquidity throughout the global financial system to combat the credit crisis. The action increases the reciprocal swap lines with global central banks to $620 billion, including $30 billion for the Bank of Canada.

Adding to investor angst was a flurry of news that various European governments were being forced to bail out some of that continent's most-storied lenders. The Belgian, Dutch and Luxembourg governments took a 49 per cent stake in Fortis with an 11.2 billion euro injection.

The German government and a consortium of banks pledged 35 billion euros in credit guarantees to lender Hypo Real Estate and the British government bought up the 50 billion pounds of loans held by Bradford & Bingley. Iceland's government, meanwhile, took a 75 per cent stake in Glitnir.

- With files from Chris Sorensen and the Star's wire services

Sunday, September 28, 2008

Painting your cat says more about you...

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and the writer goes on to say:

"Some of the paint jobs cost $15,000 and had to be repeated every 3 months as the cat's hair grows out. Must be nice to have $60,000 a year just to keep your cat painted!!

And people wonder why cats sometimes attack their owners!! "

And I sa

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10 things to learn this week

10 things to learn this week
Herbert Hoover, 31st President of the United States from 1929 to 1933 boldly predicted that the Great Depression would be over within two months.
September 28, 2008
Toronto Star Staff
  • Amount of time President Herbert Hoover told Americans the Great Depression would last: 60 days. (pbs.org)

  • Number of suicides on Wall Street between Black Tuesday (Oct. 29, 1929) and the end of the year: two. (slate.com)

  • Blame/credit Michaelmas, or the feast of St. Michael (which takes place tomorrow) for the tradition of fall elections. "Great market fairs occurred just before the feast day, and the large crowds these attracted made it convenient to hold elections at this time." (almanac.com)

  • Wednesday is the anniversary of Mensa, whose members score in the top 2 per cent of the general population on a standardized intelligence test. It was founded in Oxford, England, on Oct. 1, 1946. Of the more than 100,000 members, about 600 are in Toronto. (us.mensa.org; mensatoronto.com)

  • Men with "more traditional gender-role attitudes" make an average of about $8,500 more per year than men with "less traditional attitudes," according to a 25-year study of 8,000 individuals. (livescience.com)

  • The word "jeans" appears to have come from a cotton, wool and/or silk blend made in Genoa, Italy. (levistrauss.com)

  • The dye that makes jeans blue is indigo, which traditionally came from Indigofera shrubs but is now mostly synthesized from chemicals in coal tar. (Brain Fuel by Joe Schwarcz)

  • Bell-bottom pants, which were formally adopted by the U.S. navy in the early 1800s and then jettisoned about a decade ago, are thought to have been implemented to make scrubbing the ship's deck easier: the pants could easily be folded up above the knee. (history.navy.mil)

  • Candy bars inspired the snap-off metal blade. Impressed by the way rectangles of chocolate snapped off candy bars distributed by U.S. forces occupying Japan after World War II, Yoshio and Saburo Okada made a metal strip on the breakaway principle in 1956 and founded the Olfa blade company. (olfa.com)

  • The oldest free-speech forum in the world could date to 1755 and a London tavern, where the Ancient Society of Cogers, derived from "Cogito ergo sum" (I think, therefore I am) held meetings that began with a 40-minute talk on the events of the week, after which it was "open to all participants in turn..." (www.torontodebate.org)

Saturday, September 27, 2008

Paul Newman dies at 83

Paul Newman dies at 83
Paul Newman, the legendary actor whose steely blue eyes, good-humored charm and advocacy of worthy causes made him one of the most renowned figures in American arts, has died of cancer at his home in Westport, Connecticut. He was 83. full story

Wednesday, September 24, 2008

Finnish gunman Matti Saari burnt bodies after massacre

The formal identification of the victims of Finland's college massacre could take at least two weeks because their bodies were set on fire after being shot in their exam room, police said today.

This remote town in western Finland is in a state of shock, still trying to understand what had pushed Matti Saari, a 22-year-old trainee chef, into murdering 10 fellow students in the local catering and tourism college yesterday.

Saari had been quizzed by police on Monday over YouTube videos showing him firing his Walther P22 pistol at a woodland shooting range. They had no legal reason to detain him, however, and the officer in charge of the case decided not to suspend his handgun permit.

But a police spokesman said today that Saari would have been held had a more incriminating video in which he made an explicit threat of violence – "You will die next," he declares in English before firing his gun repeatedly (see above) – surfaced earlier.

That video was not posted on YouTube but on a Finnish social networking site, from which it was copied and disseminated via file-sharing sites after the killing started.

"The officer made his decision, he thought there was no reason to take the gun off him," said the spokesman, Mintala Urpo. "The only video we saw was where he was shooting at the range. It was only afterwards that much more information came out."

Mr Urpo refused to say whether the officer in question had been suspended but said that a person believed to have acted as Saari's cameraman was being sought.

In the meantime, this sleepy town, surrounded by lakes and forests, is trying to come to terms with the tragedy. The college where the massacre occurred was sealed off this morning behind police tape and guarded by soldiers from the Finnish army.

It has been closed until Monday but a steady a stream of pupils, dressed mostly in black, were arriving during the day to leave candles and messages for their lost friends.

Heidi Viittanen, who studies at a nearby school, said that she had heard nothing about her best friend since the shooting spree yesterday. "My friend was in the same classroom but I just don't know anything. I don't know if she's dead or alive."

Of Saari's 10 victims, all but one were in a room set aside for exams. Police said that Saari set off petrol bombs after the shooting, leaving the bodies charred beyond recognition. The nine corpses - seven females and two males - have been taken to the capital, Helsinki, for analysis.

The other victim, a young woman, was shot in the corridor outside and is thought to have died at Tampere University Hospital, where Saari himself died of self-inflicted head wounds yesterday afternoon.

Tapio Varmola, the college principal, today described Saari as a "silent young man" and said that nobody had any inkling about his deadly plan. "I am very depressed at the moment," he said. "He was a young man with two faces."

Monday, September 22, 2008

Nanny sent to work as underpaid servant

Nanny sent to work as underpaid servant
Nanny Catherine Manuel tells of her illegal work in Canada.
September 22, 2008

Staff Reporter

Note: This article was edited to correct a previously published version.

Catherine Manuel came to Canada as a live-in nanny to care for 8-year-old Brent of Toronto.

She ended up changing beds, cleaning toilets and painting the decks at the Whispering Pines bed and breakfast in Jackson's Point, on the shores of Lake Simcoe.

Manuel was promised about $420 a week to care for young Brent, with weekends and holidays off. Instead, she was underpaid and worked "morning, noon and night" as a cleaner, servant and handywoman.

Brent and his mother never surfaced. Today, four months after she arrived in Canada, Manuel wonders if they really exist.

On her days off, the skilled caregiver was driven to Toronto to clean the townhouse belonging to the innkeeper's boyfriend, a part-time lecturer at York University.

When the innkeeper suggested she would eventually have to crawl into the attic to insulate the century-old 11-bedroom inn in Jackson's Point, Manuel had had enough. She gave notice and quit.

"I just couldn't take it anymore," Manuel said at the home of a neighbour who has been looking after her. "I never wanted this. I did not come here to work illegally."

What Manuel endured happens all too regularly, according to critics and social workers. With more than 34,000 nannies and caregivers entering the country each year, most settling in the GTA, there is plenty of room for abuse.

Too often they are forced to work as domestic servants, as Manuel did, or in the worst cases, pressed into service at sweatshops and massage parlours.

Manuel is in limbo now because Canadian rules state she must work for the person who hired her. Heron Lloyd Tait of Jinkholm International, the Toronto recruitment agency that charged her $4,500 in placement fees, can't produce Brent and his mother, either.

In an interview, Tait said "we dropped the ball on this case." He said he recruits about 24 caregivers a year and maintains one reason he started Jinkholm was out of disgust for the exploitive practices of other firms. "I didn't set out to defraud anybody. My reasons for doing this was to help these people."

An experienced caregiver in Hong Kong for 12 years, Manuel, 39, was lured to Canada by the federal Live-in Caregiver Program, which allows her to become a permanent resident after two years of full-time employment.

Like many Filipino women, Manuel, a divorced mother of two boys, sought work overseas to support her family. Manuel's parents in the Philippines have largely raised her sons, now 17 and 19.

"Permanent residency in Canada was the bait for me," Manuel said of the chance to one day sponsor her kids. "Lloyd Tait promised me that my life would be better here."

Tait's company has been in business nine years. Its website states it is dedicated to finding the right caregiver and is founded "on the principles of service, care and dignity."

A friend in Canada put Manuel in touch with Tait last year. Her employment contract states she would be working for a Toronto woman named Terra Holman. Her job was to "care for Brent, including awakening and assisting in preparing breakfast, preparing lunches, supervision of homework and school projects, TV viewing."

To get the job, Manuel was told by Jinkholm she had to pay a $4,500 placement fee.

Placement fees are banned in the four Western provinces, but not in Ontario. Federally, the law is ambiguous on the fees, though critics have suggested Ottawa should outlaw them because they lead to exploitation of foreign workers.

Manuel's Canadian friend paid the first $750 instalment to retain Tait last fall.

"My only concern is that you stay with the employer with whom I place you," Tait wrote in an email. "I can assure that your employer will not overwork you," he said, addressing Manuel's worst fears.

She was then asked to sign a loan agreement at 12 per cent interest with a financing company – Pineway Financial Services – to cover the full placement fee. Tait told Manuel it was an unrelated company. The Star determined that Pineway is Tait's company, registered to his home on Pineway Blvd. in the Finch Ave. E. and Leslie St. area. Tait is the president.

This April, Tait flew to Hong Kong to give another recruiting seminar and collected the second $750 instalment in cash just before he and Manuel got on the plane. Tait did not give receipts.

In the days before leaving Hong Kong, Manuel was nervous because she could not reach Brent's family.

Tait reassured her everything would be all right.

When the plane arrived in Toronto April 29, Manuel presented her documents to Canada Immigration. One document, a Labour Market Opinion (LMO), described the job, pay and working conditions, and gave two telephone numbers for employer Terra Holman.

Immigration could not reach Holman. Tait, who was on the flight, did not intervene. But his assistant appeared and vouched for Holman.

Immigration allowed Manuel into the country. She was driven to the assistant's home, wondering where Holman and son Brent were.

A week later, Danya Scott, a consultant who works for Tait, drove Manuel to Whispering Pines.

Manuel said she was turned over to innkeeper Shirley Bollers who worked her "morning, noon and night, and then some."

Her chores included making beds, preparing and serving breakfast for guests, cleaning the bathrooms and doing the laundry, which required taking a cab to the local laundry then bringing the wet clothes back to the inn to hang out to dry.

Bollers would arbitrarily change her days off without notice. On two occasions she was brought to Toronto on her days off to clean a townhouse belonging to Bollers' boyfriend, Peter Flaherty, for which he paid her $60 each time. After spending the night on a couch, she was driven back to Whispering Pines the next day.

Flaherty, a retired high school teacher and currently a lecturer at York University, was the NDP candidate in York Central in the 2004 election, losing to Liberal Ken Dryden. Flaherty would not discuss the case saying, "it has nothing to do with me." There's no suggestion Flaherty knew of the circumstances of Manuel's employment.

Manuel was underpaid at the inn compared to the Jinkholm contract that brought her to Canada. Her nanny contract (based on 45 hours at $9.25 an hour) reveals she would have been paid about $420 a week, minus roughly $90 for room and board at Holman's home. She would have netted $330 a week. At Whispering Pines, she received about $250 a week after room and board, but worked many more hours with no overtime.

Manuel said that when Bollers went on vacation for eight days in early August she left no food. "They even took all the fruit from the fruit bowl with them."

When she complained to Tait about the heavy workload and not being paid, Manuel said he told her to keep quiet because she was working illegally. "He said, `I don't talk about immigration matters on the phone. If you want to talk to me you'll have to come to Toronto.'"

She did come to Toronto twice to pay her monthly placement fee instalments of $500 to Tait. The trips cost her about $200 in transportation, food and accommodation each time, money she could ill afford to spend.

"This man has no heart," a sobbing Manuel said. " This is money I desperately needed for my children."

The last time, on Aug. 14, Tait took her to a bank machine near his office at Wilson Ave. and Bathurst St. where she withdrew the $500.

With no sign of Holman and Brent, and more and more non-nanny jobs piling up, Manuel walked away from Whispering Pines earlier this month with the help of newfound "Canadian" friends in the area.

"This girl was bawling her eyes out as she was telling us her story," said Edith Bell-Laflamme, a Jackson's Point neighbour who picked her up from the inn. "Her biggest concern is that she is not able to send money back to her children."

During the four months at the inn, Bollers never issued her a proper pay slip showing mandatory deductions for Employment Insurance or Canada Pension Plan. Neither did she issue a record of employment or separation slip when she left.

The Star interviewed Tait, who is also a real estate agent with Sutton Group, about this case. Tait admitted he charges caregiver clients a placement fee of $4,500 and refers those who can't pay to Pineway Financial. (Tait tacks on a $600 loan administration fee.)

A friend advised him recently his ties to Pineway might be seen as a "conflict of interest" and effective immediately, he said, Pineway was no longer in the loan business.

Although he makes it a point of personally meeting all prospective employers, he never met Terra Holman, entrusting that task to "consultant" Danya Scott. The Star found Scott is an entrepreneur who sells several products, including nannies, videophones and financial services, via Internet ads.

In one ad, Scott calls herself a "Placement Consultant" for Jinkholm, offering clients a live-in nanny for as little as $250 a week.

Tait said he sent Manuel to Jackson's Point because Scott told him Holman had moved there. Scott did not respond to telephone and email messages.

Although he knew Manuel was working illegally at Whispering Pines, Tait did not alert Citizenship and Immigration Canada, nor did he apply for a new LMO that would allow her to work legally. His office also applied for a social insurance number and OHIP for Manuel after she arrived in Canada, using Holman's bogus address.

When Manuel complained about being overworked and not being paid for six weeks, Tait said he offered to place her with another family but she refused to move. "(Manuel) is lying, and telling half truths," Tait said.

Manuel said the offer of a new employer is news to her.

The Star interviewed innkeeper Bollers, also known as Shirley Browne. She first explained that Terra Holman was her sister and was out of the country on contract work and had asked her to look after Manuel until she returned.

In the span of a three-minute interview, Bollers went from referring to Holman as her sister, to "half sister" to "we may not be blood relatives but we call each other sisters."

Then she ushered the reporter out the door saying: "I don't have time for this nonsense."

In a subsequent phone call seeking Holman's whereabouts, Bollers replied: "You're the investigative reporter, you find her."

Another area woman has offered Manuel a job looking after her sick husband, and has begun the process of obtaining a new LMO so she can work legally for them.

"People like (Catherine) are coming to Canada thinking this is the land of opportunity," said Bell-Laflamme. "They have the right to be treated with respect and dignity when they get here."

Pura Velasco, head of the Coalition for the Protection of Caregivers Rights, wants protections built into the program. While Immigration officers are quick to deport caregivers duped or trafficked into Canada, they take no action against the agencies that brought them in.

The Canadian Labour Congress says there is little or no monitoring or enforcement of employment conditions and these workers fall through the cracks between the federal government, which runs the program, and the provinces, which enforce labour law.

Sunday, September 21, 2008

Wikipedia says this about our times...

The Tribulation (or "Great Tribulation") is an event referred to in the New Testament of the Bible at Matthew 24:21 ("For then shall be great tribulation..." - King James Version) and other passages. In the futurist view of Christian eschatology, the Tribulation is a relatively short period of time where people who follow God will experience worldwide persecution and be purified and strengthened by it.

In the Christian preterist view the Tribulation took place in the past when Roman legions destroyed Jerusalem and its temple in 70 AD, and it affected the Jewish people rather than all mankind.

Dispensationalist or futurist view

While it is considered a period of immense suffering and sacrifice, greater than anything before in history, believers are promised strong faith and powers to help them endure and prevail. Persecution is attributed to the believers rebelling against the Antichrist and his regime.

The Tribulation is generally thought to occur before the Second Coming of Jesus and the end of the world. A viewpoint first made popular by John Nelson Darby in the 19th century and recently popularized by Hal Lindsey in The Late Great Planet Earth is that it will last seven years in all, being the last of Daniel's prophecy of seventy weeks. It is theorized that each week represents 7 years, with the timetable beginning from the order by King Artaxerxes to rebuild the temple in Jerusalem. After 7 plus 62 weeks, the prophecy says that the messiah will be "cut off", which is taken to correspond to the death of Christ. This is seen as creating a break of indeterminate length in the timeline, with one week remaining to be fulfilled.

This seven-year week may be further divided into two periods of 3.5 years each, from the two 3.5-year periods in Daniel's prophecy where the last seven years are divided into two 3.5-year periods, (Daniel 9:27) The time period for these beliefs is also based on other passages: in the book of Daniel, "time, times, and half a time," interpreted as "a year, two years, and half a year," and the book of Revelation, "a thousand two hundred and threescore days" and "forty and two months" (the prophetic month averaging 30 days, hence 1260/30 = 42 months or 3.5 years). The 1290 days of Daniel 12:11, (rather than the 1260 days of Revelation 11:3), is thought to be the result of either a simple intercalary leap month adjustment, or due to further calculations related to the prophecy.

Many other groups, such as Jehovah's Witnesses do not believe in a rapture at any point.[citation needed] According to Jehovah's Witnesses, the Great Tribulation is coming and is soon to arrive. This period will see the fall of Babylon the Great, the Great Harlot, as spoken of in Revelation. After Babylon the Great has been removed, they say, the world powers shall move against God's chosen people for a short while. This will then usher in the ending of this "world" (not the earth, but the removal of all those who do not wish to follow God by standards).[citation needed] The Great Tribulation ends with the battle of Armageddon.[citation needed]

Seven seals

  • 1st Seal (Rev. 6:1-2): The White Horse of the Apocalypse. When he comes, he is given a crown and he goes out bent on conquest. This represents the Antichrist's rise to power through diplomacy.
  • 2nd Seal (Rev. 6:3-4): When the Red Horse comes he is given a large sword and he takes peace from the world, causing men to kill each other. The Antichrist reveals his true war-like self, and a world war erupts.
  • 3rd Seal (Rev. 6:5-6): When the Black Horse comes he causes severe famine possibly resulting from the war.
  • 4th Seal (Rev. 6:7-8): The Pale Horse causes pestilence and death from the sword, famine, plague and wild beasts and Hades follow it. 1/4 of the world's population die from the horsemen.
  • 5th Seal (Rev. 6:9-11): Martyrs begin dying during the Tribulation (The Antichrist begins his persecution of believers).
  • 6th Seal (Rev. 6:12-17):
    • Worldwide earthquake;
    • Visible sunlight ceases and the image of the solar disk goes from granular to woven;
    • The image of the moon resembles blood (possibly intensified transient lunar phenomena);
    • The stars of the heaven fall to earth (possibly aircraft and orbiting satellites);
    • The sky rolls up;(possibly intensified auroral activity or nuclear Mushroom Cloud)
    • Every mountain and island are dislodged;
    • The entire world population flees to caves, dens, and cliffs; and
    • The world population interprets the Sixth Seal events as signs for the beginning of the wrath of the Lamb (the Day of Wrath).
  • 7th Seal (Rev. 8:1-6): Silence in Heaven, seven angels given seven trumpets, followed by fire being hurled to the Earth.


CBS Sunday morning segment unbelievable Art + $$$

ART: Damien Hirst
From works depicting dead animals to a diamond-encrusted skull, artist Damien Hirst has always defied convention. It’s paid off - handsomely - as correspondent Sheila MacVicar reports from London.


Go to CBSNews.com Home

A Wall Street Week Of Biblical Proportions
Sept. 21, 2008
(CBS) We're taking stock this morning of the economic whirlwind that swept from Wall Street across the world this past week. Our Cover Story is reported by Martha Teichner:

At least the Dow ended the week up … 410 points Thursday, 366 points Friday, a glimmer of optimism that the economy might not be allowed to implode after all.

From the moment word reached Wall Street Thursday afternoon that Treasury Secretary Henry Paulson was about to meet with congressional leaders about a massive bailout plan, stocks soared.

The photo op after the meeting was a picture of cooperation and bipartisan unity.

Then there was Paulson, looking like a man in a hurry, announcing his plan:
"We must now take further, decisive action to fundamentally and comprehensively address the root cause of our financial system's stresses."

And President Bush, speaking to an audience larger than Wall Street, on Friday morning: "Investors should know that the United States government is taking action to restore confidence in America's financial markets so they can thrive again."

Confidence … there is no more ephemeral, or essential, component in what amounts to a huge gamble that our leaders can pull our economy (perhaps even the global economy) back from the brink of collapse. Yes, that's apparently how bad things had gotten.

"These are the most difficult times I think our markets have faced in the last 200 years," former Securities and Exchange Commissioner Harvey Pitt told Martha Teichner.

Pitt spent a dozen years at the SEC and was its head from 2001-2003.

"Certainly it's been historical; it could've been Biblical," said Mark Zandi, chief economist of Moody's Economy.com and author of the book "Financial Shock: A 360ยบ Look at the Subprime Mortgage Implosion, and How to Avoid the Next Financial Crisis" (FT press). "I mean, I was waiting for the locusts to fly through my office at one point."

"This could be comparable to the Great Depression in terms of just its effect on financial markets," said Robert Reich.

Now a professor at Berkeley, Reich was Labor Secretary under Bill Clinton. We asked him what lots of Americans are asking: How did it come to this?

"The people who were issuing warnings were not listened to," he said, "partly because Wall Street is very powerful in Washington. Wall Street kept on saying, 'Well, don't worry about anything, we have everything under control, we don't need more regulation.'"

Regulatory firewalls were put in place to prevent the financial excesses that led to the Great Depression. By the 1970s, banks and securities firms, caught up in major turf wars, lobbied for deregulation … and got it.

"We had over-leveraging in many of these firms," said Pitt, "and the net result was that people were leveraged, in some cases, as high as 100 to one."

People were also making piles of money by trading in packages of questionable mortgages and complicated, unregulated securities, called derivatives.

"Derivatives, essentially, are bets on how stocks or how bonds are going to move, and they're called derivatives because they are derived from those movement," said Reich.

But what if you bet wrong? That, say, the housing market will just keep going up but instead, the subprime mortgage meltdown happens? The whole house of cards collapses, taking Bear Stearns, Fannie Mae and Freddie Mac, Lehman Brothers, Merrill Lynch and AIG with it.

"We're scared, we're panicked, we don't even trust our money market mutual funds, which we all thought was one step removed from the mattress," said Zandi.

How's this for scared: Last Wednesday, after problems emerged in several funds, investors pulled nearly $90 billion out of others.

"Confidence, or the lack thereof, is what's driving this mess that we're in," Zandi said.

Which is why the U.S. government felt it had to intervene … fast.

"I am convinced that this bold approach will cost American families far less than the alternative: a continuing series of financial institution failures and frozen credit markets unable to fund economic expansion," Paulson said this week, in announcing the government's bid to bail out struggling financial institutions by purchasing their bad debt, at the cost of hundreds of billions of dollars.

We know a little more today about the proposal Paulson took to Congress: it would give the Treasury two years and $700 billion of taxpayer money to buy up distressed mortgages.

And then there's this scary number: $11,315,000,000,000, to which the federal debt ceiling would have to be raised, from the current $10.6 trillion dollars.

So will the bailout end the crisis?

"I think we're in the sixth inning of a nine-inning game," Zandi said, "and I don't think this is a double-header. So I think we're closer to the end than the beginning."

"Until we know for certain we've reached the bottom, that up-and-down motion is just going to continue," Reich said.

"I think that there will be a certain amount of continued difficulty through the end of the year," Pitt predicted.

But first there's tomorrow, when markets around the world take their next vote of confidence on the American economy as it prepares for emergency shock treatment.


Saturday, September 20, 2008

Hadron Collider halted for months

Hadron Collider halted for months

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David Shukman heads deep underground to take a look at the LHC's tunnel

The Large Hadron Collider near Geneva will be out of action for at least two months, the European Organization for Nuclear Research (Cern) says.

Part of the giant physics experiment was turned off for the weekend while engineers probed a magnet failure.

But a Cern spokesman said damage to the £3.6bn ($6.6bn) particle accelerator was worse than anticipated.

The LHC is built to smash protons together at huge speeds, recreating conditions moments after the Big Bang.

Scientists hope it will shed light on fundamental questions in physics.

Section damaged

On Friday, a failure, known as a quench, caused around 100 of the LHC's super-cooled magnets to heat up by as much as 100C.

The fire brigade were called out after a tonne of liquid helium leaked into the tunnel at Cern, near Geneva.

Cern spokesman James Gillies said on Saturday that the sector that was damaged would have to be warmed up well above absolute zero so that repairs could be made.

While he said there was never any danger to the public, Mr Gillies admitted that the breakdown would be costly.

He said: "A full investigation is still under way but the most likely cause seems to be a faulty electrical connection between two of the magnets which probably melted, leading to a mechanical failure.

"We're investigating and we can't really say more than that now.

"But we do know that we will have to warm the machine up, make the repair, cool it down, and that's what brings you to two months of downtime for the LHC."


The first beams were fired successfully around the accelerator's 27km (16.7 miles) underground ring over a week ago.

The crucial next step is to collide those beams head on. However, the fault appears to have ruled out any chance of these experiments taking place for the next two months at least.

The quench occurred during final testing of the last of the LHC's electrical circuits to be commissioned.

At 1127 (0927 GMT) on Friday, the LHC's online logbook recorded a quench in sector 3-4 of the accelerator, which lies between the Alice and CMS detectors.

The entry stated that helium had been lost to the tunnel and that vacuum conditions had also been lost.

The superconducting magnets in the LHC must be supercooled to 1.9 kelvin above absolute zero, to allow them to steer particle beams around the circuit.

As a result of the quench, the temperature of about 100 of the magnets in the machine's final sector rose by around 100C.

The setback came just a day after the LHC's beam was restored after engineers replaced a faulty transformer that had hindered progress for much of the past week.

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