October 2008 – Page 12 – Infinite Unknown

Satellite-Surveillance Program to Begin Despite Privacy Concerns

October 1, 2008 by Infinite

WASHINGTON — The Department of Homeland Security will proceed with the first phase of a controversial satellite-surveillance program, even though an independent review found the department hasn’t yet ensured the program will comply with privacy laws.

Congress provided partial funding for the program in a little-debated $634 billion spending measure that will fund the government until early March. For the past year, the Bush administration had been fighting Democratic lawmakers over the spy program, known as the National Applications Office.

U.S. Factories Contracted at Faster Pace in September

October 1, 2008 by Infinite

Oct. 1 (Bloomberg) — Manufacturing in the U.S. contracted in September at the fastest pace since the last recession as sales slowed, signaling the credit crisis is spreading beyond Wall Street.

The Institute for Supply Management’s factory index dropped to 43.5, the lowest level since October 2001 and less than economists anticipated, the Tempe, Arizona-based group reported today. A reading of 50 is the dividing line between expansion and contraction.

The housing slump has already spread to autos, and other industries may soon follow, as mounting foreclosures, tougher lending rules and rising unemployment choke off consumer spending. While exports have so far kept manufacturing from slipping much more, weakening economies around the globe are also causing overseas sales to slow.

“Manufacturing could be on the brink of a collapse,” said Lindsey Piegza, a market analyst at FTN Financial in New York. `There are no orders, no jobs and there is really no incentive for businesses to invest. The credit crisis is compounding the problem.”

Lehman Hedge-Fund Clients Left Cold as Assets Frozen

October 1, 2008 by Infinite

Barclays Capital logos are displayed on the facade of the Lehman Brothers Holdings Inc. headquarters building in New York, Sept. 24, 2008. Photographer: Gino Domenico/Bloomberg News

Oct. 1 (Bloomberg) — Lehman Brothers Holdings Inc.’s bankruptcy probably means the end of hedge-fund manager Oak Group Inc. after 22 years in business.

John James, who runs the Chicago-based firm with $25 million of assets, didn’t buy Lehman stock or debt. Instead, his potentially fatal mistake was to rely on the bank’s prime brokerage in London, a unit that provides loans, clears trades and handles administrative chores for hedge funds. He’s one of dozens of investment managers whose Lehman prime-brokerage accounts were frozen when the company filed for protection from creditors on Sept. 15.

“We’re probably going out of business and liquidate, game over,” James, 59, said. “We’ve lost 70 percent of our assets.”

The list of funds trapped in the Lehman morass keeps growing. London-based MKM Longboat Capital Advisors LLP said last week it will close its $1.5 billion Multi-Strategy fund in part because of assets stuck at Lehman, according to an investor letter.