Wall Street banks hit by downgrades

Goldman Sachs, JPMorgan Chase and Morgan Stanley were hit by a raft of analysts’ downgrades on Tuesday amid growing concerns that tough conditions in credit and equity markets will significantly reduce their profits.

The bearish comments by Wall Street analysts triggered a sell-off in banking shares that dragged the broader market lower, with the S&P 500 off 1.2 per cent.

Goldman’s shares fell 6 per cent after three analysts warned that the firm – which has outperformed rivals throughout the crisis – was experiencing a severe slowdown in its equity and investment banking businesses.

Shares in JPMorgan Chase dropped nearly 10 per cent – its biggest daily fall in six years – a day after it revealed that difficult credit markets had caused $1.5bn in writedowns in July.

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Taliban kill 14, declare “open war” in Pakistan

The Seattle Times has removed the article but the printer friendly version still works.
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PESHAWAR, Pakistan – In retaliation for Pakistan’s aggressive air assault on the tribal region this week, the Taliban declared “open war” and bombed a minibus Tuesday carrying 18 Pakistani air-force personnel on a major road in Peshawar. Up to 14 people were killed.

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The Summer Olympics And World War III

Earl Of Stirling

The Olympics are what is right about the world. On this last Friday, the eighth day of the eighth month of the eighth year of the new millennium we witnessed a fantastic spectacle, a peaceful gathering of the many nations of our small blue planet; a competition of the best young athletes from all over the world. The Olympics make us proud to be humans; proud to be citizens of Earth.

Sadly, on this same day, we saw what future historians will count as the day that the Third World War began. It was designed this way, by the evil people who worked hard to begin the war under the cover of the Olympics.

We all like to be right, myself included, but sometimes it is not so wonderful. I have written a series of articles over the last few weeks on the coming nightmare centered on the neo-con grand strategy. I predicted the outbreak of hostilities in Georgia and Russia and said that there is a strong link between what is happening there and to what is about to happen against Iran. I said that the war in Georgia was intended as a strategic distraction for Russia as America, the United Kingdom, France, Israel, and others assemble their large naval blockade of Iran, but a strategic distraction that would backfire. I also described the massive US Naval armada headed for Iran; the make-up of this extremely large and powerful force is as I described it several days ago (this has now been confirmed by Israeli sources).

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U.S. Take Control of Georgian Ports

TBILISI (Reuters) – President George W. Bush’s pledge to send aid to Georgia means that the U.S. military will take control of the ex-Soviet state’s ports and airports, Georgian President Mikheil Saakashvili said on Wednesday.

“You have heard the statement by the U.S. president that the United States is starting a military-humanitarian operation in Georgia,” Saakashvili said in a television address.

“It means that Georgian ports and airports will be taken under the control of the U.S. defense ministry in order to conduct humanitarian and other missions. This is a very important statement for easing tension.”

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Prince Charles warns GM crops risk causing the biggest-ever environmental disaster

Prince Charles warns GM crops risk causing the biggest-ever environmental disaster Listen: The Prince of Wales speaks out

The mass development of genetically modified crops risks causing the world’s worst environmental disaster, The Prince of Wales has warned.

In his most outspoken intervention on the issue of GM food, the Prince said that multi-national companies were conducting an experiment with nature which had gone “seriously wrong”.

The Prince, in an exclusive interview with the Daily Telegraph, also expressed the fear that food would run out because of the damage being wreaked on the earth’s soil by scientists’ research.

He accused firms of conducting a “gigantic experiment I think with nature and the whole of humanity which has gone seriously wrong”.

“Why else are we facing all these challenges, climate change and everything?”.

Related article: The Prince of Wales: ‘If that is the future, count me out’

Relying on “gigantic corporations” for food, he said, would result in “absolute disaster”.

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Inflation surges to 16-year high

Inflation soared to 4.4% last month – the biggest jump in the cost of living in more than 16 years – on the back of rocketing food prices, clouding hopes that the Bank of England will move to cut interest rates in coming months.

The Office for National Statistics said today that the consumer prices index (CPI), the government’s preferred inflation measure, leapt to an annual rate of 4.4%, up from 3.8% in June. This beat analysts’ expectations of inflation of 4.1%, and is more than double the government’s target.

This is the highest level recorded since the CPI series began in January 1997. According to analysts, inflation was last higher in April 1992 when it hit 4.7%.

The main driver was hefty rises in food prices, particularly bacon, ham and poultry. The cost of meat on the year was up a record 13.7%. Bread and cereal prices also shot up and fuel inflation was at an all-time high as well.

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Japan: Economy Shrinks 2.4%; Recession Looms

Aug. 13 (Bloomberg) — Japan’s economy, the world’s second biggest, contracted last quarter as exports fell and consumers spent less, bringing the country to the brink of its first recession in six years.

Gross domestic product shrank an annualized 2.4 percent in the three months ended June 30 after expanding 3.2 percent in the first quarter, the Cabinet Office said today in Tokyo. The Nikkei 225 Stock Average fell 2.1 percent, the most since Aug. 1.

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Credit crunch misery deepens for UBS


Photograph: Fabrice Coffrini/AFP

UBS has underlined its status as one of the biggest losers in the credit crunch by announcing £5.1bn of fresh writedowns and its fourth quarterly loss in a row.

The Swiss bank said this morning that it made a net loss of 358m Swiss francs (£173m) in the second quarter of this year. The loss was caused by its continuing exposure to the US housing market, and a huge outflow of funds as wealthy individuals took their money elsewhere.

The new writedowns push UBS’s total since the crisis started to $42bn, bringing it closer to Citigroup ($47bn) and Merrill Lynch ($46bn).

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Bear Stearns: Insider Trading

Aug. 11 (Bloomberg) — On March 11, the day the Federal Reserve attempted to shore up confidence in the credit markets with a $200 billion lending program that for the first time monetized Wall Street’s devalued collateral, somebody else decided Bear Stearns Cos. was going to collapse.

In a gambit with such low odds of success that traders question its legitimacy, someone wagered $1.7 million that Bear Stearns shares would suffer an unprecedented decline within days. Options specialists are convinced that the buyer, or buyers, made a concerted effort to drive the fifth-biggest U.S. securities firm out of business and, in the process, reap a profit of more than $270 million.

Whoever placed the bet used so-called put options that gave purchasers the right to sell 5.7 million Bear Stearns shares for $30 each and 165,000 shares for $25 apiece just nine days later, data compiled by Bloomberg show. That was less than half the $62.97 closing price in New York Stock Exchange composite trading on March 11. The buyers were confident the stock would crash.

“Even if I were the most bearish man on Earth, I can’t imagine buying puts 50 percent below the price with just over a week to expiration,” said Thomas Haugh, general partner of Chicago-based options trading firm PTI Securities & Futures LP. “It’s not even on the page of rational behavior, unless you know something.”

`Lottery Ticket’

The 57,000 puts that traded March 11 at the $30 strike price and the 1,649 that traded at $25 were collectively worth about $1.7 million, Bloomberg data show. Each put is equal to 100 shares of stock.

“That trade amounted to buying a lottery ticket,” said Michael McCarty, chief options and equity strategist at New York-based brokerage Meridian Equity Partners Inc. “Would you buy $1.7 million worth of lottery tickets just because you could? No. Neither would a hedge fund manager.”

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One Third of New Owners Owe More Than House Is Worth

Aug. 12 (Bloomberg) — Almost one-third of U.S. homeowners who bought in the last five years now owe more on their mortgages than their properties are worth, according to Zillow.com, an Internet provider of home valuations.

Second-quarter home prices fell 9.9 percent from a year earlier, giving 29 percent of owners negative equity, said Zillow, the Seattle-based service that offers values for more than 80 million homes. For those who bought at the 2006 peak of the housing market, 45 percent are now underwater, Zillow said.

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