Run on Russian bank heightens fears

Globex on Wednesday banned depositors from withdrawing their money as confidence in the Russian banking system began to show signs of evaporating.

Globex, a mid-sized retail bank with assets of $4bn (€2.95bn, £2.32bn), is the first Russian bank to experience a run on deposits during the crisis. It lost 13 per cent of its deposits last month, according to Maxim Raskosnov, an analyst at Renaissance capital, and a further 15 per cent this month according to Emilya Alieva, Globex’s vice-president.

At least a dozen other Russian banks have reported a sharp rise in withdrawals and account closures.

An economist with a leading western bank in Moscow said Globex was probably the first in what could be a number of bank panics, if the government did not take concerted action soon. “I think there are a large number of small and medium sized banks that are in the same situation,” she said.

Despite a Kremlin promise of $200bn in relief funds – $87bn this week – the fall-out of a stock market plunge and the global credit crunch appears to be worse than anticipated, analysts say.

So far, the crunch has not affected the living standards of ordinary Russians, but a rash of bank failures could.

Read moreRun on Russian bank heightens fears

Financial crisis: Moscow supermarket shelves increasingly empty in Soviet era reminder

Russian shoppers have been served an uncomfortable reminder of the Soviet era after finding shelves in some Moscow supermarkets empty, a further sign that the woes of the financial markets have begun to affect the mainstream economy.

For a generation of Russians who queued daily in the snow for the most basic of staples, the symbolism of a bare supermarket shelf is so powerful that it could potentially destroy the reputation of Vladimir Putin, the prime minister, as saviour of the world’s largest country.

The shortages are not yet widespread. Even so, goods have begun to vanish from dozens of Moscow supermarkets over the past fortnight.

At a branch of the supermarket chain Samokhval in southwestern Moscow, a handful of shoppers pushed their trolleys through empty rows of shelves that once groaned under the weight of imported wares.

The deep freezes hummed, although there was nothing to freeze. Only a row of baked beans, a few jars of olives and sealed cupboards filled with vodka and cheap wine interrupted the void.

Read moreFinancial crisis: Moscow supermarket shelves increasingly empty in Soviet era reminder

Crisis spreads to Eastern Europe as Ukraine, Hungary and Serbia call IMF

Ukraine, Hungary, and Serbia are all in emergency talks with the International Monetary Fund, raising fears that an exodus of foreign investors will set off a systemic crisis across Eastern Europe.

A team of IMF trouble-shooters rushed to Kiev on Wednesay to draw up a possible standby loan to help Ukraine stabilize its bank after a panic run on deposits this month.

Read moreCrisis spreads to Eastern Europe as Ukraine, Hungary and Serbia call IMF

Big Brother database: the revolt grows

Labour MPs join opposition parties in attack on Home Secretary’s ‘Orwellian’ plans

Jacqui Smith faces a parliamentary backlash over “Orwellian” plans to intercept details of email, internet, telephone and other data records of every person in Britain. Labour MPs joined opposition parties in expressing doubts about plans announced by the Home Secretary which could lead to a vast database of information about Britons’ calls and internet habits.

They warned that MPs, emboldened by the Government’s decision to ditch plans to hold terrorist suspects for up to 42 days without charge, would not accept this extension of state power.

The scale of the Government’s ambitions to hold data on email, internet and phone use emerged as government sources made it clear they needed new powers to obtain details of social networking sites on the internet, video sites, web-based telephone calls and even online computer games.

Read moreBig Brother database: the revolt grows

Birmingham on the brink of bankruptcy


With $3.2 billion in debt, the county that is home to Alabama’s largest city is about to go bust. How the credit crisis went South.

(Fortune Magazine) — Bob Riley wanted to help. It was Sunday, Oct. 5, and the Alabama governor was on the phone with Neel Kashkari, a Treasury Department official who the next day would be named by Treasury Secretary Hank Paulson as interim leader of the government’s just-approved $700 billion Troubled Asset Relief Program. But Riley couldn’t wait for Kashkari’s role to become official. He needed to impress upon the new bailout boss the seriousness of the exploding financial crisis in Jefferson County, home to Birmingham. Riley argued that it was urgent that the federal government come to the aid of his state – now.

As he would describe it in a follow-up letter to Kashkari, the situation in Jefferson County was “the single biggest threat to the municipal bond market today and a poster child for how the subprime mortgage crisis is hurting Main Street America.”

For months now, Riley and other civic leaders in Alabama have been battling to avert what appears almost certain – that Jefferson County will file for Chapter 9 protection, in what would be the largest municipal bankruptcy in our nation’s history. The county has fallen hopelessly behind on payments to service the $3.2 billion it borrowed – on reckless terms – from Wall Street over the past decade to build a new sewer system. As Fortune went to press, the Jefferson County Commission was days away from a vote that could make the bankruptcy official.

Read moreBirmingham on the brink of bankruptcy

Afghan strike kills at least 18 civilians

The issue of civilian casualties is hugely controversial

At least 18 civilians have been killed in an air strike by foreign forces in the southern Afghan province of Helmand, reports say.

A BBC reporter in the provincial capital Lashkar Gah saw the bodies – three women and the rest children – ranging in age from six months to 15.

The families brought the bodies from their village in the Nad Ali district, where they say the air strike occurred.

A further nine bodies are said to be trapped under destroyed buildings.

Nato-led forces say they are investigating the incident in an area where the British military are known to operate.

The BBC’s Martin Patience in Kabul says that civilian casualties are hugely damaging to foreign forces trying to wage a “hearts and minds” campaign.

On Sunday, Afghan and UK officials said that dozens of Taleban insurgents died in a battle with Afghan and Nato-led forces on the outskirts of Lashkar Gah.

Three days later they said that a further 18 militants were killed while attacking a police checkpoint in the same area.

‘Notorious incident

Figures released in September by the United Nations said there had been a sharp increase in the number of civilian casualties in Afghanistan in 2008.

Read moreAfghan strike kills at least 18 civilians

Switzerland Bails Out UBS; Credit Suisse Raises Funds

Pedestrians walk past a branch of the UBS bank in Bern, Switzerland, on Thursday, Oct. 2, 2008. Photographer: Adrian Moser/Bloomberg News

Oct. 16 (Bloomberg) — Switzerland gave UBS AG, the European bank with the biggest losses from the credit crisis, a $59.2 billion rescue and pushed Credit Suisse Group AG to raise funds, joining authorities around the world in shoring up banks.

UBS will get 6 billion Swiss francs ($5.2 billion) from the government and put as much as $60 billion of risky assets into a fund backed by the central bank, the Zurich-based company said. Credit Suisse Group AG raised 10 billion francs from investors including Qatar and Tel Aviv-based Koor Industries Ltd.

Switzerland is the last of the world’s financial centers to pour cash into ailing financial institutions after losses on bad debts reached $647 billion globally and credit markets froze. The Swiss government plans to raise deposit guarantees and is ready to back the short- and medium-term interbank loans of the nation’s banks, after countries across Europe took similar measures.

Read moreSwitzerland Bails Out UBS; Credit Suisse Raises Funds

CNN’s Glenn Beck and Peter Schiff: Inflation Nation and Martial Law

Added: Oct. 13, 2008

Source: YouTube

Whistleblower: Oil watchdog agency ‘cult of corruption’

HONOLULU, Hawaii (CNN) — Bobby Maxwell kept a close eye on the oil industry for more than 20 years as a government auditor. But he said the federal agency he worked for is now a “cult of corruption” — a claim backed up by a recent government report.

Bobby Maxwell, a long-time auditor of the oil industry, says his former agency is corrupt "top to bottom."
Bobby Maxwell, a long-time auditor of the oil industry, says his former agency is corrupt “top to bottom.”

“I believe the management we were under was showing favoritism to the oil industry,” Maxwell told CNN.

Maxwell is referring to a tiny agency within the Department of the Interior called the Minerals Management Service, which manages the nation’s natural gas, oil and other mineral resources on federal lands.

A report, conducted by the Interior Department’s inspector general and released earlier this month, found that employees at the agency received improper gifts from energy industry officials and engaged with them in illegal drug use and inappropriate sexual relations. It looked at activities at the agency from 2003 through 2006.

Maxwell said the report doesn’t surprise him. The agency, he said, is corrupt “top to bottom.” Video Watch a failure to “protect America’s interests” »

“It sounds like they forgot they work for the government,” he said. “It’s disgusting. … There’s no excuse for that. Those people should not be working in those positions at all.

“They crossed a lot of lines that should never have been crossed,” he said. “They lost all objectivity.”

Maxwell was in charge of keeping track of the millions in royalty payments owed taxpayers by oil and gas companies who explored and found oil on U.S. government lands.

He estimates he and his team were responsible for saving the government close to $500 million in royalties, either underpaid or somehow skipped by oil and gas companies, over the years.

He received the Interior Department’s highest award in 2003 for his work. But not long afterward, his job was killed.

He believes it was retribution for his cracking down on Big Oil and blowing the whistle on what he believes was a “cult of corruption” within the agency. The Interior Department denies that, saying his job was reorganized as part of routine restructuring.

Just before he lost his job, he said, one of his superiors in Washington ordered him not to investigate why Shell Oil had raised its oil transportation costs. Maxwell said it jumped from 90 cents to $3 a barrel without adequate explanation. The government paid Shell to transport oil from offshore platforms.

When asked why a government worker would tell an auditor not to investigate, he said: “I believe it started from the top down,” he said.

Read moreWhistleblower: Oil watchdog agency ‘cult of corruption’

Unemployment to hit three million within a year as it rises at fastest rate for 17 years

Cuts: Unemployment rose by 164,000 in the three months up to August and could hit two million by Christmas as the credit crunch hits home

Unemployment could hit three million by the end of next year to levels not seen since John Major was in power as Britain battles recession, it was warned today.

The rate is already at its highest level for almost a decade after soaring more than 10 per cent in the past three months to 1.79million.

In its biggest rise since 1991, 164,000 people lost their jobs in June, July and August. Last month alone, more than 31,000 people signed up to claim the dole.

Vicky Redwood from Capital Economics believes this is just the tip of the iceberg and that unemployment could eventually hit three million as the slowdown deepens.

‘With the UK heading into recession, we expect this measure to rise by a total of 1.5 million to around three million or nine percent by the end of 2010,’ she said.

Read moreUnemployment to hit three million within a year as it rises at fastest rate for 17 years