NEWS Daily Headlines & Propaganda 20080906 human beings are free SATURDAY Early Morning Edition, From Recession to Depression

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Daily Headlines & Propaganda from HumanBeingsAreFree
Saturday, 6 September 2008 see All News
Early Morning Edition, From Recession to Depression

$$$ FREDDIE / FANNIE $$$ & US housing

U.S. to take control of mortgage giants: reports (Reuters.com - USA)
Selections: "The value of the company's common stock would be diluted but not wiped out while the holdings of other securities, including company debt and preferred shares, would be protected by the government, the Post said. Senior Bush administration and Federal Reserve officials called in top executives of Fannie Mae and Freddie Mac on Friday and told them that the government was preparing to place the two companies under federal control, officials and company executives told the New York Times. The executives were told they and their boards would be replaced and shareholders would be virtually wiped out, but the companies would be able to continue functioning with the government generally standing behind their debt, The Times said."

Paulson Meets With Bernanke, Fannie,Freddie Chiefs (Update1) (Bloomberg.com - New York City, USA)
Selections: "The meetings come a month after Paulson hired Morgan Stanley to advise on any use of taxpayer funds to recapitalize Fannie and Freddie, and before the FHFA releases an assessment of their capital. Investors have pressed for clarity on how any intervention would work, spelling out what would happen to current and future stockowners, bondholders and other creditors.... ``The Treasury wants to get in front of this and to inject some capital before the markets tend to take it the wrong way,'' Bill Gross, manager of the world's biggest bond fund at Pacific Investment Management Co. in Newport Beach, California, said in a Bloomberg Television interview, referring to the capital assessment. Mudd and Syron must approve of any government intervention under the law, unless the FHFA declares that either firm has insufficient capital. The legislation gave the Treasury the power through the end of next year to extend unlimited credit to or make equity purchases in the firms. Analysts have speculated that the Treasury would wipe out common shareholders, while seeking to shield preferred stockowners from total loss. Fannie and Freddie preferred shares are typically owned by banks and insurance companies. Their $5.2 trillion of debt outstanding is held by investors including Asian central banks, and would probably be guaranteed, analysts said. The Wall Street Journal reported earlier that Paulson is close to completing a plan that includes changes of senior management, according to an unidentified person familiar with the matter. The Journal also said the plan involved what it called a creative use of the Treasury's powers, without citing anyone."

Fannie and Freddie Fall After Report Treasury Is Close to Deal (Bloomberg.com - New York City, USA)

"US Treasury close to deal to prop up mortgage giants Fannie and Freddie (Independent.co.uk - London, UK)
Selections: "The US Treasury is close to a deal to prop up the mortgage finance giants Fannie Mae and Freddie Mac, whose crumbling finances have put the US housing market in jeopardy and threatened to turn an economic slowdown into a deep recession. A string of meetings yesterday between Treasury Secretary Hank Paulson, Federal Reserve chairman Ben Bernanke and the chief executives of the two companies were aimed at hammering out a deal that could be announced as soon as this weekend. The intensive efforts to reach an agreement came as a poisonous cocktail of fear, financial distress and weakening economic news sent global stock markets skidding lower.."

$$$ FEDERAL (lack of) MONEY $$$

Federal Highway Fund About to Run Out of Money (NYtimes.com - New York City, USA)

Fed woes could mean big price for state (Blog.SeattlePI.nwsource.com - Seattle, USA)

U.S. Highway Fund Needs $8 Billion Bailout This Month (Update3) (Bloomberg.com - New York City, USA)

$$$ THE SO-CALLED UNEMPLOYMENT RATE $$$

VIDEO MSNBC: Unemployment rate hits 5-year high (MSNBC.MSN.com):

US Jobless Rate Jumps to 6.1% (Time.com)

U.S. Economy: Payrolls Drop, Unemployment at 6.1% (Update2) (Bloomberg.com - New York City, USA)

$$$ ANOTHER KIND OF FUNNY MONEY: CORPORATE ACCOUNTING $$$

GE Says SEC May File Civil Case in Accounting Probe (Update2) (Bloomberg.com - New York City, USA)

GE Says SEC Considers Civil Case in 3-Year-Old Accounting Probe (Bloomberg.com - New York City, USA)

Weak retail sales and bank fears send shares tumbling (Independent.co.uk - London, UK)

Global stocks pressured as economic gloom mounts (UK.Reuters.com)
Downey, Entergy, General Electric, UST: U.S. Equity Preview (Bloomberg.com - New York City, USA)

$$$ GLOBALIZATION $$$

O2 urges stores to back 'electronic wallet' handset after trial success (Independent.co.uk - London, UK)

Greek god gives lift to Carlyle (Independent.co.uk - London, UK)

Bank of England to show no mercy as firms go under (Independent.co.uk - London, UK)
Selections: "Base rate is set to remain at 5 per cent this week, while official figures reveal corporate failures could reach a staggering 17,000 this year. There's worse to come, insolvency experts warn. Figures for the 1990s show that company failures do not seriously escalate until the second and third year of a recession. Britain has yet to officially lurch into recession, defined as two quarters of negative economic growth."

$$$ STRIKES $$$

Boeing's Talks With Machinists Fail; Strike to Start (Update1) (Bloomberg.com - New York City, USA)