Inhalt:

It turned to David W. Noack, a trusted local investment banker,
who proposed that the district borrow from overseas and use the
money for a complex investment that offered big profits.

The schools’ $200 million was actually used as collateral for
a complicated form of insurance guaranteeing about $20 billion of
corporate bonds. That investment — known as a synthetic C.D.O. —
committed the boards to paying off other bondholders if corporations
failed to honor their debts.

If just 6 percent of the bonds insured went bad, the Wisconsin
educators could lose all their money. If none of the bonds defaulted,
the schools would receive about $1.8 million a year after paying
off their own debt. By comparison, the C.D.O.’s offered only a
modestly better return than a $35 million investment in ultra-safe
Treasury bonds, which would have paid about $1.5 million a year,
with virtually no risk.
[...]
Last March the delicate web tying Wisconsin, Dublin and Manhattan
became an anchor dragging everyone down.
[...]
Most, if not all, of the $200 million would probably be lost.

Analysis by law firm Taylor Wessing shows an increasing number
of trusts struggling to survive in the downturn, with one trust,
Hygea VCT, needing to pay fees that equate to nearly 1,000 per cent
of its liquid asset base.

A 20 ft container could now be shipped from Hong Kong to Hamburg
for as little as $350, excluding surcharges, compared with around
$1,400 per teu last summer.

According to one sales and purchase manager of an Asia-based dry
bulk operator who prefered not to be named there is currently no one
willing to buy a bulk ship in the market at the moment and activity
has effectively ceased.

“There has been no deals done in the past weeks and I see no buyers
at all,” said the manager.
[...]
A shipbroker based in Shanghai also said there had been no secondhand
bulker sales in over a month.
[...]
And the newbuilding market has been quiet since May this year.”

“I would say prices of dry bulk vessels in general have fallen by
at least 50% from its peak in July,” said the unnamed sales and
purchase manager.

He said the value of dry bulk vessels, using a handysize bulker as
an example, was falling by a million dollars a day. “This is just
my guess as no one is even asking for a price.”

The Institute for Supply Management's factory index dropped to 38.9,
worse than anticipated by economists surveyed by Bloomberg News
and the lowest level since September 1982, the Tempe, Arizona-based
group reported today. A reading of 50 is the dividing line between
expansion and contraction.

VeraSun previously said those agreements will lead to a net loss
of between $63 million and $103 million for the third quarter (see
Green Light post). The company has yet to announce its third-quarter
earnings.

Sour gas is natural gas tainted with toxic hydrogen sulphide. Many
in the area believe sour-gas wells pose a risk to human and livestock
health.

But just a few months ago, the central government announced that
it was expecting a coal shortfall of 40 million tons this year. And
that supply crunch is especially serious after the heavy snowstorms
in February and the Sichuan earthquake in May. To meet the demand,
the country will increase coal production capacity by 222 million
tons, raising the total supply to about 2.7 billion tons.

Due in part to a lack of available coal, China has faced a serious
power supply shortage this summer. During the hot season the country
has a power capacity shortage of 10,000 megawatts

Over the long run, coal will continue to be China’s largest
energy supply source. China plans to raise its coal production by
6.5 percent this year to 2.7 billion tons, and to 3.1 million tons
by 2010. For reference, the U.S. consumed about 1.1 billion tons
of coal in 2007. China’s largest coalproducing province of Shanxi
plans to raise production to 700 million tons per year by 2010, up
from 540 million tons last year. The province is home to China’s
largest coal reserves, 270 billion tons, accounting for 25 percent
of China’s total.

Morgan Stanley calculates that Rome needs to roll over €198bn next
year as a clutch of maturities comes due. This compares with €173bn
for Germany, €135bn for France, and €57bn for Spain. Four EU
states have had to cancel bond auctions this month due to a buyers'
strike.

"The outflows from Italian bonds have been relentless over the last
year," said Simon Derrick, currency chief at the Bank of New York
Mellon. "It has reversed all the inflows since 2003 and the intensity
does reflect significant concerns about the level of public debt."

The Reserve Bank of India lowered its repurchase rate to 7.5 percent
from 8 percent, reduced the amount of deposits that lenders need to
set aside as reserves to 5.5 percent from 6.5 percent, and cut the
amount of money lenders are required to keep in government bonds to
24 percent from 25 percent.

Depending upon conditions still being crafted by Treasury, thousands
more private banks could apply for government capital as well,
a Treasury spokeswoman said Sunday.

Nick Ashooh, a spokesperson for AIG, said some of the cash the
insurer has borrowed through the commerical paper facility has been
used to pay down AIG’s original borrowing from the government. As of
Thursday afternoon, the balance on the initial loan had fallen by $6.5
billion, to $65.5 billion, from $72.0 billion a week ago. Meaning,
government-owned AIG is essentially paying off one government loan
with another.

<http://www.prudentbear.com/images/stories/guest2008/g103108.gif>;

In other words the cost of insuring against a US government default
has risen by 25 times in little over a year. Similar trends have
been evident in the UK and German government bond markets.
[...]
Signs of strain in the US Treasury market are already there, despite
the current low yields. Recent auctions have shown poor bid-to-cover
ratios, and long tails (the difference between the average accepted
yield, and highest yield), both signs of shallow demand. Delivery
failures in the secondary market have also hit record levels, a sign
of poor liquidity. Market observers should keep a close eye on the
progress of future auctions, particularly as the issuance schedule
picks up.

In the third quarters of 2008 and 2007, the Company recorded net
gains (losses) from securitization of credit card receivables
of ($1,443) million and $169 million, and ($1,398) million and
$747 million during the first nine months of 2008 and 2007,
respectively.

"The financial turmoil has made it clear to all Danes that there is
both a political and economic cost of staying out of the eurozone
and that's why we should join it as soon as possible,

"Als wir vor 20 Jahren kauften, sagte uns niemand, dass hier etwas
illegal sei. Unsere gesamten Ersparnisse stecken in dieser Wohnung",
klagt Vivian. Eine Entschädigung sieht das Gesetz zumeist nicht vor,
auch der Weiterverkauf der bedrohten Immobilien ist strikt untersagt.