<TABLE cellSpacing=0 cellPadding=0 width=596 border=0><TBODY><TR><TD colSpan=3 height=26></TD></TR><TR><TD vAlign=top width=5> </TD><TD vAlign=top width=591 colSpan=2>Finance fallout brings job losses, backlash against bankers
Posted: 18 October 2008 0633 hrs
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Investors chat at a private securities company in Shanghai.</TD></TR><TR><TD> </TD><TD class=update> </TD></TR><TR><TD> </TD><TD></TD></TR></TBODY></TABLE>
WASHINGTON : Fallout from the financial crisis grew Friday as fresh job losses were blamed on the turmoil and bank chiefs faced a backlash, while stocks closed a tumultuous week with more wild swings.
In the United States, markets were reminded of the root of the problem as data showed construction starts on new US homes slumped an additional 6.3 percent in September to the lowest level since the recession in 1991.
Housing starts fell to an annualized rate of 817,000. That was down 31.1 percent from a year ago in the latest evidence of the bursting of the housing bubble that has ravaged the US economy and led to the global financial crisis.
In Europe, Swedish plane maker Saab said it would cut 500 jobs over two years after announcing heavy losses. Unemployment has grown across Europe with key sectors such as car-makers badly hit as the downturn gathers pace.
Chinese toy maker Smart Union, heavily reliant on the US market, announced it has gone bust due to the financial crisis, leaving up to 7,000 people jobless.
The firm closed its factories in southern China this week, leaving unpaid workers stranded outside the plants and leading to government concerns about protests.
The world's largest steelmaker, ArcelorMittal, said it was cutting production and could ultimately reduce output by as much as 15 percent because of weakening demand.
US-based General Motors on Thursday announced a cut of 1,600 jobs as it slashes production in the face of a sharp drop in sales.
The finance industry's reputation took a new blow as France's Caisse d'Epargne bank said it lost about 600 million euros (800 million dollars) in a trading "incident."
A company official, speaking on condition of anonymity, told AFP that a group finance director had been sacked over the loss.
Josef Ackermann, head of Deutsche Bank, Germany's biggest bank, said he will give up his annual bonus of several million euros to show "solidarity" with staff.
But Swiss newspapers angrily called on former top managers of banking giant UBS to return bonuses after the bank had to be rescued by the state.
"Mr. Ospel, pay back your bonus! Now! Immediately!" screamed the front page of tabloid Blick, referring to former UBS chairman Marcel Ospel, who was forced to resign this year over billions in losses in the US subprime mortgage crisis.
Ukraine said it was negotiating a 14-billion-dollar emergency loan with the International Monetary Fund and Argentina announced it had struck a deal with three foreign banks to renegotiate part of its 150-billion-dollar sovereign debt mountain.
Both houses of the German parliament approved the government's rescue package for the financial sector. But 99 deputies voted against and Greens parliamentary chief Renate Kuenast said the proposals were a blank check for banks which could not be held accountable by taxpayers.
Luxembourg joined the scramble to strengthen bank deposit guarantees. The banking principality increased its guarantee from 20,000 euros to 100,000.
French President Nicolas Sarkozy said on arriving in Canada that a summit of world leaders on the crisis was likely to take place before the end of the year. Sarkozy was due in the United States for talks Saturday with President George W. Bush.
British Prime Minister Gordon Brown said in a newspaper column that the financial crisis was a "defining moment" for the world economy and renewed his call for revamped global institutions.
"The old post-war international financial institutions are out of date," he wrote in The Washington Post. "They have to be rebuilt for a wholly new era in which there is global, not national, competition and open, not closed, economies."
Andres Carbacho-Burgos at Economy.com said the latest data on home construction showed the housing market is still looking for a bottom after an unprecedented meltdown.
"With the nation's financial crisis resulting in tighter credit across the board, housing construction will see at least another month of declining activity before picking up," he said.
Global stock markets remained choppy after wild swings in the past week, but most were firm as some analysts said there was evidence of a "bottom" from the market meltdown of the past few weeks.
Kevin Giddis, analyst at Morgan Keegan, said some of the efforts by governments including the 700-billion-dollar US rescue plan appear to be paying off, and that a recovery could be coming.
"There are a number of good happenings in the market," Giddis said. He noted that Libor rates for interbank loans, one of the key markets frozen in the credit crisis, are falling, and that commercial paper for corporate funding appears to be coming back.
This means investors are gaining a bit of confidence and moving out of extremely safe asset like US Treasury bills, a positive sign for the market.
The London FTSE 100 index surged 5.22 percent, the Paris CAC 40 added 4.68 percent and the Frankfurt Dax finished 3.43 percent up.
Wall Street opened weaker but was back in positive territory in late trade, with the Dow index up 1.02 percent an hour ahead of the close.
Tokyo's Nikkei index finished a volatile week -- in which it soared a record 14.15 percent on Tuesday and fell more than 11 percent Thursday -- five percent higher.
"We are exhausted with the recent violent swings. Honestly, I want to take a little break," said Masatoshi Sato, a broker at Mizuho Investors Securities.
- AFP /ls
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Posted: 18 October 2008 0633 hrs
<TABLE cellSpacing=0 cellPadding=0 width=260 align=right border=0><TBODY><TR><TD align=right width=20> </TD><TD align=right width=240>
Investors chat at a private securities company in Shanghai.</TD></TR><TR><TD> </TD><TD class=update> </TD></TR><TR><TD> </TD><TD></TD></TR></TBODY></TABLE>
WASHINGTON : Fallout from the financial crisis grew Friday as fresh job losses were blamed on the turmoil and bank chiefs faced a backlash, while stocks closed a tumultuous week with more wild swings.
In the United States, markets were reminded of the root of the problem as data showed construction starts on new US homes slumped an additional 6.3 percent in September to the lowest level since the recession in 1991.
Housing starts fell to an annualized rate of 817,000. That was down 31.1 percent from a year ago in the latest evidence of the bursting of the housing bubble that has ravaged the US economy and led to the global financial crisis.
In Europe, Swedish plane maker Saab said it would cut 500 jobs over two years after announcing heavy losses. Unemployment has grown across Europe with key sectors such as car-makers badly hit as the downturn gathers pace.
Chinese toy maker Smart Union, heavily reliant on the US market, announced it has gone bust due to the financial crisis, leaving up to 7,000 people jobless.
The firm closed its factories in southern China this week, leaving unpaid workers stranded outside the plants and leading to government concerns about protests.
The world's largest steelmaker, ArcelorMittal, said it was cutting production and could ultimately reduce output by as much as 15 percent because of weakening demand.
US-based General Motors on Thursday announced a cut of 1,600 jobs as it slashes production in the face of a sharp drop in sales.
The finance industry's reputation took a new blow as France's Caisse d'Epargne bank said it lost about 600 million euros (800 million dollars) in a trading "incident."
A company official, speaking on condition of anonymity, told AFP that a group finance director had been sacked over the loss.
Josef Ackermann, head of Deutsche Bank, Germany's biggest bank, said he will give up his annual bonus of several million euros to show "solidarity" with staff.
But Swiss newspapers angrily called on former top managers of banking giant UBS to return bonuses after the bank had to be rescued by the state.
"Mr. Ospel, pay back your bonus! Now! Immediately!" screamed the front page of tabloid Blick, referring to former UBS chairman Marcel Ospel, who was forced to resign this year over billions in losses in the US subprime mortgage crisis.
Ukraine said it was negotiating a 14-billion-dollar emergency loan with the International Monetary Fund and Argentina announced it had struck a deal with three foreign banks to renegotiate part of its 150-billion-dollar sovereign debt mountain.
Both houses of the German parliament approved the government's rescue package for the financial sector. But 99 deputies voted against and Greens parliamentary chief Renate Kuenast said the proposals were a blank check for banks which could not be held accountable by taxpayers.
Luxembourg joined the scramble to strengthen bank deposit guarantees. The banking principality increased its guarantee from 20,000 euros to 100,000.
French President Nicolas Sarkozy said on arriving in Canada that a summit of world leaders on the crisis was likely to take place before the end of the year. Sarkozy was due in the United States for talks Saturday with President George W. Bush.
British Prime Minister Gordon Brown said in a newspaper column that the financial crisis was a "defining moment" for the world economy and renewed his call for revamped global institutions.
"The old post-war international financial institutions are out of date," he wrote in The Washington Post. "They have to be rebuilt for a wholly new era in which there is global, not national, competition and open, not closed, economies."
Andres Carbacho-Burgos at Economy.com said the latest data on home construction showed the housing market is still looking for a bottom after an unprecedented meltdown.
"With the nation's financial crisis resulting in tighter credit across the board, housing construction will see at least another month of declining activity before picking up," he said.
Global stock markets remained choppy after wild swings in the past week, but most were firm as some analysts said there was evidence of a "bottom" from the market meltdown of the past few weeks.
Kevin Giddis, analyst at Morgan Keegan, said some of the efforts by governments including the 700-billion-dollar US rescue plan appear to be paying off, and that a recovery could be coming.
"There are a number of good happenings in the market," Giddis said. He noted that Libor rates for interbank loans, one of the key markets frozen in the credit crisis, are falling, and that commercial paper for corporate funding appears to be coming back.
This means investors are gaining a bit of confidence and moving out of extremely safe asset like US Treasury bills, a positive sign for the market.
The London FTSE 100 index surged 5.22 percent, the Paris CAC 40 added 4.68 percent and the Frankfurt Dax finished 3.43 percent up.
Wall Street opened weaker but was back in positive territory in late trade, with the Dow index up 1.02 percent an hour ahead of the close.
Tokyo's Nikkei index finished a volatile week -- in which it soared a record 14.15 percent on Tuesday and fell more than 11 percent Thursday -- five percent higher.
"We are exhausted with the recent violent swings. Honestly, I want to take a little break," said Masatoshi Sato, a broker at Mizuho Investors Securities.
- AFP /ls
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