US Lawmakers battle to save bailout deal
September 27, 2008 - 7:55AMUS lawmakers have grappled to set aside political divisions and the distractions of the White House race to hammer out a $US700 billion ($A839.53 billion) Wall Street bailout and reassure jittery markets.
Regrouping after fractious late night talks, the Senate's Democratic majority leader, Harry Reid, vowed Congress would stay in session, and not adjourn as planned on Friday ahead of the November 4 elections, until the unprecedented economic package is agreed.
But stock markets, nervously watching the protracted week-long congressional talks, took another battering as investors remained unconvinced by pledges that a deal was in the works from lawmakers and President George W Bush.
Bush early on Friday urged all sides to work together, after convening talks on Thursday at the White House where a putative deal collapsed in the face of the revolt from his own party in Congress.
"The legislative process is sometimes not very pretty, but we are going to get a package passed. We will rise to the occasion, Republicans and Democrats will come together and pass a substantial rescue plan," Bush said in a televised statement.
Reid vowed lawmakers would work through the weekend to try to put something in place before markets open again on Monday.
"We're going to get this done and stay in session as long as it takes to get it done. We'll work with the president, modify his plan to make it better for taxpayers and homeowners," he said.
He added there was no reason why a deal could not be reached before Monday, as four lawmakers - two from each party representing the House and the Senate - were left to handle the nitty-gritty of the negotiations.
Reid blamed the Republicans for delaying tactics.
A deal was almost there on Thursday "and then guess who came to town", Reid told reporters after Republican White House hopeful John McCain had dashed back to Washington, putting his campaign on hold to take part in crisis talks.
"The insertion of presidential politics has not been helpful. It's been harmful," the Democrat said.
Senior Republicans, however, defended McCain's role as they presented a rival package designed to take the burden off taxpayers and put it back on private investors.
"I think McCain's role has been entirely constructive. He's had suggestions. We're taking these into account and we are going forward," said Senate minority leader Mitch McConnell.
The McCain campaign said there had been no deal until the Arizona senator arrived in Washington to bring lawmakers together, and that now he was optimistic that there had been significant progress.
"Both parties in both houses of Congress and the administration needed to come together to find a solution that would deserve the trust of the American people," the campaign said in a statement.
"And while there were attempts to do that, much of yesterday (Thursday) was spent fighting over who would get the credit for a deal and who would get the blame for failure."
McCain later headed for the first presidential debate of the US general elections in Oxford, Mississippi, against Democratic White House hopeful Barack Obama.
Overnight there was more bad news for the economy as the savings and loan giant Washington Mutual collapsed, closed by the government and sold to JPMorgan Chase for $US1.9 billion ($A2.28 billion), the largest bank failure in US history.
The new Republican plan proposes that the government set up an expanded insurance system financed by banks to rescue individual home mortgages, so that taxpayers do not have to fund the bailout.
In a letter to Democratic House of Representatives Speaker Nancy Pelosi, House Republican leader John Boehner said the alternative proposal "reflects the core free-market, pro-taxpayer principles of our party".
But Treasury Secretary Henry Paulson and Federal Reserve chairman Ben Bernanke have already rejected the insurance plan as unworkable, and say only the government has the clout to execute the system-wide rescue.
© 2008 AFPhttp://news.smh.com.au/world/us-lawmakers-battle-to-save-bailout-deal-20080927-4p1c.htmlQueen to ask for more money to run Buckingham Palace
Rebecca English
September 27, 2008 12:00amQUEEN Elizabeth II plans to ask the UK Government for more money to run her household after being hit by rising costs, officials have confirmed.
Like homeowners across Britain, the monarch has faced escalating prices for fuel, food and home repairs.
These have seen the cost of maintaining her position as head of state almost double.
But her taxpayer-funded Civil List payment of 7.9 million pounds has not increased in 20 years - and is not due to be renegotiated until 2010.
The shortfall has left what has been described as a "black hole" in Buckingham Palace's accounts of several million pounds each year and led to claims that the Queen will be unable to balance her books if she is not awarded extra funding within the next three years.
Senior officials have firmly denied the Queen is facing a "cash crisis" but confirmed this week that they would have to ask for an increase in Civil List funding.
A royal spokeswoman said there was nothing that could "remotely be described as a black hole in the books" and rejected the claim the Queen would face ruin without government intervention.
"We are never complacent, but we have managed our finances well and are ahead of the game at this point," she said. "When the time comes we will, of course, be hoping for an increase - after all, there are few people in the country who haven't had a pay rise for 20 years."
Officials said the Queen's accountants had squirrelled away 35 million pounds for a rainy day. Although this is down to 26 million pounds, aides claim there is enough in the pot to "draw down from" until they are able to re-negotiate their government hand-out.
"Like so many we have been hit by rising costs, but fortunately our reserves adequately cover the extra expenditure we are now facing," a Buckingham Palace spokesman said.
"We will have enough money to keep going until we can open negotiations about a new Civil List payment."
The Queen receives the majority of her funding through the Civil List as well as "grants in aid" for the upkeep of palaces and travel. She also benefits from a portfolio of investments managed by the Duchy of Lancaster.
About 70 per cent of her Civil List revenue is spent on staff salaries. The rest goes on entertaining.
The current figure of 7.9 million pounds a year was agreed in 1990 and Tony Blair's government refused to sanction an increase 10 years later.
The Treasury would not be drawn yesterday on whether the payment would be increased.
Whitehall sources privately argue, however, that there is simply not enough money to go round.
It is also understood that the Queen's Keeper of the Privy Purse, Sir Alan Reid, has asked the Government for VAT exemption on payment for services such as building works in line with government departments.
Two senior MPs who sit on the Public Accounts Committee insisted they had no sympathy for the Queen's plight and called for the Royal Household's accounts to be publicly audited in the same way as government departments.
http://www.news.com.au/couriermail/story/0,23739,24407222-952,00.htmlFrom Main Street to Skid Row
September 27, 2008When the piper of gloom demands repayment for excesses, the American dream turns to a nightmare, writes Gerard Wright.
Advertisement
M ark Ancona is an environmental remediation specialist, a bloke who tears things down - carefully. A couple of months ago, he drove into a lush and relatively isolated area in Palm Beach County, Florida, to inspect a warehouse his company was contracted to demolish.
When Ancona entered the dilapidated, long-abandoned warehouse - its windows broken, the roof sagged and leaking - he was confronted by a parable of modern America. Thirty people - seven families - were living in the dankness. One man, in his mid-30s, told Ancona: "Six months ago, I was buying $5 coffees at Starbucks. Now I'm tearing pages off the Yellow Pages to use as toilet paper."
The poor have always been among us. In Los Angeles, 90,000 downtown homeless are an everyday sight. What is different now is the sudden poverty washing over what was once the middle class, the bedrock of the US economy and the very embodiment of the American dream. Last-resort cheap motel rooms; lies to educators so that children get to stay at the chosen school by subverting the strict residency rules.
Welcome to the new America, the land of buy now, pay later, where the size 32 belt must now fit the size 40 waist that never knew anything but good times, easy money, and abundant choice - the NINA loan (no income-no asset), the pick-a-payment mortgage, where you decided the size of the first instalment. It's not just an implosion of Wall Street banks and insurance companies, but a sudden unravelling of lives. "This is an American nightmare," says a Democrat congressman, Keith Ellison. Seven million American mortgagors face foreclosure. Another five million have no equity in their homes, or owe more than their homes are worth. Fifteen per cent of Americans - 46 million people - are without health insurance. Personal bankruptcies are up by 47 per cent in a year.
FO MORE....
http://www.smh.com.au/news/wor.....ullpage#contentSwap1Down and out in London
September 27, 2008 World focus may be on the US financial meltdown but Britain is taking a hit, too. Robert Wainwright and Paola Totaro report from London.
It was evening, Black Monday September 15, and the financial world was reeling over the news of Lehman Brothers' collapse. Damien Hirst, the enfant terrible turned billionaire of the British art world, was ensconced in the exclusive Groucho Club, playing snooker with a couple of mates. At the club - one of London's best-known haunts of the creative and the filthy rich - Hirst was seen stepping away regularly from his group, which included Rolling Stones guitarist Ronnie Wood.
Trademark geek glasses squared firmly on his nose, Hirst spoke intently into his mobile phone as barely a kilometre away in Mayfair the first of 223 lots of his work went under the auctioneer's hammer at Sotheby's.
That night, London witnessed a bath of such extraordinary excess that it is bound to enter the annals of the City's economic and cultural history.
Amid front-page headlines of Lehman's collapse and the inevitable spread of the economic meltdown from the US to Europe, London also awoke to the news that Hirst's work had yielded a staggering £111 million ($245 million) for 218 pieces, among them his signature butterflies and dot works.
The most expensive ones bore the most telling titles - The Golden Calf, The Kingdom and Fragments of Paradise - and Oh S hit, which fetched £2.3 million and featured a Merrill Lynch employee suspended in a tank of formaldehyde.
FOR MORE....
http://business.smh.com.au/bus.....ullpage#contentSwap1 
Logged
