Microsoft's CEO, Steve Balmer: "Microsoft is as much an Israeli company as an American company, because of the importance of its Israeli technologies..." (Wall St. Journal, Nov. 23m 2009). Microsoft's Israeli acquisitions: Gteko (2006 - $120MN), Kidaro (2008 - $100MN), Whale (2006 - $76MN), Peach (2000 - $72MN), Zoomix (2008 - $30MN), YaData (2008 - $25MN), Olap Technologies (1996 - $20MN), MaxiMal (2001 - $20MN), Felican (2003 - $800,000), WebPoint - unavailable, Secured Dimension - unavailable) - Globes, June 29, 2010.

"Solar has become a real industry"...After 30-plus years of steady improvement, solar electric technology is going mainstream. Photovoltaic (PV) panels, which convert sunlight directly into electricity, can increasingly be found on residential rooftops, warehouses, and Wal-Marts. Large-scale photovoltaic solar farms cover huge swaths of land to supply utilities with clean power. Entrepreneurs have also invested in solar thermal farms, where the sun's heat turns liquid into steam to drive a turbine. ...

The New York Times has put together two great maps contrasting American metropolitan areas "growing" versus those "in trouble."

Rather than me babbling about the causes for cities' success or decline, I'm interested in Viners' input on the current national economic situation. What would be great to read and share with other Viners are personal experiences, interpretations, economic theories, and -- of course:

1. proposed solutions for the troubled areas, and how people can be helped equitably, without leaving out any segments of the population; and,
2. how successful cities can engage in sustainable, equitable, and environmentally-friendly prosperity.

Please vote in the poll, too.

Click here to view the maps on the Times website.

NOTE: I used the "Write Article" format so I could show the maps and set up an opinion poll.

From today's levels, what can we expect? Stocks' future return is closely related to the inverse of the P/E, also known as the earnings yield. So at a P/E of less than 16, investors should obtain real, or inflation-adjusted, gains of around 6.5%, which is about what Asness found in his research. Add 2.5 points for inflation, and the nominal return comes to a respectable 9%. That's about a point below stocks' long-run return, but it's far better than anything investors could expect for a decade and a half. ...

Something has gone very wrong at eBay...Seeing eBay project eroding revenues in what should be a seasonally strong Q4 says much about just how bad this year's holiday shopping season could be. But it also says something fundamental about how eBay's core marketplace has somehow lost its mojo; changes in its fee structure have alienated sellers, some of whom have defected for other services. The company has a host of efforts underway to revive the fortunes of its main offering, a process that would be difficult even in a normal economy. Trying to turn around amid a nasty recession is going to prove especially daunting. ...

The overnight Libor rate fell to 1.51% from 1.67% Friday, according to Bloomberg.com. Libor is a daily average of what 16 different banks charge other banks to lend money in London and is used to calculate adjustable rate mortgages. The higher the rate, the tougher it could be for homeowners to pay those mortgages.

For the first time in more than a month, the overnight bank lending rate is at about the rate that the federal banks charge banks - a sign that credit markets are returning to normalcy. The federal funds rate is at 1.5%. ...

In this market, other forms of emission-free power generation should be given equal treatment. Why should the nuke builders get such massive loan guarantees while a wind, solar or geothermal developer trying to raise debt capital in a difficult market doesn't?

A broad measure of the economy's health rose unexpectedly in September after declining for two consecutive months, the Conference Board announced Monday.

In August, the index fell a revised 0.9% after a 0.7% decline in July. ...

This is a once-in-a-species opportunity. The global architecture necessary to produce a trading scheme is already being built. Whatever allocation of GHG [green-house gas] emissions rights is eventually chosen will require a system for reporting, monitoring, and trading that could easily accommodate additional permit variations along the lines of our proposal. Consumers have moral sentiments about climate change. They just need a hand expressing them.

"A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful," said Buffett. "And most certainly, fear is now widespread, gripping even seasoned investors."

Levitt acknowledged that in 1998, he opposed imposing rules on a type of obscure and extremely complicated financial instrument - known as credit default swaps - that are increasingly being blamed for igniting the crisis. He instead called at the time for establishing a clearing facility to keep better track of the swaps, but didn't seek to mandate one. ...

"Your company is now bankrupt and out country is in a state of crisis...You get to keep $480m. I have a very basic question - is that fair? Is that fair, for a CEO of a company that's now bankrupt, to make that kind of money? It's just unimaginable to so many people." ...

We are in a vicious cycle: falling housing values cause losses on securities, which reduce bank capital, thereby tightening lending and causing house prices to fall further. The cycle has spread beyond housing, but housing is the place to fix it.

We propose that the Bush administration and Congress allow all residential mortgages on primary residences to be refinanced into 30-year fixed-rate mortgages at 5.25% (matching the lowest mortgage rate in the past 30 years), and place those mortgages with Fannie Mae and Freddie Mac. Investors and speculators should not be allowed to qualify. ...

Regalia expects unemployment to reach 6.5% by the end of the first quarter next year, and 7% if nothing is done by the government to free up the capital markets. While the economy may stop shedding jobs at that point, he said those stubbornly high rates of unemployment could persist until the end of 2009. ...

"If we don't have measures to correct the situation, we will see more [job] losses," said Joyce Bastoli, a vice president at Ajilon Finance Solutions, part of the staffing company Adecco. "If companies don't have access to capital, we will see it trickle down." ...

The financial crisis has put a spotlight on the obscure world of credit default swaps - which trade in a vast, unregulated market that most people haven't heard of and even fewer understand. Will this be the next disaster?

In just over a decade these privately traded derivatives contracts have ballooned from nothing into a $54.6 trillion market. CDS are the fastest-growing major type of financial derivatives. More important, they've played a critical role in the unfolding financial crisis. First, by ostensibly providing "insurance" on risky mortgage bonds, they encouraged and enabled reckless behavior during the housing bubble. ...

On Wednesday, the Reserve Fund group's giant Primary Fund—owned by Bruce Bent, the man who invented the business—got stuck with $785 million in worthless commercial paper from the failed investment bank Lehman Brothers. The fund "broke the buck," meaning that each dollar dropped in value to 97 cents. Redemptions were frozen for seven days, but not before $27.3 billion—more than 40 percent of Primary's assets—flew out the door, according to Peter Crane, publisher of Money Fund Intelligence. The Primary Fund didn't return calls.

But many struggling homeowners are asking: "Where's my bailout?"

Here's how the bailout could work: Once the Treasury Department takes hold of the securities, it can review the terms of the underlying loans and the financial shape of each homeowner. The department then could opt to modify the loans - by reducing the interest rate or principal balance - to affordable terms for borrowers. ...

You should be angry about the $700 billion plan to save banks. But once the rage subsides, realize that doing nothing would be disastrous. ...

So once the blind rage subsides, people will hopefully take a long-hard look at what the government has proposed and come to the realization that doing nothing to rid the nation's banks of all the poisonous mortgage assets on their balance sheets would be far far worse. ...

The U.S. Securities and Exchange Commission took what it called "emergency action" Friday and temporarily banned investors from short-selling 799 financial companies.

Short sellers borrow stock with the aim of selling it, then buy it back at a lower price, hoping to pocket the difference. The commission said short sellers add liquidity to the markets during normal conditions, but recent unbridled short-selling has contributed to the recent tailspin in the stock market. ...

Even if consumers have no direct dealings with the now-bankrupt Lehman Brothers or the now-bailed out American International Group, they may very well feel the ripple effects. The most evident impacts are rising mortgage rates and instability in once-safe money market funds. But the tensions on Wall Street will make it even harder for people - even those with good credit - to get a loan. ...

The Federal Reserve has backstopped the purchase of Bear Stearns to the tune of $29 billion. It will loan $85 billion to insurer AIG. It's letting banks borrow up to $150 billion using risky mortgage-backed securities as collateral. And it's letting investment banks, which it doesn't regulate, get short-term loans using the central bank's discount window.

And the government might not be finished. ...

Royalties from the energy industry are an important source of revenue for the U.S. government. But regulatory mismanagement means much goes uncollected, a GAO report finds.

On Wednesday, a report by the Interior Department's Inspector General found MMS staffers in Colorado were having sex and engaging in illegal drug use with employees of some of those oil companies. The investigation also found an MMS supervisor had sex with two subordinates and engaged in illegal drug use with at least one of them. ...

When it came to buying influence in Washington, Freddie Mac and Fannie Mae were among Corporate America's biggest spenders.

"They tied up almost every lobbying firm in Washington, whether they used them or not, over the past several years," said Joshua Rosner, a financial analyst with Graham Fisher & Co. and long-time critic of both companies. ...

The old adage - Nothing in life is free - is the new reality for frequent fliers.

Other airlines have added processing fees, which are paid when frequent flier redeem miles, with larger fees for reclaiming miles after canceling a flight. US Airways (LCC, Fortune 500) has added a processing fee of up to $50 for its frequent fliers, as well as fees for reissuing or redepositing miles of $150 for domestic flights and $250 for international. ...

Automakers seek $50 billion in low-interest loans to convert plants from trucks to fuel efficient cars; presidential election could help their chances.

Plunging auto sales, high gas prices and election year politics could help convince Congress to approve a $50 billion loan package to embattled U.S. automakers that Detroit's Big Three claim is key to their future success. ...

By Chris Isidore, CNNMoney.com senior writer
Last Updated: September 4, 2008: 2:26 PM EDT

[READ ARTICLE]

NOTE: I've seeded this as an article so that I could add an opinion poll for Viners to vote on whether taxpayers should bailout the automakers.

Economists at the University of Michigan said in a report released yesterday that 900,000 jobs will be added next year and that 2.6 million more will be created in 2010.

Joan Crary, an economist with the University of Michigan, said that this forecast is based on a belief that the economy will finally begin to rebound in the second half of 2009.

What credit crunch? Here are 17 ways to get your mitts on some money, ranked from best to worst.

This is a pretty informative article from CNNMoney on cash management, what to do when you need cash, and what not to do when you need cash -- 17 methods with pros and cons for each. Please read through the list and then vote in the poll (right) to get an idea of how frugal or profligate we Viners are. Above all, HAVE FUN VOTING AND COMMENTING!

Here are the methods. Click the link above to see full descriptions of each method as well as the pros and cons.

1. Tap your emergency fund
2. Sell some investments
3. Ask the folks for a gift
4. Bust into a CD early
5. Cash in your whole life insurance policy
6. Borrow from family or friends
7. Take out a home-equity line of credit
8. Do a cash-out mortgage refinancing
9. Borrow from your 401(k) or 403(b) plan
10. Borrow against other investment accounts
11. Borrow from strangers
12. Tap your IRA
13. Do a reverse mortgage
14. Sell some hard assets
15. Take a cash advance on your credit card
16. Liquidate your 401(k) or 403(b) account
17. Go to a payday lender

The Saudi government is planning four new cities to serve its exploding population and make its economy less dependent on oil. ...

Check out these not-too-thirsty vehicles that give you fuel economy without giving up style and value:

• The cool carryall - Scion xB
• The sturdy second car - VW Rabbit Coupe
• The smart family car - Saturn Vue XE
• The roadster - Pontiac Solstice
• The speedster - Chevrolet Corvette Convertible
• The urban hipster - Vespa LX

Americans drove 12.2 billion miles fewer, or 4.7% less, in June than they did during June 2007, according to a report released Wednesday from the U.S. Department of Transportation.

U.S. driving levels have decreased in every month since November 2007. From November to June, Americans drove 53.2 billion miles fewer than they did over the same period last year, the study of more than 4,000 highway traffic recorders showed. ...

Once the epicenter of low-cost manufacturing, China is becoming an increasingly expensive place to do business, thanks to a series of sweeping mandates introduced to pacify discontented Chinese citizens and global critics. This month's Olympics will be a coming out party 10 years in the making. Aware that the world is watching, China has intensified its efforts to clean up its domestic affairs by enacting stricter environmental and labor controls, increasing its land and commodity prices, and slashing the export-tax rebates that helped create the country's giant trade surplus.

Environmentalists, economists and labor watchdogs praise these initiatives as critical steps in the right direction for both China and the global economy. But coupled with the falling dollar and the rising yuan, these movements have put the pinch on many small U.S. outsourcers struggling to keep up with China's rapid changes. ...

Buried within Barack Obama's energy plan is an industrial policy that is even more naïve and disturbing.

Obama says that changing our energy mix requires an economic transformation as well. ...

Some experts fear that GM, Ford and Chrysler - their sales plunging as fewer consumers buy gas-guzzling pickups and SUVs - could be forced to head for bankruptcy.

Last week, General Motors (GM, Fortune 500) reported a $15.5 billion second quarter net loss. While its operating loss was only $6.3 billion, that's still more than the market value of the company. ...

Dell is announcing Wednesday that it has become carbon neutral by turning out the lights in its offices, buying wind power and protecting endangered forests in Madagascar.

But what, exactly, does becoming carbon neutral mean? ...

But falling oil prices also suggest that the recession the U.S. has so far avoided is well on its way, as consumers pull back from the spending spree that drove economic growth earlier this decade. A weakening economy will mean more layoffs, further pressuring already reduced spending.

Perhaps the biggest factor behind the recent 18% drop in the price of a barrel of crude is sinking North American demand. Federal Highway Administration data show the number of miles driven in the U.S. dropped from year-ago levels for the seventh straight month in May. ...

The economy picked up 9,000 new jobs in July, according to ADP, thanks to small companies that are hiring even as larger businesses shed workers.

Small businesses drove much of the employment growth in July, according to a report released Wednesday by payroll manager Automatic Data Processing (ADP, Fortune 500). Firms with fewer than 50 workers added 50,000 new non-farm jobs to the private sector this month, which offset the 41,000 jobs dropped at medium and large companies. ...

Many of these commuters are flocking to trains, buses and bikes, or telecommuting from home....

Peters said that in the first four months of this year, Americans traveled 40.5 billion miles less compared with the same period in 2007. She said the decline in usage means less tax revenue for highway system. ...

U.S. companies and workers have received billions annually from exporting to Israel. Here's an annual list of U.S. exports to Israel in thousands ($ USD):

1989: $2,830,710 (that's $2.8 BILLION)
1990: $3,200,294
1991: $3,856,244
1992: $4,074,156
1993: $4,420,242
1994: $5,006,026
1995: $5,593,246
1996: $6,009,016
1997: $5,992,499
1998: $6,977,485
1999: $7,694,496
2000: $7,750,345
2001: $7,482,324
2002: $7,039,342
2003: $6,878,432
2004: $9,197,969
2005: $9,731,902 (that's $9.7 BILLION)
2006: $10,964,429 (that's $11 BILLION)
2007: $13,018,927 (that's $13 BILLION)

Go to the US Dept of Commerce TradeStats Express - National Trade Data site and configure for "Israel," "Exports," 1989 - 2007.

http://tse.export.gov/

In a sign that solar industry and its political allies are starting to flex some real power, the federal government reversed course Wednesday and announced it would continue to accept new applications to build solar power plants on government land while developing an environmental policy for assessing the projects. ...

Nations face off in race to exploit Arctic oil and gas, undeterred by the environmental concerns.

(Video)

Here's a suggestion: The next time a Congressional committee wants to hold a hearing on how "speculators" are driving up oil prices, each committee member should first be required to demonstrate - preferably in their opening remarks - a basic understanding of the mechanics of futures trading.

If there were such a requirement, I guarantee we'd never again see a circus like the one [U.S. Rep. Bart] Stupak presided over Monday. ...

The U.S. Supreme Court's decision Wednesday slashing the damages Exxon Mobil (XOM) must pay as a result of the 1989 Exxon Valdez oil spill could have unexpectedly wide-ranging consequences. An award to Alaskan fishermen and other residents was reduced from $2.5 billion to about $500 million.

In its ruling, the high court grapples once more with an issue that has long dogged corporate America and its adversaries: at what point is a verdict that's meant to punish a defendant and deter future wrongdoing — rather than to compensate the plaintiff for his actual damages — excessive? In one the best-known cases, the Supreme Court in 1996 struck down a $2 million punitive-damages award over a $4,000 BMW paint job. ...

entrepreneurs are tapping into what could be the biggest economic opportunity of the 21st century: clean, money-saving technology. ...

- Electrifying rides
- A low-energy lifestyle
- Making solar pay
- Algae power ...

One commuter route has seen passenger loads more than double in the past couple months.

"Our bigger increases have been in the commuter routes, and they have been over the last couple of months vs. the first part of the fiscal year," said Art Martinez, a Transit Department spokesman. "We were definitely seeing steady growth, but we're seeing spikes in the last couple of months." ...

Israeli Prime Minister Ehud Olmert met with New Mexico Governor Bill Richardson, a former diplomat and presidential candidate.

In March, New Mexico's trade office helped facilitate a multimillion dollar contract between Albuquerque-based Lumidigm Inc., a biometrics company, and BioGuard Components and Technologies Ltd. based in Israel to produce biometric security sensors. ...

The first [phone] is the W510 which is made out of a corn-based bioplastic and doesn't contain any heavy metals, like lead, mercury and cadmium. ...

Samsung has actually ranked very high for being a responsible and planet-loving consumer electronics maker. ...

San Joaquin Solar 1 and 2 will be built on private land outside the farming town of Coalinga. They will use long arrays of curved mirrors called solar troughs to focus the sun on liquid-filled tubes to produce steam that will drive electricity-generating turbines. That's a standard solar technology currently operating in California and elsewhere. The biomass component of the plant will use agricultural waste, green waste and livestock manure to create heat that will generate steam.

environmental advocates argue that if more people start taking personal action, corporations and governments will follow. ...

"We just basically stop before we consume and think," she says. ...

High-flying tech stocks crashed. The roaring housing market crumbled. And oil, rest assured, will follow the same path down.

But rather than forming a permanent new plateau for prices - as the bulls contend - those forces are causing a classically unstable market that's destined for a steep fall. ...

Consumer Reports selected these cars with very specific criteria in mind: None are more than 10 years old, and the decision was based entirely on fuel economy and reliability. That doesn't mean they're all dream cars though. ...

2001 - '03 Toyota Prius
MPG: 41
Estimated cost: $6,700 - $13,225 ...

the plant-closing plans are a stunning admission from the nation's largest automaker that its long dependence on large SUVs and pickups is no longer a viable strategy for a company struggling to end losses from its North American operations. ...

GM is looking at possibly selling its Hummer unit as part of a strategic review of the SUV brand based on military vehicles. The Hummer H3 mid-size SUV gets about 13 to 14 miles per gallon in city driving in the most recent EPA ratings. The H1 and H2 are larger vehicles on which EPA does not give mileage estimates. ...

"I've heard every joke about charging for the air sickness bag and charging for the toilets," said David Stempler, president of the Air Travelers Association, a passenger advocate group.

"Anything that's free, they might want to attach a charge to it so they can monetize it," he said. "The sky's the limit for charging for things, since you have a captive audience and no real competition."

Not only has scouring the Web for the best possible price become standard protocol before buying a big-ticket item, but more consumers are employing creative strategies for scoring hot deals on everything from stereos to sweat pants.

Coupon craze
Swapping online coupons or discount codes is one quick way to score a reduced price. Often simply applying the right coupon or promotion code during the online payment process can mean a savings of 10% to 30% or at least free shipping. ...

Despite rumblings of potential mergers, the future of the beverage is much more light than dark.

Economic theory suggests that the future price is simply traders' best guess of the shape of things to come. And traders seem to be very worried about the future. They recently pushed up the price of oil to be delivered at the end of 2016 to over $145 a barrel.

They seem to be motivated by the sobering realities of supply and demand, rather than reckless speculation. The output of several big oil exporters, such as Russia, Mexico and Venezuela, is declining. Yet none of those countries allows foreign investors unfettered access to develop new fields or increase production from existing ones. Many of the most promising areas for exploration, including Saudi Arabia, Iraq and Iran, are in effect off-limits to Western oil firms. Worse, the cost of developing new fields is rising almost as fast as the oil price. Cambridge Energy Research Associates, a consulting firm, believes it has more than doubled since 2000.

The modest increase in April [LEI up 0.1% to 102] sends signs that the economy is sputtering forward, if still sluggish. March was the first month that the index increased, following five consecutive monthly declines.

With gasoline prices hitting record levels, it seems everyone has a tip on how to save fuel. Much of the advice is well-intentioned, but in the end, much of it won't lower your gas bill. ...

Cash-strapped drinkers are starting to trade down to economy beers, the chief executive of Miller Brewing Co. said Thursday. ...

"We think it's primarily driven by decline of disposable income and pocket money that American consumers are feeling right now," he said. ...

Selling a home is a lot trickier than it used to be - here's how to be smart about pricing, presentation and incentives. ...

Rule 1: Get real about price
Rule 2: Vet your agent - especially if it's you
Rule 3: Pimp your house - hire a home stager
Rule 4: Cash will make your home look even better
Rule 5: Underwater? Learn to swim...

Note: see companion story "5 new rules for home buyers"

Now, in a radical move, the city [Youngstown, OH] - which has suffered since the steel industry left town and jobs dried up - is bulldozing abandoned buildings, tearing up blighted streets and converting entire blocks into open green spaces. More than 1,000 structures have been demolished so far.

Which explains why a Jewish-American entrepreneur named Ronald Bruder is in Jabal Natheef, putting a veiled Jordanian woman through a mock job interview. Alaa Al Hagesa is 21 years old. She studies religion at a local university, and her only previous work experience was teaching small children to read the Quran.

"Why should we hire you?" Bruder asks. Al Hagesa sits straight up in her chair. "I am the perfect!" she replies in broken English, speaking through the thick black fabric that shrouds her face. "I have good grades in university. I can deliver!" ...

The Federal Reserve is taking on mortgage-backed securities and other investments as part of its $29 billion rescue of Bear Stearns, a government official confirmed in a letter to Congress.

The Federal Reserve Bank of New York's loan to JPMorgan Chase & Co. (JPM, Fortune 500), which has proposed to buy Bear Stearns Cos. (BSC, Fortune 500) in a government-engineered plan, is being secured by a "pool of assets consisting primarily of mortgage backed securities and related hedge investments," said the March 28 letter by Kevin Fromer, the Treasury Department's assistant secretary for legislative affairs. ...

Wondering how Lehman Brothers staved off the panic that brought down Bear Stearns last month? Here's a clue: While former Bear Stearns chief Jimmy Cayne was off playing bridge, Lehman Brothers was busy putting together a hand that allowed the firm to trump bearish investors when the market turned. ...

"Is it better to let Bear Stearns fail and risk setting off a market collapse that costs a million jobs?" The answer, of course, is no. Bear had about $13 trillion of derivatives deals with counterparties, according to its most recent financial filings. If Bear had croaked, large parts of the world could have croaked. And the economic damage could have been catastrophic.

Bear Stearns Cos. Chairman James Cayne dumped his entire stake in the embattled investment bank for $61 million as it appears closer to a takeover by JPMorgan Chase & Co.

Cayne sold 5.66 million shares for exactly $10.84 a share on March 25, according to a filing with the Securities and Exchange Commission. His stake was once valued at about $1 billion when the stock was trading at $171.50 per share.

The filing was disclosed Thursday.

His stake at one point plunged to about $27 million when JPMorgan announced nearly two weeks ago it would acquire the No. 5 U.S. investment bank for $2 per share. JPMorgan later upped that offer to $10 per share, and agreed to acquire 39.5 percent of the company without a shareholder vote to block any rival offers.

On Thursday, Bear Stearns Chief Executive Alan Schwartz said in a letter filed to the SEC that the company will issue 95 million shares to JPMorgan within the next 10 days as part of the takeover deal. He said the latest agreement was "essential to maintaining the company's financial stability."

In addition, Schwartz said Bear Stearns is able to bypass shareholder approval because "securing stockholder approval would seriously jeopardize the financial viability" of the company. About one-third of the company's shares are owned by Bear Stearns' 14,000 employees.

Cayne, who serves as non-executive chairman, was said to be unhappy about the deal struck to sell the company he worked at for most of his life. He served as chief executive for 15 years until January, when he stepped down after Bear Stearns announced its first loss since being founded 85 years ago.

There has been some speculation that Cayne might join forces with Joseph Lewis, a billionaire financier who owns about 12 percent of the company. Lewis has expressed his interest in blocking a deal many considered to be hastily arranged, and one which severely undervalues Bear Stearns.

Both have recently tried to recruit investors to counter the JPMorgan offer, according to a report in the New York Post last week.

A spokesman for Lewis could not be reached for comment. And, spokesmen for JPMorgan and Bear Stearns declined to comment.

Bear Stearns shares rose 2 cents to $11.23 in trading Thursday. However, the stock fell more than 5 percent in after-hours trading. JPMorgan shares fell $1.25 to $42.86.

The Fed's role in the deal suggests federal officials fear a systemic collapse of the U.S. financial system were Bear Stearns to fail. The fear stems from Bear central role in a multitrillion-dollar web of interconnecting derivative contracts.

... But Molinaro also admitted that Bear Stearns was in dire straits Thursday night, after some firms that trade with it - fearful about rumors of a liquidity squeeze at Bear Stearns - "no longer wanted to provide financing." ...

All told, the combined funds of the UAE, Saudi Arabia, Kuwait, and Qatar account for more than half the $2.5 trillion total assets of global SWFs. According to the Saudi economic newspaper Al-Iqtisadiya, the assets managed by the Persian Gulf SWFs are equal to one fifth of the total assets of the central banks of countries with SWFs, an amount estimated at $5.3 trillion.[12] The global total of sovereign funds could reach $12 trillion by 2015 as a result of further oil revenues and capital appreciation...

Western governments remain concerned that foreign interests may take over economic assets with strategic value, be they manufacturing plants, banks, industrial enterprises, or high-tech companies. From a Washington standpoint, for example, there is a major difference between a Saudi acquisition of General Electric's plastics plants and a Saudi purchase of its aircraft engine unit. Several investments have raised U.S. and European concern about possible hidden political agendas. ...

Countries are finally realizing that their future prosperity depends not on natural resources or even on financial capital, but on human capital. Companies have been battling for years to attract and keep the best people. Now countries are engaging in the same fight.

There's just one way for equities to get their lustre back -- their prices have to fall substantially so that investors can harvest attractive returns from the modest profit growth that's in the cards. Like the biblical sheik who hastens to Samarra to escape death, only to find death waiting for him there, stocks have an inescapable appointment with a withering fate.

What we are witnessing is essentially the breakdown of our modern-day banking system, a complex of leveraged lending so hard to understand that Federal Reserve chairman Ben Bernanke required a face-to-face refresher course from hedge fund managers in mid-August.

Fareed Zakaria this week claimed that foreign tourists "are filled with horror stories about the inconvenience and indignity of traveling to America." Really? Maybe Zakaria should've waited to see Black Friday in New York today before making such sweeping pronouncements. From CNNMoney.com:

... Walking around midtown Manhattan on Black Friday, you heard shoppers speaking in a smorgasbord of languages.

With the U.S. dollar as weak as it is - the greenback hit a new low against the euro on Friday - it appears that many Europeans flocked to the Big Apple to go bargain hunting, to the delight of retailers.

Sarah T., who works at the information booth in the Manhattan Mall, which includes stores such as Aeropostale (Charts), Radio Shack (Charts, Fortune 500) and Charlotte Russe (Charts), said that overall traffic during the morning of Black Friday was about the same as last year but that there were far more many tourists at the mall than a year ago. And she said many of them were leaving with armfuls of bags. ...

"We are definitely seeing an influx of European, Canadian and South American consumers," said Terry Lundgren, the chairman and CEO of Macy's Inc (Charts, Fortune 500). "These economies view the dollar as being on sale."

Lundgren said that, in addition to the company's flagship Macy's, the Bloomingdale's stores on 59th Street and in SoHo in Manhattan were both experiencing a boost from tourists, as were Macy's locations in Chicago and San Francisco. ...

As evidence of America's evil plot to scare away tourists, Zakaria dug up a couple of incidents involving travelers who "commit[ed] minor infractions." Ah, they violated their visas (poor things). What would Zakaria have us do, ignore immigration violations? So we have two cases in a nation of 300,000,000, where most citizens have ties to other countries; so what?

As evidence of the negative feelings supposedly harbored by visitors to the U.S., Fareed tells us to "read the polls or any travelogue on a British Web site" without mentioning any specific poll or website. He's not even clear that tourism to America is dropping:

... The number of Japanese visiting the United States declined from 5 million in 2000 to 3.6 million last year. The numbers have begun to increase, but by 2010 they're still projected to be 19 percent below 2000 levels. ...

He might as well tell us where the stock markets will be in 2010. This is quantitative evidence? Zakaria's article is nonsense.

Despite calls from Iran and Venezuela - OPEC's steadfast bashers of the U.S. government - experts say there's little chance the cartel will shift from pricing oil in dollars to something like the euro. ...

While the dollar has fallen over 50 percent versus the euro since 2002, oil prices are nearly 5 times higher over the same time period.

"If you're a producer, that's precisely what you'd want it to do," said Paul Horsnell, head of commodities research at Barclays Capital in London.

Horsnell said the fact that oil prices have risen much faster than the dollar has kept most of the OPEC nations happy.

"There was a major lack of agreement in making [switching currencies] an issue," he said. ...

Our inability to wean ourselves from foreign oil has long been providing the financing for groups and countries that want to eliminate us, including terrorist organizations fed from the oil-rich nations. Former CIA director R. James Woolsey has been trying to drive that point home for years. The irony of financing our own destruction seems lost on most policy makers.

Even if one does not buy into the ecological stakes in the need to slash our oil consumption, the national security reasons should be compelling, and yet no one in this election year, Democrats or Republicans, is making that case. And the current administration certainly has not.

In short, we are delivering a $700 billion (at least, as prices are still rising) to the following nations: Iran, Sudan, Saudi Arabia, Russia and Venezuela. The implications are profound, and an orchestrated response by us is years away.

Sell crap disguised as gold, then obfuscate when caught? The current sub-prime mortgage meltdown on Wall Street is sounding a lot like the dot-com bubble -- as do all financial bubbles when they finally pop. What happened in the 2007 version of the Party-Like-Its-1999 fiasco? People with bad or marginal credit took out loans to buy homes they couldn't afford. Banks/lenders relaxed their standards to facilitate these "subprime" loans. Then Wall Street firms like Merrill Lynch and Citigroup bundled up these loans as mortgage-backed securities and sold them as "investments." The result? "$900 billion in now-suspect securitized debt." That's nine hundred billion dollars, a real threat to our whole economy. Just as Wall Street put lipstick on worthless dot-com company pigs, they hocked subprime mortgages as (very risky) high-yield investment vehicles -- and were not honest about what they were doing. From Fortune:

... Citigroup delayed for more than a week - from Saturday, October 27th until Sunday, November 4th - in announcing material information about the multi-billion-dollar write-downs it expects to record in this quarter. In the more than a week that passed, there were five trading days - October 29th through November 2nd - in which investors buying and selling Citigroup stock did not know that the write-downs were coming. ...

Cross-posted at netwmd.com and Newsvine

But Iraq is currently lucky to pump 2 million barrels a day. Decades of war and neglect have nearly halved production from a high of 3.5 million barrels in the late 1970s. Output is now below where it was when the United States first invaded in 2003, and some experts say that Iraq could see production fall by 200,000 barrels a day per year under present conditions.

Proceeds from Iraq's current oil sales - about $30 billion a year in 2006 - go to funding the Iraqi government. In fact, the Iraqi government is nearly entirely dependent upon oil for its funding, with crude accounting for at least 90 percent of its budget.

The favored exit strategy for internet startups is no longer an IPO but a splashy acquisition - preferably by Yahoo or Google. Head-to-head, how successful have Google and Yahoo been at advancing their purchases? ...

Blogging systems (1 of 5)

Google acquisition:
Pyra Labs' Blogger (2003; price not disclosed)

Yahoo acquisition:
GeoCities (1999; $3.6 billion in stock)

Winner: Google
Blogger was left for more than two years without updates, but it remains one of the most popular blogging sites. Users fled GeoCities after Yahoo changed the publishing terms and branding; the site is now a ghost town. ...

Google's Open Handset Alliance — an open-source mobile operating platform unveiled earlier Monday — has managed to attract a star-studded lineup of companies including T-Mobile, Qualcomm (QCOM), Motorola (MOT), Sprint (S), LG and China Mobile. But glaringly absent from the 'Axis of Google' are the two largest U.S. carriers: AT&T (T) and Verizon Wireless (VZ).

According to analysts, the two carriers have several reasons for not rushing into an agreement with Google — a company whose 'open' ideals they haven't always agreed with. For one, Google (GOOG) has said it plans to bid on upcoming wireless spectrum that will soon be up for auction by the Federal Communications Commission, which has led to speculations the Mountain View, Calif.-based search giant could someday become a mobile operator and go head to head with AT&T and Verizon.

"They could be worried that after embracing Google's technology they would end up competing with them as a carrier at some point down the road," says Michael Gartenberg, an analyst with Jupiter Research, though he adds it's unlikely Google will become a wireless operator anytime soon. ...

For several years stories in the media have reported a farm labor shortage. This study examines this question and finds little evidence to support this conclusion. First, fruit and vegetable production is actually rising. Second, wages for farm workers have not risen dramatically. Third, household expenditure on fresh fruits and vegetables has remained relatively constant, averaging about $1 a day for the past decade. ...

How many times are we going to go through this? This time: a real estate bubble; last time: a stock bubble. Our financial markets are supposed to be transparent. And they are... generally. Most of the time, all the information is out there, but some information is more easily accessed than other information, and investors make certain assumptions about the quality of the information. Many investors depend on financial ratings services. Standard & Poor's, Moody's, and Fitch Ratings are supposed to investigate and assess the risk/reward of investing in companies' stocks, bonds, and other types of securities.

But it turns out that the ratings firms had the same type of incestuous relationships with lenders as did the investment banks with the crappy dot-com companies of the 1990s. This time around, it is banks, investors, and would-be, sub-prime homeowners that will end up losing up to $150 billion -- and that number may grow. Note that there is no excuse, as home buyers with bad credit shouldn't have been borrowing, lenders shouldn't have been lending to people with bad credit, and the ratings services shouldn't have been putting lipstick on risky mortgage-backed securities so brokers could hock them to unwary investors. But the concept of systemic transparency (openness, truthfulness) has again taken a back seat to greed. Here's how the real estate shell-game worked:

...While out-of-date banking regulations and lax federal oversight didn't help matters, it was the complicity of the rating agencies -- Standard & Poor's, Moody's, and Fitch Ratings -- that enabled the boom. ...

Here's how it worked. After buyers with less than stellar credit were approved for a mortgage, lenders would bundle a bunch of iffy loans and sell them to investment banks, which would repackage these into Franken-loans and sell them to investors.

By working hand-in-glove with the rating agencies -- which were paid large fees for their involvement -- institutions managed to get masses of these mortgage-backed securities rated investment grade. All of a sudden risky consumer loans were reconstituted into -- presto! -- something seemingly no more risky than a government Treasury bond.

The whole concept, says hedge fund manager Bill Laggner, is "lunacy." Michael Burry, who runs hedge fund Scion Capital and was one of the first to aggressively bet against supposedly investment-grade securities based on subprime mortgages, says his thesis was that "the rating agencies were horribly wrong." In a letter to investors he compared them to investment banks during the dot-com bubble. "They were money-grubbing and sorely in need of an ethical compass," he wrote. ...

Here's the poor-baby, mooty-moo excuses of the ratings firms:

Even today the rating agencies have downgraded only a sliver of the securities based on subprime mortgages. All three defend their ratings, and they point out that they told investors not to rely solely on them. ...

And how useful is useless information?

The bigger question may be an existential one. Asks Jim Chanos, the head of Kynikos Associates, which has a short position in Moody's stock: "If the rating agencies will downgrade only when we can all see the losses, then why do we need the rating agencies?"

Short position or not, Mr. Chanos has a a valid point.

Cross-posted at netwmd.com and Newsvine

... While out-of-date banking regulations and lax federal oversight didn't help [sub-prime lending] matters, it was the complicity of the rating agencies -- Standard & Poor's, Moody's, and Fitch Ratings -- that enabled the boom. ...

Disguised risk
Here's how it worked. After buyers with less than stellar credit were approved for a mortgage, lenders would bundle a bunch of iffy loans and sell them to investment banks, which would repackage these into Franken-loans and sell them to investors.

By working hand-in-glove with the rating agencies -- which were paid large fees for their involvement -- institutions managed to get masses of these mortgage-backed securities rated investment grade. All of a sudden risky consumer loans were reconstituted into -- presto! -- something seemingly no more risky than a government Treasury bond.

The whole concept, says hedge fund manager Bill Laggner, is "lunacy." Michael Burry, who runs hedge fund Scion Capital and was one of the first to aggressively bet against supposedly investment-grade securities based on subprime mortgages, says his thesis was that "the rating agencies were horribly wrong." In a letter to investors he compared them to investment banks during the dot-com bubble. "They were money-grubbing and sorely in need of an ethical compass," he wrote.

Until recently the rating agencies insisted that everything was fine. The problem is that their models relied on historical data, and for newly popular things like "liar loans" and "piggyback" mortgages, there were no real historical data. Suddenly, in July, both Moody's and S&P downgraded billions of dollars of securities, and S&P said it was "adjusting" its rating process.

Even today the rating agencies have downgraded only a sliver of the securities based on subprime mortgages. All three defend their ratings, and they point out that they told investors not to rely solely on them.

For its part, S&P says that it takes time for loan pools to show the sustained loss patterns that it needs to see before it can come to the opinion that a downgrade is appropriate. It's hard to find anyone in the know who thinks that the rating agencies have acknowledged the extent of the problem. "You might have three months where you don't hear a word about subprime, but it's not over," says one trader.

More losses?
So what will that mean for our markets -- or for the agencies themselves?

Josh Rosner, a managing director at research firm Graham Fisher, co-authored a paper in February in which he predicted "significant losses" in even investment-grade securities because the agencies' models were so far off. He also expects that rating agencies will face litigation as a result of the role they played in creating these instruments.

The bigger question may be an existential one. Asks Jim Chanos, the head of Kynikos Associates, which has a short position in Moody's stock: "If the rating agencies will downgrade only when we can all see the losses, then why do we need the rating agencies?"

Capital One Financial Corp. said on Monday it would stop making new mortgages through brokers, citing a weaker profit outlook for that business amid current mortgage market difficulties.

Shares sank 3.6 percent in after hours trading on the New York Stock Exchange Monday.

Capital One (down $2.03 to $66.72, Charts, Fortune 500) said it expects after-tax charges from the closure of its GreenPoint mortgage unit of about $860 million, or $2.15 a share. Most of the charges will be taken in 2007. With these charges, full-year earnings will be about $5.00 a share.

The credit card and banking company said it expects to continue to make home loans in its bank branches, where it has more control of the underwriting process.

The Iraqi dinar hit near a new high today, trading at 1260 to the US dollar or $793.65 per million dinars. Note that the dinar has increased in value from 1470/US dollar, when I started tracking it on 10/9/05 -- about a 17% increase. A chart I put together (shown to the right) includes today's dinar value.

With all the bad news, why is the dinar going up? What are the currency markets telling us? Could it be that traders see Bush's troops surge in and around Baghdad as destined to succeed? There are signs of growing dissatisfaction among Iraq's Sunnis with the mostly-Sunni al-Qaeda. Some of Baghdad's Sunnis have started fighting against al-Qaeda terrorists. While these Sunnis insist on doing so without U.S. help, others in Anbar province have allied themselves with American forces and the Iraqi army.

Whatever the reason for the dinar's rise, I learned long ago to take into account economic indicators when evaluating political and societal conditions.

Cross-posted at netwmd.com and Newsvine