Bank heist accused is investment firm VP

GTA - Bank heist accused is investment firm VP


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Wanted man is believed 28 to 35 years old, solidly built and wears prescription glasses.
'Shocked' company launches probe of client accounts October 05, 2008 Nick AvelingStaff Reporter

A man who policed the day-to-day operations of a financial institution has been accused of being one of the country's most prolific bank robbers, known as the Exchange Bandit.

Kevin John Pinto, the 37-year-old vice-president of compliance at a Toronto investment firm, turned himself in Friday after the Canadian Bankers Association posted a $10,000 reward for his capture. He has been charged with 10 counts of robbery.

Pinto was one of two compliance staff at Paradigm Capital, an investment firm with offices in Toronto and Calgary. He was responsible for providing oversight and ensuring the firm's trading activities complied with regulatory requirements. Although compliance officers sometimes have legal backgrounds, Pinto does not, said company CEO David Roland.

Pinto had previously worked for National Bank.
"We're obviously extremely shocked," said Roland. "This is just an extremely unfortunate thing."

Paradigm Capital released a statement on its website Friday afternoon announcing that Pinto had been suspended and his case had been passed on to "relevant regulatory authorities."

Roland said Paradigm has also launched its own investigation. "We have no reason whatsoever to believe that any of our records, securities or client funds have in any way been compromised," said Roland. "We'll focus the investigation to make sure there's absolutely no chance that has happened."

A suspect had been wanted for at least 21 robberies – in Toronto, Peel, Kitchener, St. Catharines and Niagara Falls – dating to 2003.

The "Exchange Bandit's" most recent heist took place Sept. 12 at a Scotiabank on King St. W., just minutes from Paradigm's offices.

The suspect was given the nickname for his habit of exchanging words with a teller before producing a holdup note and warning that he was armed.

Pinto appeared briefly in court at Old City Hall yesterday morning. His bail hearing was moved to tomorrow. Police expect more charges from other regions.

Qec- 1st Target 8.25 the future Try $40,$50 or$60.00

QEC should hit a TARGET of $63.00/sh based on USA Shale Gas land valued at $35,000 per acre (Joseph Schachter) . (BNN-TV [ROB-TV) .

http://watch.bnn.ca/the-close/september-2008/the-close-september-12-2008/#clip92209

Questerre Energy Corporation is engaged in the exploration for, and the development, production and acquisition of scalable natural gas projects. Its major properties include St. Lawrence Lowlands, Quebec; Greater Sierra and Beaver River Field, British Columbia; Antler, Saskatchewan, and Vulcan and Westlock, Southern & Central Alberta.

The St. Lawrence Lowlands area is prospective for natural gas in multiple horizons with targets in the Ordovician Trenton Black-River and the Lorraine and Utica. Its landholdings of over one million gross acres consist of three separate blocks.

The largest block of 711,000 acres is subject to a farm-in and participation agreement with Talisman Energy. The primary zone of interest in the Greater Sierra region is the Devonian Jean Marie.

The region is also prospective for shallower zones, including the Mississippian Debolt and Slave Point formations. In November 2007, it acquired Magnus Energy Inc. In April 2008, the Company acquired Terrenex Ltd.

Share Capitalization

Issued & Outstanding:

Common Shares:
179,127,088 (as at May 14, 2008)
Stock Options:
16,769,170 (avg exercise price $0.61)
Insider Position:
17,126,231 (9.57%)

House 111 Is Accumulating Huge Over The Last 2 Days

This is Today

This Shows 1 Month Of Buy And Sells By Brokerages

This is the most current Corporate Presentation










Questerre Energy Corporation ("Questerre" or the "Company") (OSE,TSX:QEC) is pleased to announce that Talisman Energy Canada (“Talisman”) has elected to drill the remaining three option wells under its farm-in agreement with Questerre and its minority partner in the St. Lawrence Lowlands, Quebec.

The three wells will complete the work program allowing Talisman to earn about a 75% interest in the original 719,000 acre farm-out block. Questerre also retains about a 4¼% gross overriding royalty on production from Talisman.

Michael Binnion, President and Chief Executive Officer of Questerre, commented, “We were one of the first companies to recognize the potential of the Quebec Lowlands for unconventional gas and have worked for almost ten years to get to this point. We are thrilled that Talisman, which also saw the potential early on, has decided to accelerate the exploration and appraisal program. Our joint land lies right in the heart of the Lowlands between the Yamaska growth fault and Logan’s Line and runs from Quebec City to south of Lac Saint Pierre. We continue to believe this land position proximate to the market has significant natural gas potential.”

The three-well program is expected to commence in the latter half of 2008. The wells will test multiple horizons including the Trenton Black-River and the Utica and Lorraine shale sequences.

Questerre Energy Corporation is a Calgary-based independent resource company actively engaged in the exploration, development and acquisition of high-impact exploration and development oil and gas projects in Canada.

This news release contains forward-looking information. Implicit in this information are assumptions regarding commodity pricing, production, royalties and expenses, that, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. These forward-looking statements are based on certain assumptions that involve a number of risks and uncertainties and are not guarantees of future performance. Actual results could differ materially as a result of changes in the Company’s plans, commodity prices, equipment availability, general economic, market, regulatory and business conditions as well as production, development and operating performance and other risks associated with oil and gas operations. There is no guarantee made by the Company that the actual results achieved will be the same as those forecasted herein.

For further information, please contact:

Questerre Energy Corporation - Jason D’Silva, VP Finance
Tel: (403) 777-1185
Fax: (403) 777-1578
Email: info@questerre.com
Web: www.questerre.com

Markets Drop In Spite Of Bail-out

Bailout bill passes Senate and Congress

Bailout bill passes

JULIE HIRSCHFELD DAVIS and DAVID ESPO
Friday, October 03, 2008

WASHINGTON — With the U.S. economy on the brink and elections looming, Congress approved an unprecedented $700-billion (U.S.) government bailout of the battered financial industry on Friday and sent it to President George W. Bush for his certain signature.

The final vote was 263-171 in the House of Representatives, a comfortable margin that was 58 more votes than the measure garnered in Monday's stunning defeat.

The vote capped two weeks of tumult in Congress and on Wall Street, punctuated by daily warnings that the country confronted the gravest economic crisis since the Great Depression if lawmakers failed to act.

At the White House, Mr. Bush declared, “We have acted boldly to prevent the crisis on Wall Street from becoming a crisis in communities across our country.”

Treasury Secretary Henry Paulson pledged quick action to get the program up and operating.
“We all know that we are in the midst of a financial crisis,” House Republican Leader John Boehner of Ohio, said shortly before casting his vote for government intervention in private capital markets that was unthinkable only a month ago.

“And we know that if we do nothing, this crisis is likely to worsen and to put us into an economic slump like most of us have never seen.”

Speaker Nancy Pelosi, D-Calif., said the bill was needed to “Begin to shape the financial stability of our country and the economic security of our people.”

Stocks were up Friday on Wall Street, where there was a lot of anticipation of the vote but where investors also were buffeted by a bad report on the job market. The Labour Department said employers slashed 159,000 jobs in September, the largest cut in five years and further evidence of a sinking economy.

Federal Reserve Chairman Ben Bernanke, who had joined the administration in urging quick action, said, “The legislation is a critical step toward stabilizing our financial markets and ensuring an uninterrupted flow of credit to households and businesses.” He said the Fed would work closely with the Treasury Department to put the bill's provisions into effect.
Even before the measure cleared Congress, the White House sought to dampen optimism of its immediate impact on the economy. “This legislation is to fix a problem in our financial markets,” said spokesman Tony Fratto. “It's not sold as giving a boost to the economy, but rather preventing a crisis in our economy... If it works as we hope it will, credit will be able to begin flowing again.”
The House vote marked a sharp change from Monday, when an earlier measure was sent down to defeat, largely at the hands of angry conservative Republicans.
Senate leaders quickly took custody of the measure, adding on $110-billion in tax and spending provisions designed to attract additional support, then grafting on legislation mandating broader mental health coverage in the insurance industry. The revised measure won Senate approval Wednesday night, 74-25, setting up a furious round of lobbying in the House as the administration, congressional leaders, the major party presidential candidates and outside groups joined forces behind the measure.
It worked — augmented by a sudden switch in public opinion that occurred after the U.S. stock market took its largest-ever one-day dive on Monday.
“No matter what we do or what we pass, there are still tough times out there. People are mad — I'm mad,” said Republican Rep. J. Gresham Barrett of South Carolina, who opposed the measure the first time it came to a vote. Now, he said, “We have to act. We have to act now.”
Rep. John Lewis, D-Ga., another convert, said, “I have decided that the cost of doing nothing is greater than the cost of doing something.”
Critics were unrelenting.
“How can we have capitalism on the way up and socialism on the way down,” said Rep. Jeb Hensarling of Texas, a leader among conservative Republicans who oppose the central thrust of the legislation — an unprecedented federal intervention into the private capital markets.
It was little more than two weeks ago that Mr. Paulson and Mr. Bernanke concluded that the economy was in such danger that a massive government intervention in the private markets was essential.
The core of the plan remains little changed from its inception — the Treasury Department would have $700-billion at its disposal to purchase bad mortgage-related securities that are weighing down the balance sheets of institutions that hold them. The flow of credit has slowed, in some cases drying up, threatening the ability of businesses to conduct routine operations or expand.
At the same time, lawmakers have dramatically changed the measure, insisting on greater congressional supervision over the money, taking measures to protect taxpayers, and insisting on steps to crack down on so-called golden parachutes that go to corporate executives whose companies fail.
Earlier in the week, the legislation was altered to expand the federal insurance program for individual bank deposits, and the Securities and Exchange Commission took steps to ease the impact of the questionable mortgage-backed securities on financial institutions.
In the moments before the vote, Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, pledged “serious surgery” next year to address the underlying causes of the crisis.
If anything, the economic news added to the sense of urgency.
The Labour Department said initial claims for jobless benefits had increased last week to the highest level since the gloomy days after the 2001 terror attacks. The news of the payroll cuts came on top of Thursday's Commerce Department report that factory orders in August plunged by 4 per cent.
Typifying arguments the problem no longer is just a Wall Street issue but also one for Main Street, lawmakers from California and Florida said their state governments were beginning to experience trouble borrowing funds for their own operations.
Ms. Pelosi said, “We must win it for Mr. and Mrs. Jones on Main Street.”
One month before election day, the drama unfolded in an intensely political atmosphere.
Democratic presidential candidate Barack Obama, a supporter of the bill, made calls to members of the Congressional Black Caucus, who publicly credited him with changing their minds.
Rep. Elijah Cummings and Donna Edwards, both Maryland Democrats, were among them. They said Mr. Obama had pledged if he wins the White House that he would help homeowners facing foreclosure on their mortgages. He also pledged to support changes in the bankruptcy law to make it less burdensome on consumers.
“It's not too often you get the future president telling you that his priority matches your priority,” said Mr. Cummings.
Mr. Obama's rival, Sen. John McCain, who announced a brief suspension in his campaign more than a week ago to try and help solve the financial crisis, made calls to Republicans.
Republican Rep. Sue Myrick of North Carolina, who switched her vote to favour the measure, looked ahead to the election and said, “I may lose this race over this vote, but that's okay with me. This is the right vote for the country.”
The vote on Monday staggered the congressional leadership and contributed to the largest one-day stock market point drop in U.S. history, 778 points as measured by the Dow Jones industrial average.
Across the Capitol, Senate leaders reacted quickly, deciding to sweeten the bill with a series of popular tax breaks as well as spending on rural schools and disaster aid. They also grafted on a bill to expand mental health coverage under private insurance plans.
At the same time, the change in federal deposit insurance and the action by the SEC on an obscure accounting rule helped produce a steady trickle of converts.
© Copyright The Globe and Mail

Bank of Canada pumps billions into system

Bank of Canada pumps billions into system

HEATHER SCOFFIELD
Friday, October 03, 2008

OTTAWA — The Bank of Canada is substantially bulking up its liquidity injections, increasing their frequency and making it easier for financial institutions to partake - measures that aim to manage near-frozen conditions in money markets.

The central bank said it is increasing its plans to inject extra cash into term lending markets from $8-billion, announced recently, to $20-billion.
The extra securities will be made available more frequently, on a weekly basis, until at least the end of the year, the bank said in a statement on its website. Plus, the bank will announce well in advance the minimum amounts that will be made available.

“In light of persistent pressures in these markets, the Bank announces additional steps to provide term liquidity,” the bank explained.
The Bank of Canada also added an additional $830-million to the overnight money market Friday morning.

The central bank also said it is expanding its list of eligible collateral, again. “In recognition of market conditions,” it will now take bank-sponsored asset backed commercial paper, in addition to other securities recently added to its list of acceptable collateral, the bank said.
“The Bank will continue to provide term liquidity as long as conditions in financial markets warrant,” the statement concluded.

The announcement marked a dramatic escalation of the central bank's liquidity measures, with the Bank of Canada moving in tandem with central banks around the world to bolster money markets that have become paralyzed by fear.

The Canadian central bank has not been as active as others in the overnight money market, with intervention only needed sporadically -- albeit it intervened both Thursday with $610-million and Friday with $830-million so far.

But the “term” money market - involving one-month and three-month securities, among others - has required more and more support in Canada.

Already on Monday of this week, the central bank doubled its 28-day injection from $2-billion to $4-billion, pushing its total extraordinary measures to $10-billion from $8-billion.
Now, the bank's amounts have soared across the curve, in the hopes of bringing down spreads and diminishing risk aversion.

Money markets around the world were at a standstill on Friday, with banks refusing to lend to each other as they kept on an eye on the U.S. House of Representatives to see if it would pass the $700-billion (U.S.) bailout bill.

So-called “term” funding of one month and beyond remains mostly expensive and scarce because banks prefer to hoard cash to bolster battered balance sheets than lend to counterparties they fear may be in severe financial distress.

Canada has been no exception, with spreads rising substantially over the past few days, and signs that investors and financial institutions would prefer to hold government-backed treasuries over everything else. The spread between Canadian interbank lending rates and government-backed securities is now above 100 basis points, up from a normal range of 10.
Some analysts had hoped that money market spreads would relax somewhat after Sept. 30, since that's quarter end for many financial institutions and typically a time of high demand for short-term securities. But the end of the month has come and gone, and spreads are still breaking through record highs.

The passing of the U.S. financial rescue plan could come later on Friday and would help shore up confidence across financial markets. But many measures of deteriorating credit conditions, such as interbank premia over expected policy rates and swaps spreads, remained at extreme levels.
“Lower (interbank term) rates would be helpful overall for the economy, and it's disappointing that central banks can't engineer lower rates,” Ciaran O'Hagan, senior strategist at Societe Generale in Paris told Reuters.

“There's a big focus on spreads, but that's not as relevant for the economy as the level of rates. The more serious thing is the rationing of credit ... especially to the non-financial sector,” he said.
Massive central bank cash injections have helped keep trading going on an overnight basis since confidence collapsed with the demise of Lehman Brothers and subsequent rescue of several European banks.

The Bank of Japan injected $7.6 billion in an over-the-weekend operation on Friday to provide funds to foreign banks struggling to secure cash from Japanese lenders.
Australia's central bank added $1.2 billion in repurchase agreements, way above an estimated daily need of $1.195 billion.
The Bank of England auctioned $10-billion overnight money and $30-billion of one-week cash, while the European Central Bank auctioned $50-billion of three-day funds and threw open the doors for thousands of banks to access its so-called 'fine-tuning' operations for overnight auctions.
The ECB left its benchmark interest rate on hold at 4.25 per cent Thursday but highlighted the risk to the European economy from the credit crunch, suggesting the first euro zone rate cut in five years was on the cards.
Financial markets now expect a rate cut at the ECB's next meeting and a further two cuts to 3.50 per cent by February.
In the United States, there was no relief for the commercial paper market. Outstanding paper slumped by $94.9-billion to $1.607-trillion, Federal Reserve data showed, bringing the cumulative shrinkage to $208-billion in the past three weeks.
Fed data also showed banks borrowed a record $367.8-billion from the central bank in the latest week.
© Copyright The Globe and Mail

Investing myths laid bare by this bear market

Investing myths laid bare by this bear market
TheStar.com - Business -

Foremost is belief that balance sheets reflect true value of assets

October 03, 2008 Bill CarriganSpecial to the Star

The 2007-08 bear market in global stock markets has exposed several investing myths. Let's start with the idea that corporate balance sheets are a fair reflection of the value of a company's assets and liabilities.

Balance-sheet myth

Last Monday's panic liquidation began with shares of Wachovia Corp. plunging to penny-stock status in reaction to the massive devaluation of Washington Mutual's loans.

The problem was WaMu's numbers were much lower than those at which Wachovia was valuing its own portfolio.

Citigroup quickly agreed to buy Wachovia's banking operations for $2.1 billion (U.S.) in a deal arranged by federal regulators.

Mad Money's host Jim Cramer was enraged, claiming Citigroup bought Wachovia "for a pittance."

It was only two weeks ago that Wachovia chief executive Bob Steel told CNBC's Mad Money viewers that out of $500 billion in loans on the bank's books, only $10 billion were bad.
Cramer did not call Steel a liar, but rather believes that Steel believed what he said. Cramer was mad at himself for letting his viewers down. He trusted Steel, who has been known as a solid financier for 25 years, and he urged viewers to do the same.

Cramer went on to say Wachovia's financials "just didn't reflect reality," and "the SEC and multiple bank examiners all signed off on Wachovia's books. Even Steel, a former number two at Treasury, couldn't see how bad his own balance sheet was.

"He just didn't know what was there."

Cramer would end up the session by adding the CEO to the Mad Money Wall of Shame.
The demise of Wall St. shows that balance sheets could not be trusted because large amounts of their assets were based on murky financial engineering.

Complex financial derivatives such as credit-default swaps and collateralized debt obligations were not valued properly because they were not subject to the same visibility as publicly traded securities.

Commodity myth
Remember all that talk about the commodity supercycle and how China's growth would keep commodities prices in the stratosphere forever? Doesn't seem to be working out that way.

The investors who bought into the long-term commodity story have over the past several weeks learned a brutal lesson. Commodities are cyclical. They don't pay dividends and they are not growth companies.

Prices gyrate as leveraged hedge funds push prices every which way with billions of dollars of hot money stampeding in and out of the latest hot commodity.

Global diversification myth

We also learned that global diversification in recent years has been little help to investors. There was a time when markets around the world went in different directions, while economies in different countries did their own thing. But for years now it's been a global economy and markets increasingly move up and down in unison. When it comes to the world bourses, it is monkey see, monkey do.

What you do get by investing abroad, however, is foreign-currency exposure, and that does add diversification.

Currency hedging myth
While investing abroad adds currency diversification, in recent years many investors have curiously moved to hedge out that exposure. The recent weakening of the Canadian dollar has illustrated that currency hedging is an expensive scam. If foreign currency exposure gives you some diversification, why then would you hedge the advantage away? For example, the currency-hedged iShares CDN S&P 500 Index Fund (XSP) is down about 21 per cent year-to-date. An unhedged version would be down about 15 per cent in terms of Canadian dollars. Investment industry pushes helped make hedging popular two years ago.

If you have the time, one strategy that you can employ in sloppy markets is to engage in stock picking. During these volatile markets, the price behaviour of a stock will tell you much more than the current fundamentals because the price leads the fundamentals by weeks and months.
For example, collapsing markets create an opportunity to study the price behaviour of stocks in your portfolio and of the stocks you are thinking of acquiring.

The strategy here is to seek out stocks that performed better or worse than the broader stock indices during a period of fear and panic. That is very bullish

I ran a stock filter and uncovered 48 issuers that displayed the same bullish price action subsequent to the Monday massacre. The selections are relatively liquid and stocks trading under $2.25 (Canadian) were rejected from the scan.

You can view these names on my blog at www.gettingtechnical.com.

Bill Carrigan is an independent stock-market analyst.

Markets Trashed But Cash Bought The Bottom

QEC Stochastics

QEC Is A Stock You Should Own At These Prices

http://watch.bnn.ca/the-close/september-2008/the-close-september-12-2008/#clip92209

Questerre Energy Corporation is engaged in the exploration for, and the development, production and acquisition of scalable natural gas projects. Its major properties include St. Lawrence Lowlands, Quebec; Greater Sierra and Beaver River Field, British Columbia; Antler, Saskatchewan, and Vulcan and Westlock, Southern & Central Alberta.

The St. Lawrence Lowlands area is prospective for natural gas in multiple horizons with targets in the Ordovician Trenton Black-River and the Lorraine and Utica. Its landholdings of over one million gross acres consist of three separate blocks.

The largest block of 711,000 acres is subject to a farm-in and participation agreement with Talisman Energy. The primary zone of interest in the Greater Sierra region is the Devonian Jean Marie.

The region is also prospective for shallower zones, including the Mississippian Debolt and Slave Point formations. In November 2007, it acquired Magnus Energy Inc. In April 2008, the Company acquired Terrenex Ltd.

Share Capitalization

Issued & Outstanding:

Common Shares:
179,127,088 (as at May 14, 2008)
Stock Options:
16,769,170 (avg exercise price $0.61)
Insider Position:
17,126,231 (9.57%)

House 111 Is Accumulating Huge Over The Last 2 Days

This is Today

This Shows 1 Month Of Buy And Sells By Brokerages

This is the most current Corporate Presentation






Questerre Energy Corporation ("Questerre" or the "Company") (OSE,TSX:QEC) is pleased to announce that Talisman Energy Canada (“Talisman”) has elected to drill the remaining three option wells under its farm-in agreement with Questerre and its minority partner in the St. Lawrence Lowlands, Quebec.

The three wells will complete the work program allowing Talisman to earn about a 75% interest in the original 719,000 acre farm-out block. Questerre also retains about a 4¼% gross overriding royalty on production from Talisman.

Michael Binnion, President and Chief Executive Officer of Questerre, commented, “We were one of the first companies to recognize the potential of the Quebec Lowlands for unconventional gas and have worked for almost ten years to get to this point. We are thrilled that Talisman, which also saw the potential early on, has decided to accelerate the exploration and appraisal program. Our joint land lies right in the heart of the Lowlands between the Yamaska growth fault and Logan’s Line and runs from Quebec City to south of Lac Saint Pierre. We continue to believe this land position proximate to the market has significant natural gas potential.”

The three-well program is expected to commence in the latter half of 2008. The wells will test multiple horizons including the Trenton Black-River and the Utica and Lorraine shale sequences.

Questerre Energy Corporation is a Calgary-based independent resource company actively engaged in the exploration, development and acquisition of high-impact exploration and development oil and gas projects in Canada.

This news release contains forward-looking information. Implicit in this information are assumptions regarding commodity pricing, production, royalties and expenses, that, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. These forward-looking statements are based on certain assumptions that involve a number of risks and uncertainties and are not guarantees of future performance. Actual results could differ materially as a result of changes in the Company’s plans, commodity prices, equipment availability, general economic, market, regulatory and business conditions as well as production, development and operating performance and other risks associated with oil and gas operations. There is no guarantee made by the Company that the actual results achieved will be the same as those forecasted herein.

For further information, please contact:

Questerre Energy Corporation - Jason D’Silva, VP Finance
Tel: (403) 777-1185
Fax: (403) 777-1578
Email: info@questerre.com
Web: www.questerre.com

September, 2008: 30 days that rocked the world

September, 2008: 30 days that rocked the world

DAVID PARKINSON
Tuesday, September 30, 2008
Perhaps one day, they'll print it on T-shirts: I Went Through the September Wringer of 2008.
With a dizzying, dismal September finally behind the world's financial markets, investors are left surveying the carnage of the most volatile month for stocks in a generation. After a history-making month of failing banks, rescue plans and dashed hopes, investors find themselves looking at a Canadian market worth almost 15 per cent less than it was a month ago – and facing some difficult questions about what comes next.

Veteran market watchers note the markets have seen deeper turmoil over shorter time spans – most recently, the selloffs of October, 1987, and August, 1998, both of which saw 20-per-cent-plus declines.

But what is more worrisome this time is the underlying economic and credit landscape, which offers little support for stocks.

Unlike the plunges that were triggered by financial market woes but came in times of a generally solid underlying economy, this selloff has come amid a severe credit crunch and a global economy lurching toward recession.

“This is a more complicated situation. It has a lot more layerings,” said UBS Securities Canada chief economist George Vasic, a market veteran of nearly three decades.
Even after rebounding more than 450 points Tuesday, the S&P/TSX composite index finished the month down 14.7 per cent – its fourth-worst month since 1980, and its worst September since 1931. The month featured wild mood swings in which one-third of the trading sessions (seven of 21) featured moves of more than 3 per cent.

The end of September also caps a dismal quarter of credit woes and sinking commodity prices that fuelled a 19-per-cent slide in the S&P/TSX composite, its worst quarter in a decade. The index is down 22 per cent from its peak in June.

The month wasn't much kinder to U.S. markets. The S&P 500 fell 9.2 per cent, its third-worst September, and eighth-worst month, since 1950.

Sharp downward corrections in stock markets aren't as rare as many investors imagine. In the past decade alone, the Canadian market has had eight months with losses of more than 7 per cent.

“These things happen more often than people remember,” Mr. Vasic said. “The pain of the past doesn't sting quite as much right now, because you eventually recovered from that pain, but at this moment you're not sure if or when you're going to recover from the current situation.”

And, indeed, stocks have historically rebounded smartly from violent short-term slides. Merrill Lynch analyst Mary Ann Bartels noted that in six of the eight occasions the S&P 500 suffered losses equal to or greater than Monday's 9-per-cent plunge, stocks bounced back the next day and were still above those selloff lows a month later.

But with the global economy still slowing, complicated by the confusion surrounding credit and financial sector woes, this pullback may not follow the typical model.

“Even allowing for the U.S. recession, we do have the fact that U.S. consumers do need to de-lever themselves. So, that would appear to cement the prospects for a weak recovery,” Mr. Vasic said.
And the credit-fuelled turmoil in the global financial sector “is a feature that really hasn't been there in any of the postwar recessions,” he said.

Academics said Tuesday that although we're still in early days, September's events and their accompanying market turmoil could one day make up key chapters in economic and financial text books. The transformation in some of the world's biggest and most powerful financial institutions, government and central bank manoeuvrings and the gut-wrenching reconstruction of the world's credit system could provide valuable lessons for the global economy and financial system.

“This is not the end game, but it's the beginning of the end,” said economist Mahmoud El-Gamal of Rice University. “How the end game plays out really depends on whether there is an international level of co-operation on reconfiguring the international financial system, as well as specific sectors including the investment banks and the hedge funds.

“We don't really know how it's going to go.”
© Copyright The Globe and Mail

A Great Day Did You Buy Yesterday? I did and sold today!

1st Bailout Vote Fails and Pescod says...

To Read The Full Report Click Here

Markets plunge as $700-billion package fails

Markets plunge as $700-billion package fails

STEVE LADURANTAYE
Monday, September 29, 2008
North American stocks plunged Monday as the massive U.S. banking bailout was voted down by Congress.

Toronto stocks plunged 849.07 points, or 7 per cent, by mid-afternoon and the Dow Jones industrial average 443.08 points, or 3.98 per cent. The S&P 500 fell as much as 5.98 per cent, or 72.58 points, in its biggest drop since 1987.

The $700-billion (U.S.) plan, which appeared set for approval when a compromise was announced Sunday, was intended to increase liquidity in the markets and restore confidence in a shattered banking sector. The plan was rejected 228-to-205.

Critics said the bailout didn't address the concerns of the average citizen, such as job losses and the weak housing market that is at the source of the banking problems. If Monday's vote had passed, the plan would have been before the Senate Wednesday and signed by the President George W. Bush soon after.

“The immediate downside market reaction is appropriate for the decision made by the senate committee today,” said Sheryl Purdy, vice-president of Leede Financial Markets in Calgary. “They called the dare and now they're seeing what the free markets think of their decision to vote down this bill. I sincerely hope they will revise and reconsider their decision made today”
As lawmakers voted, the yield of the 3-month Treasury bill sank to 0.32 per cent – indicating their willingness to sacrifice returns for security.

Oil contributed to the deep losses in Toronto, with the energy sector down 9 per cent. Oil lost as much as $10.01 Monday to $96.88 a barrel, but had regained some of the losses to settled at $98.22.

“Oil is really down on all of the broader worries,” said Martin King, energy commodities analyst at FirstEnergy Capital Corp. in Calgary. “They're worried about demand and about this financial package in the United States. There is also general blowback – people need to raise cash again so they are selling their oil positions.”

David Cockfield, a portfolio manager at Leon Frazer Associates in Toronto, said “illogical” investors are abandoning sectors that are in relatively good shape in a bid to protect their assets. Oil may be falling, he said, but it's still 25 per cent higher than it was last year and profits are expected to by 50 per cent higher at oil producers this quarter than the same period a year ago.

“It's all somebody else's problems, being reflected in Canadian stocks,” Mr. Cockfield said. “All of our concerns are in Canada are so far imagined. We think this could hurt us, but we've seen very little evidence of that so far. People are just running for cover with the assumption that all those problems are going to cross over the border and there's no proof that this is happening.”
Earlier in the day, the credit crisis continued to claim victims.

The Federal Deposit Insurance Corp. said Citigroup Inc. would take over Wachovia's banking operations. Citigroup will absorb up to $42-billion (U.S.) in losses, with the government backing any further losses. In return, Citigroup will issue FDIC $12-billion in preferred shares and warrants.
Wachovia is the latest institution to succumb to the crisis – mortgage lenders Freddie Mac and Fannie Mae were taken over by the government to protect $5-trillion in mortgages, insurer American International Group was bailed out by the governments in an $85-billion effort, Lehman Brothers Holdings declared bankruptcy and Merrill Lynch was absorbed by the Bank of America.
The banking crisis also cut deeply into Europe over the weekend, with Fortis and Bradford & Bingley banks receiving government bailouts and other European banks getting hammered in the markets on Monday.
More to come
© Copyright The Globe and Mail

Red Red Red - Cash Is King!

And I'm in Cash After The Last Massive 2 Day Rally

Stocks, oil plunge as credit crisis bites STEVE LADURANTAYEMonday, September 29, 2008

The Toronto Stock Exchange plunged Monday morning, kicking off a fresh week on weaker oil and a credit crisis that continues to reverberate through the global economy.
In Toronto, the S&P/TSX lost 3.57 per cent, or 432.35, to 11693.65 at 11 a.m. (ET). Oil was down $6.55 (U.S.) a barrel to $100.34.

“There is a ‘Just-get-me-out mentality,'” said Lyle Stein, president of Red Barn Capital in Toronto. “I think there was a bit of hope that this bailout would put a finger in the dyke, but obviously it isn't the plug people were hoping for.”

The Dow Jones industrial average fell 2.32 per cent, or 258.94 points, to 10,884.19. The broader S&P 500 fell 3.29 per cent, or 39.91 points, to 1,173.36.

“Despite the U.S. bailout plan now being committed to paper, there's hardly a jubilant mood expected as the new trading week gets under way,” commented Tony Cross, director of Monk Communications. “The fact the funds won't be released in one lot but instead a series of tranches is certainly detracting from its appeal.”

The Federal Deposit Insurance Corp. said Monday that Citigroup Inc. would take over Wachovia's banking operations. Citigroup will absorb up to $42-billion (U.S.) in losses, with the government backing any further losses. In return, Citigroup will issue FDIC $12-billion in preferred shares and warrants.

Wachovia is the latest institution to succumb to the credit crisis – mortgage lenders Freddie Mac and Fannie Mae were taken over by the government to protect $5-trillion in mortgages, insurer American International Group was bailed out by the governments in an $85-billion effort, Lehman Brothers Holdings declared bankruptcy and Merrill Lynch was absorbed by the Bank of America.

The banking crisis also cut deeply into Europe over the weekend, with Fortis and Bradford & Bingley banks receiving government bailouts and other European banks getting hammered in the markets on Monday.

“Irrespective of the current relief program, it must be recognized that the past year of deterioration in credit conditions globally argues for softer than expected order and sales activity over the next six months, at a minimum, for many industries tied to capital spending where returns on investment are compared to what have been higher costs of capital,” commented Tobias Levkovich, Citigroup's chief equities strategist.

“This reality cannot be turned around overnight and thus leaves earnings risk for technology hardware companies, industrial products producers, raw materials vendors and even energy equipment and services.”
More to come
© Copyright The Globe and Mail

Dubai's $1.5B Palm Island opens, but global money crisis may hurt its success

Island of wealth in an ocean of red ink TheStar.com - Business - Island of wealth in an ocean of red ink

Dubai's $1.5B Palm Island opens, but global money crisis may hurt its success
September 28, 2008 Adam SchreckBarbara SurkAssociated Press
DUBAI, United Arab Emirates–It's the latest word in Persian Gulf excess: a $1.5 billion (U.S.) resort boasting a $25,000-a-night suite and dolphins flown in from the South Pacific – all atop an island built in the shape of a palm tree.

Environmentalists have long criticized both Palm Jumeirah island and some of the features of the Atlantis hotel, which opened earlier this week. And analysts wonder if global financial turmoil will crimp Dubai's big hopes for tourists.

Dubai is not blinking, though.
The 113-acre resort on the artificial island off the coast is among the city-state's biggest bets that tourism can help sustain its economy once regional oil profits stop flowing.
"You don't build a billion-and-a-half dollar project just anywhere in the world," said Alan Leibman, president and managing director of Kerzner International, the hotel operator that teamed with Dubai developer Nakheel on the resort.

With its own oil reserves running dry, Dubai hopes to woo those eager to make money and those who know how to spend it – even as much of the global economy sours.
For years, the emirate – one of seven semi-independent states that make up the United Arab Emirates – has been feverishly building skyscrapers and luxury hotels.

A key piece of the strategy has been to cultivate an image in the west as a sun-kissed tourist destination despite its intense summer heat, conservative Muslim society and dearth of historic sites.

Among the daring projects are an indoor ski slope, the as-yet-incomplete world's tallest skyscraper and a growing archipelago of man-made islands such as Palm Jumeirah – the smallest of three such projects planned.

Much of the focus at the Atlantis, modelled on a sister resort in the Bahamas, is on ocean-themed family entertainment. The resort has a giant, open-air tank with 65,000 fish, stingrays and other sea creatures and a dolphinarium with more than two dozen bottlenose dolphins flown in from the Solomon Islands.

The hotel's top floor aims squarely at the ultra-wealthy. A three-bedroom, three-bathroom suite complete with gold-leaf, 18-seat dining table is on offer for $25,000 a night.
Environmental groups and some people in the Solomons protested the sale of the dolphins to the resort as well as the 30-hour plane flight to get them to Dubai.

Dubai's development has long been criticized by environmental activists, who say the construction of artificial islands hurts coral reefs and even shifts water currents. They also point to growing water and electricity consumption.

Developers seem undaunted. For the moment, the Atlantis shares the island only with rows of high-end houses and construction sites. But other international names are set to move in.
Donald Trump plans a hotel straddling the centre of the tree-shaped island's "palm," and the storied QE2 ocean liner will become a hotel and a tourist attraction docked alongside its ``trunk." An 1,800-seat theatre nearby will house a permanent Cirque du Soleil show beginning in the summer 2011.

"Palm Jumeirah in and of itself will become one of Dubai's major tourist attractions," said Joe Cita, chief executive of Nakheel's hotel division.

Boosting the number of attractions on the island will not only entice more visitors, but also persuade them to spend more time and money in the city, he said.
By 2010, Dubai aims to attract 10 million hotel visitors annually, up from about seven million in 2007. Atlantis alone will increase the city's hotel capacity by 3 per cent.
So far, demand appears strong. The Middle East had the highest hotel occupancy rates in the world during the first half of the year, with Dubai leading the region at 85.3 per cent, according to Deloitte Touche Tohmatsu.

Dubai also had the highest room rates in the region, although revenue growth is slowing, Deloitte noted.

Atlantis' backers are optimistic they can fill its 1,539 rooms despite the economic uncertainty wracking some of the world's richest economies. Their focus is on well-heeled travellers from Europe, Russia, Asia and elsewhere in the Middle East.

"People will still take family holidays," Leibman said. ``Dubai is still good value when you're paying in pounds, (or) you're paying in euros.'' Nakheel, the developer, and Kerzner, the hotel operator, are both privately held companies and do not release sales data. Leibman said demand from tour groups looks strong well into the first part of next year.

Yet Marios Maratheftis, head of regional research for the Middle East, North Africa and Pakistan at Standard Chartered Bank in Dubai, said there is "good reason" to be concerned that global financial problems could hit Dubai's tourism industry. Nevertheless, he said, the city's long-term outlook remains positive.

Kerzner has grown increasingly close to Dubai in recent years. In 2006, the company took itself private in a $3.8 billion deal partially bankrolled by a division of Nakheel's state-owned parent, Dubai World. Nakheel retains a large stake in the company.

Nakheel's hotel division has expanded rapidly. The company's holdings include New York's Mandarin Oriental, the Fontainebleau in Miami, and the W Hotel in Washington. Its parent also owns a minority stake in MGM Mirage Inc. and is teaming with that casino operator and Kerzner to build a multibillion-dollar casino on the Las Vegas Strip.

European Banks Wobble Monday

Lawmakers release plan to enact historic bailout of nation's financial system

Rescue bill unveiled

Lawmakers release plan to enact historic bailout of nation's financial system.
By Jeanne Sahadi, CNNMoney.com senior writer

Last Updated: September 28, 2008: 10:35 PM ET

NEW YORK (CNNMoney.com) -- The federal government would put up as much as $700 billion in a far-reaching plan to rescue the nation's troubled financial system, according to a bill unveiled by lawmakers on Sunday.

House Speaker Nancy Pelosi, D-Calif., said she hopes the House will take up the bill on Monday. Sen. Majority Leader Harry Reid, D-Nev., said he believes the Senate can move on the legislation by Wednesday.

Pelosi said the provisions added by Congress will protect taxpayers from having to pay for the bailout.
"We sent a message to Wall Street - the party is over," she said at a press conference with Reid and other Democratic leaders from the House and Senate.

The core of the bill is based on Treasury Secretary Henry Paulson's request for authority to purchase troubled assets from financial institutions so banks can resume lending and so the credit markets, now virtually frozen, can begin to operate more normally.

But Democrats and Republicans - concerned about the potential taxpayer cost - have added several conditions and restrictions to protect taxpayers on the down side and give them a chance at some of the potential upside if the companies benefit from the plan. "People have to know that this isn't about a bailout of Wall Street. It's a buy-in so we can turn our economy around," Pelosi said.

Key negotiators for the financial rescue plan will be busy trying to line up votes on Capitol Hill on Sunday to support the accord they reached soon after midnight. House Majority Leader Steny Hoyer, D-Md., told CNN he believes a majority of representatives on both sides of the aisle can and will support the bill.

President Bush, in a statement Sunday evening, said "this is a difficult vote, but with the improvements made to the bill, I am confident Congress will do what is best for our economy by approving this legislation promptly."

On Sunday evening, the House Republican working group, which was stringently opposed to earlier drafts of the plan and offered a counterproposal, indicated it would support the bill, and its members are encouraging other Republicans in the House to do the same.
"Nobody wants to have to support this bill, but it's a bill that we believe will avert the crisis that's out there," House Minority Leader John Boehner, R-Ohio, told reporters.
Key provisions of the bill

Doling the money out: The $700 billion would be disbursed in stages, with $250 billion made available immediately for the Treasury's use. Authority to use the money would expire on Dec. 31, 2009, unless Congress certifies a one-year extension.
Protecting taxpayers: The ultimate cost to the taxpayer is not expected to be near the amount the Treasury invests in the program. That's because the government would buy assets that have underlying value.

If the Treasury pays fair market value - which investors have had a hard time determining - taxpayers stand a chance to break even or even make a profit if those assets throw off income or appreciate in value by the time the government sells them. If it overpays for the assets, the government could be left with a net loss but would get something back on the open market for the assets when it eventually sells them.

If it ends up with a net loss, however, the bill says the president must propose legislation to recoup money from the financial industry if the rescue plan results in net losses to taxpayers five years after the plan is enacted.
In addition, Treasury would be allowed to take ownership stakes in participating companies.
Stemming foreclosures: The bill calls for the government, as an owner of a large number of mortgage securities, to exert influence on loan servicers to modify more troubled loans.
In cases where the government buys troubled mortgage loans directly from banks, it can adjust them more easily.

Limiting executive pay: Curbs would be placed on the compensation of executives at companies that sell mortgage assets to Treasury. Among them, companies that participate will not be able to deduct the salary they pay to executives above $500,000.
They also will not be allowed to write new contracts that allow for "golden parachutes" for their top 5 executives if they are fired or the company goes belly up. But the executives' current contracts, which may include golden parachutes, would still stand.

Overseeing the program: The bill would establish two oversight boards.
The Financial Stability Oversight Board would be charged with ensuring the policies implemented protect taxpayers and are in the economic interests of the United States. It will include the Federal Reserve chairman, the Securities and Exchange Commission chairman, the Federal Home Finance Agency director, the Housing and Urban Development secretary and the Treasury secretary.

A congressional oversight panel would be charged with reviewing the state of financial markets, the regulatory system and the Treasury's use of its authority under the rescue plan. Sitting on the panel would be 5 outside experts appointed by House and Senate leaders.
Insuring against losses: Treasury must establish an insurance program - with risk-based premiums paid by the industry - to guarantee companies' troubled assets, including mortgage-backed securities, purchased before March 14, 2008.

The amount the Treasury would spend to cover losses minus company-paid premiums would come out of the $700 billion the Treasury is allowed to use for the rescue plan.
Far-reaching program

Paulson first announced the administration would seek an economic bailout plan on Sept. 18, after meeting with key lawmakers in the House and Senate - a meeting that left lawmakers looking ashen when they spoke to the press afterwards.

If enacted, the rescue plan would be the most dramatic and extensive government intervention in the economy since the Great Depression. President Bush on Sept. 24 gave a prime-time address to the nation in which he urged lawmakers to pass his plan and warned that the "entire economy is in danger."

The aim of the rescue is to unfreeze the credit markets - short-term lending among banks and corporations. The core of the problem is bad real estate loans that have led to record foreclosures when the housing bubble burst and home prices declined.
In the past two weeks, the banking world and Wall Street have been reordered by a wave of collapses and corporate mergers. The most recent development was the seizure by federal regulators on Thursday night of Washington Mutual, once the nation's largest thrift and a major mortgage lender.

The chill of the credit freeze has been felt far beyond Wall Street, as well. Businesses large and small have seen the cost of borrowing spike higher.
At the same time, the scale of the administration's plan - and the quick pace of the debate over it - has given pause to many Americans and lawmakers worried about its potential cost to taxpayers.

"We begin with a very important task, a task to stabilize the markets, to protect all Americans - and do it in a way that protects the taxpayer to the maximum extent possible," Paulson said early Sunday morning.

CNN's Jessica Yellin and Deirdre Walsh and CNNMoney.com's Chris Isidore and Tami Luhby contributed to this report.
An earlier version of this article incorrectly reported that Congress had publicly released a draft bill that CNN obtained.

First Published: September 28, 2008: 10:12 AM ET

Pirates Hold Ammunition Ship Hostage $20 Million Dollar Ransom

Source

The 5 year guarantee of gains from recipients

A Canadian Perspective On The Bail-out

Rescuing a financial system from toxic waste TheStar.com - Business - Rescuing a financial system from toxic waste

September 27, 2008 David OliveBusiness Columnist

By Monday, it appears, the U.S. Congress will have approved the biggest corporate bailout in history, amounting to $700 billion (U.S.), to rescue America's stricken financial sector.
The bailout's sponsor, irony of ironies, is free-market champion George W. Bush, who used the word "panic" in justifying a massive government intervention in the private sector, using language more alarming than any president since Franklin Roosevelt in the earliest days of the Great Depression.

The fear and urgency is justified. Total losses from the low-grade residential mortgages accumulated during the U.S.'s biggest-ever housing boom are now estimated at about $2 trillion (U.S.). Only a quarter of that financial toxic waste has been written off by the world's leading banks and brokerages, leaving the potential for utter global collapse very real without a government rescue mission of drastic proportions.

And given the complexity of the work to come, getting on with the task can't begin soon enough. What comes next is more difficult than prising the bailout funds out of a reluctant Congress, and entrusting the U.S. Treasury Department with the task of buying from lenders their most toxic "assets" – that is, failed or delinquent loans for which there usually are no other buyers, and which are inhibiting lenders from providing the liquidity on which capitalism runs.

No one, least of all the managers of the crippled institutions, knows the true value of these dismal loans and other soured investments that Treasury will buy. "The reality is that we are not going to know what the right price is for years," Boston bond manager Andrew Feltus of Pioneer Investments told the New York Times on Wednesday. "It might be 20 cents on the dollar or 60 cents on the dollar, but we won't know for years. No two pieces of paper are the same."

And there is a lot of paper, about 1.1 million troubled residential mortgages of a total of 51 million U.S. home mortgages. The soured assets, as you've heard repeatedly during this crisis entering its 13th month, are monstrously complicated.

Mortgages were bought by Wall Street banks and brokerages from mortgage brokers in the field, then repackaged, or "bundled," into as many as three dozen different types of bonds. These were flipped, for lucrative upfront fees, to other banks, brokerages, pension funds, hedge funds, insurance companies and credulous buyers worldwide, until the diaspora found its way into university endowments funds, the portfolio of the Caisse de dépôt et placements du Québec and UBS AG, Europe's largest bank, which has already taken a staggering $36 billion in losses on its U.S. securities.

Some of those bundled bonds were re-bundled as "collateralized debt obligations" (CDOs), a type of derivative now trading at pennies on the dollar, since placing an accurate value on these black boxes is impossible. Citigroup Inc. carries its CDOs on its books at 61 cents on the dollar, claiming they are of relatively high quality. But Merrill Lynch & Co., forcibly merged into Bank of America Corp. this month, firesaled $31 billion worth of CDOs earlier this year at just 22 cents on the dollar in a desperate bid to shore up its eroding reserves.

In a process increasingly referred to as the Great Unwind, Treasury minions will spend years cracking open the black boxes and tracing the ultimate assets on which the Wall Street-invented paper is based – a split-level in Lansing, Mich.; a tract-home development in suburban Phoenix; a luxury condo in overbuilt Miami. Treasury will then have to decide whether to take an immediate loss on a hopeless asset, or hold the property to maturity in hopes of an eventual rebound in the local real estate market.

The quandary for the Treasury is that if Uncle Sam pays a San Diego bank the undoubtedly inflated value at which the bank is carrying a troubled loan on its books, the bank is being rewarded for its fecklessness by U.S. taxpayers.

Conversely, if Treasury officials drive a hard bargain, paying less than the bank's claimed value for its impaired assets, the bank will have to take a writedown on the difference. That would eat into the bank's reserves, and make the bank even more gun-shy about lending to creditworthy customers – the very condition the massive bailout is intended to reverse.

There is arguably a silver lining to this catastrophe, which is that capital diverted for most of this decade to housing and consumer consumption, dating from the buying panic that began after the terrorist attacks of Sept. 11, 2001, when Bush exhorted Americans to keep shopping "or the terrorists win," can now be deployed more usefully.

Housing and shopping sprees at Target and Home Depot contribute little to the nation's productivity. Economic activities that strengthen America's competitive advantage have been starved of capital for years. These heavy investments in infrastructure, education, R&D, energy saving retrofits of buildings, and more efficient – and efficacious – delivery of health care.
"This crisis could become a chance to re-evaluate our priorities as a country," Business Week economist Michael Mandel argued this week. "Rather than stressing home ownership and consumption, we should focus on investment and innovation, which have a bigger long-term payoff."

Certainly there are more productive uses of capital than the eye-popping salaries and bonuses Wall Street managers accumulated in the fat years from knowingly peddling shoddy goods.
The new government controls on executive pay that are part of the extraordinary bailout plan under negotiation are a dagger planted in the free-market doctrine of the current Republican administration.

But without them, the rescue package urgently sought by Bush would have been politically impossible.

David Olive writes on business and political issues.

Congressional leaders and the Bush administration reached a tentative deal $$$$

LAUREN VICTORIA BURKE/AP
Secretary of the Treasury Henry Paulson, left, and Kevin Fromer, Assistant Secretary of the Treasury, arrive for a meeting in Speaker Nancy Pelosi's office regarding legislation on the financial crisis, Sept. 27, 2008, on Capitol Hill in Washington.

September 28, 2008 Charles BabingtonAssociated Press WritersAlan Fram

WASHINGTON – Congressional leaders and the Bush administration reached a tentative deal early Sunday on a landmark bailout of imperiled financial markets whose collapse could plunge the nation into a deep recession.

House Speaker Nancy Pelosi announced the $700 billion accord just after midnight but said it still has to be put on paper.

"We've still got more to do to finalize it, but I think we're there," said Treasury Secretary Henry Paulson, who also participated in the negotiations in the Capitol.
"We worked out everything," said Sen. Judd Gregg, R-N.H., the chief Senate Republican in the talks. He said the House should be able to vote on it Sunday, and the Senate could take it up Monday.

The plan calls for the Treasury Department to buy deeply distressed mortgage-backed securities and other bad debts held by banks and other investors. The money should help troubled lenders make new loans and keep credit lines open. The government would later try to sell the discounted loan packages at the best possible price.
At the insistence of House Republicans, some money would be devoted to a program that would encourage holders of distressed mortgage-backed securities to keep them and buy government insurance to cover defaults.

The legislation would place limits on severance packages for executives of companies that benefit from the rescue plan, but details were sketchy.

Also, the government would receive stock warrants in return for the bailout relief, giving taxpayers a chance to share in financial companies' future profits.
To help struggling homeowners, the plan requires the government to try renegotiating the bad mortgages it acquires with the aim of lowering borrowers' monthly payments so they can keep their homes.

The measure's main elements were proposed a week ago by the Bush administration, with Paulson heading efforts to push it through the Democratic-controlled Congress. Democrats insisted on greater congressional oversight, more taxpayer protections, help for homeowners facing possible foreclosure, and restrictions on executives' compensation.

To some degree, all those items were added.

At the insistence of House Republicans, who threatened to sidetrack negotiations at midweek, the insurance provision was added as an alternative to having the government buy distressed securities. House Republicans say it will require less taxpayer spending for the bailout.

But the Treasury Department has said the insurance provision would not pump enough money into the financial sector to make credit sufficiently available. The department would decide how to structure the insurance provisions, said Sen. Kent Conrad, D-N.D., one of the negotiators.

Money for the rescue plan would be phased in, he said. The first $350 billion would be available as soon as the president requested it. Congress could try to block later amounts if it believed the program was not working. The president could veto such a move, however, requiring extra large margins in the House and Senate to override.

Despite the changes made during an intense week of negotiations, the heart of the program remains Bush's original idea: To have the government spend billions of dollars to buy mortgage-backed securities whose value has plummeted as hundreds of thousands of Americans have defaulted on their home loans.

Senate Majority leader Harry Reid, D-Nev., said Saturday that the goal was to come up with a final agreement before the Asian markets open Sunday night. "Everybody is waiting for this thing to tip a little bit too far," he said, so "we may not have another day."

Hours later, when he and others told reporters of the plan in a post-midnight news conference, Reid referred to the sometimes testy nature of the negotiations.
"We've had a lot of pleasant words," he said, "and some that haven't always been pleasant."

"We're very pleased with the progress made tonight," said White House spokesman Tony Fratto. "We appreciate the bipartisan effort to deal with this urgent issue."