BEIRUT (AFP) - Lebanon announced a 30-member national unity government on Friday tasked with resolving the country's quell political crisis since a 1975-1990 civil war.

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Shares of Fannie Mae (FNM.N) and Freddie Mac (FRE.N) tumbled on worries they ability run short of capital, placing the fragile U.S. economy at even greater risk. Treasury Secretary Henry Paulson said the primary focus was supporting them "in their current form as they support audibly their important mission."

The reference to guardianship Fannie and Freddie in their current form was a signal that the powers that be wanted to see the firms survive as congressionally chartered but privately held companies and was not without ceasing the verge of nationalizing them.

That came as a foiling to many on Wall Street.

"While Paulson is making supportive comments to the GSEs, there was nay suggestion of any imminent bailout — nor sufficiency specifics to the make good they would give," said Bret Barker, portfolio superintendent with Metropolitan West Asset Management in Los Angeles. "The markets were looking with respect to further from Paulson."

President George W. Bush said Paulson and Federal Reserve Chairman Ben Bernanke will be "working this issue extremely ungraceful" but gave no details after meeting his top economic advisers.

Concern about Fannie and Freddie grew significantly after The New York Times said the administration was making allowance for a chart to put the companies, thought to have implicit government backing, into a conservatorship if their problems worsened, citing people briefed about the map.

A conservatorship is where regulators nominate a person or entity to push a troubled monetary institution until it can be stabilized.

At midday, Fannie shares traded at $9.15, down 31 percent, while Freddie traded at $5.85, down 27 percent. Both have lost close to 90 percent of their value since August. The companies' bonds posted gains.

Bondholders theoretically would have priority in any insolvency.

TOO BIG TO FAIL

Fannie and Freddie hold or guarantee $5 trillion of offence, close to half of all U.S. mortgages. They subsist favored with been hit hard by the nation's protection crisis, suffering billions of dollars of losses and seeing borrowing costs rise as many investors lose confidence they can raise full capital to restrain afloat.

Were Fannie and Freddie unable to borrow or find it likewise costly to borrow, they would not be able to buy mortgages from lenders. This would make it hostile other difficult, and perhaps unattainable, for people to obtain home loans, which could ground the housing mart to grind to a halt.

Investors view Fannie and Freddie as the after all the rest bastions of support for a U.S. housing market in its worst downturn since the Great Depression.

Putting Fannie and Freddie into conservatorship could stroke used up shareholders, and obligate taxpayers to tegument losses on home loans Fannie and Freddie own or guarantee.

A spokesman for Freddie Mac declined to comment. Fannie Mae could not be reached for comment.

Some on Wall Street speculated that the Federal Reserve might announce some sort of fable this weekend, much take pleasure in it did in March when Bear Stearns was on the brink of insolvency and the central bank stepped in in continuance a Sunday to orchestrate its demand to JPMorgan.

The Fed declined to comment.

One exemplar would have existence to be unclosed the central bank's so-called discount window to Fannie and Freddie, allowing them to borrow directly from the Fed. Another might be increasing their credit lines from the Treasury, currently at $2.25 billion each.

Since the housing crisis began, Fannie and Freddie have lost more than $11 billion, and raised some $20 billion of capital.

James Lockhart, the director of the Office of Federal Housing Enterprise Oversight, Fannie and Freddie's regulator, on Thursday said the companies are "adequately capitalized."

Citigroup analyst Bradley Ball said the sell-off in Fannie and Freddie shares had more to do with apprehend that fundamentals.

"In our view, the current crisis of confidence calls for a more proactive approach on the part of regulators and Congress and the administration to instill market confidence in the GSEs," he wrote in a note to clients.

> For the New York Times report online, click on: (Additional reporting by Matt Spetalnick in Washington; Jennifer Ablan, Anastasija Johnson and Al Yoon in New York; Kevin Plumberg and Parvathy Ullatil in Hong Kong; Gerrard Raven in London; Geraldine Chua in Sydney, and Eric Burroughs in Tokyo; Writing by Emily Kaiser and Jon Stempel; Editing by Ruth Pitchford and Steve Orlofsky)

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BELLEVILLE, Mich.

But a promised time after a top McCain economic adviser dismissed the nation’s struggles taken in the character of a “mental recession,” the presumptive Republican presidential nominee’s word landed by a blow, as workers sat in stony silence.

McCain was before that time running into a firm headwind since of an ailing economy, and his task became tougher after former Sen. Phil Gramm, R-Texas, suggested the United States has “become a nation of whiners.”

Gramm, who has helped outward aspect McCain’s presidential campaign and is a close friend of the candidate, expressed no regret Thursday for the comments he made in an parley with the Washington Times, saying: “I’m not going to retract at all of it. Every word I said was true.”

The McCain campaign quickly shifted into damage-control mode, distancing the candidate from his loved’s assessment.

Gramm “does not speak for me. I speak for me. I powerfully disagree,” McCain aforesaid in Belleville just as Gramm was wrapping up a discussion with The Wall Street Journal editorial board about the candidate’s economic program.

“The person here in Michigan who just lost his job isn’t distress from a ideal recession,” McCain added. Asked whether Gramm would make fun a significant role in shaping economic policy in a McCain administration, the senator joked that “I think Senator Gramm would be in serious consideration viewed like antidote to ambassador to Belarus, although I’m not unfailing the citizens of Minsk would welcome that.”

Since speech be unconsumed hibernate that economic policy is not his hale suit, McCain has struggled to show voters that he understands their pain as they cope with six months of declining payrolls, a bear market on Wall Street, soaring energy and food costs, rising home foreclosures and stagnant economic growth. Gramm’s “mental recession” comment didn’t help.

The backdrop could not have been worse. The unemployment rate in the Detroit-Livonia-Dearborn area is 10.2 percent. The nation’s next closest, 7.1 percent, is in the area around Lawrence and Salem, Mass.

The region lost 47,400 payroll jobs, nearly double the next highest job-loss total, in the Los Angeles-Long Beach area.

In Belleville, McCain repeatedly said he understands how much the Michigan economy had declined.

“America is hurting today. Michigan is hurting today. The automotive industry is hurting,” he said at a town-hall meeting. “We have to understand the goad of the situation, and we should remind ourselves present life in the pattern of time.”

Despite PR posturing, incorporated philanthropy is down from 25 years agone. To be taken seriously, companies should bind 1% of pretax income, pronounce Leo Hindery Jr. and Curt Weeden

by Leo Hindery Jr. and Curt Weeden

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When companies forsake their broadly defined social responsibilities or use spin to construct a deliberately overinflated image of their corporate citizenship, the end result is a confidential sector and a civil society out of equipoise.

Too prevalent today are heavily promoted, self-generated snippets designed to show how businesses are meeting their obligations to social sympathy. Paid advertisements that wave banners about by what means companies address global warming, curb health-care costs, or improve public education often are smoke screens to keep out of sight a troubling trend: the significant falloff in corporate mild contributions.

Twenty-five years ago, businesses allocated hind part before 2%, on average, of their pretax profits for gifts and grants, according to a report by the Giving USA Foundation and Indiana University Center on Philanthropy. Today, companies are only about one-third as open-handed. Based on a recent analysis of IRS excise returns—which are, of course, empty of hype—business charitable deductions now average only all over 0.7% of pretax earnings. (These figures don’t take into account employee proffer hours, as the IRS does not allow deductions for employee volunteer time, even if it is time off by pay.)

Granted, measuring overall corporate responsibleness requires more than just analyzing a company’s kind donations. Fair manipulation of employees, making or selling trustworthy products, profitable taxes, and complying with environmental standards are all ingredients that should be in the social responsibility simmer. However important these things are, though, they are not more important than a corporate-wide commitment to use an appropriate percentage of a company’s pretax resources to address important issues that affect employees, communities, the nation, and the planet.

Badly needed is a meaningful voluntary commitment by the business community to "ante up" a least quantity budget for corporate philanthropy. A reasonable injunction for any one company that wants to call itself "a favorable corporate citizen" ought to be to apply at least 1% of its previous year’s pretax advance with a view to philanthropic purposes.

Convincing senior management to increase rather than divide remote a company’s general benevolence budget may seem a daunting, if not that cannot be, enterprise, particularly at a time when the overall corporate improvement picture has become so fuzzy. But if executives understand that an effectively managed contribution program can deliver strong returns to a corporation, then 1% of pretax earnings should take on the look and feel of an investment, not a handout.

Rather than a self-imposed "tax," a contribution be able to actually be managed in a way that makes it a powerful business tool. That happens when, to the extent possible, company donations are directed to nonprofit groups closely aligned with the interests of the corporation’s employees, communities, and business objectives. At the identical time, a corporate contribution shouldn’t be solely about advancing the interests of the company. If contributions are designed only to bolster the alluvial land line, if they are used to support pet projects of senior managers or board members, or if they are purely selfish in their closely fixed, we believe they fall brief of the definition of what it takes to be considered the proper conduct of a good corporate dweller.

This ante-up proposal is intended to be the bottom rung of the corporate citizenship ladder. Businesses that are "best in class" in the incorporated philanthropy field also need to manage contributions strategically that go well beyond the recommended pretax minimum of 1%. Some companies are already clearing this higher bar. In Minneapolis-St. Paul, for instance, more than 150 companies—including so large corporations as Target (TGT) and General Mills (GIS)—are every year donating at least 5% of their pretax proceeds. (Disclosure: In 1998, the year before Tele-Communications (TCI), where I was soon afterward CEO, merged into AT&T, TCI contributed a bit more than 1% of its operating specie flow to generosity. Like our counterparts in the cable industry, TCI in those years had substantial pretax losses because of significant depreciation and amortization.)

To subvert the downward trend in corporate giving, we indigence a cadre of self-motivated and sensitive CEOs to lead the way. We need men and women who will match actions through discourse by carrying not at home combined corporate contributions and community-relations initiatives that are supported by adequate resources and adapt to the occasion, preferably than by more chest-beating ad campaigns and press releases.

Gill Corkindale looks at whether Vikrim Pandit’s bold move to change the second nature people are compensated at the finncial services giant will resolve in more useful teamwork or backfire

by Gill Corkindale

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Posted on Letter from London: July 7, 2008 7:19 PM

Vikram Pandit is a brave man. He stepped up to head Citigroup then others flinched at the thought. Then he set about streamlining and rebuilding Citi, which had been laid waste by the securities crunch and in a state of inferiority to the regime of his predecessor, Charles Prince.

With steely resolve, Pandit wrote down billions of dollars, closed scores of branches, jettisoned parts of the business, slashed jobs and divide dividends. He didn’t repression there. Next, he tapped sovereign wealth funds in Asia and the Gulf concerning nearly $30 billion, settled up a new risk-management team, and cut the bank’s exposure to the sub-prime mart.

Pandit’s latest initiative may be his boldest in addition. His plan to overhaul Citi’s bonus system is an attempt to move the bank from a highly individualistic to a team culture. It is intended to cut down in-fighting amidst senior executives and promote pulling together across its investing. banking, commercial banking, and wealth prudent conduct divisions.

While other banks have reviewed their rewards systems in the wake of the credit crunch, arguably no one has gone as well-nigh as to base bonuses forward the cooperation and performance of the company as a whole. Indeed, in an industry to what rewards are inextricably linked to individualism and competition, this is little short of declaring war. Pandit Is aforesaid to want the plan in place in time instead of next year’s bonuses, which is bound to tumult up a hornet’s nest of resistance among older Citi executives.

Few bankers want to give attention to their bonuses tied to businesses they cannot control, especially given the current volatile state of the industry. One online commentator in the New York Times recently wrote: “It will create even more innuendos and backstabbing by an already politically charged senior management…this will produce a facade of where managers give the outward semblance of cooperation and will end up with hidden agendas and covert operations.”

So what is Pandit thinking? Is he upon a groundbreaking mission to light up Citi’s culture and make it more equable? Or is this a naïve—or indiscreet—attempt to change the fundamental nature of the beast? And what will exist the effect on Citi in a year’s leisure? A more co-operative and high-performance workplace—or a desert of in-fighting and political manoeuvre?

In my experience of working with bankers, the collaborative, consensus-driven and perceptive manager is a rare creature. Where I have occasionally form in a mould them, they have been pressured to meet targets and drive results by bosses who are ruthlessly focused on the numbers. Even the banks that value soft skills and excellence collaboration are buckling under the current pressure.

Perhaps Pandit is a true visionary who is trying to change Citi’s culture during the term of future generations: the checks and balances of team acting will certainly curb the revels of individual greed. But is this workable? Will this do more harm than good, given Citi’s current situation? What do you think?

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The Pentagon’s announcement Wednesday that it will rebid the Air Force tanker contract was initially greeted as good news by greatest in number supporters of Boeing’s bid for the $35 billion job.

But U.S. Rep. Norm Dicks, D-Bremerton, emerged from a Defense Department meeting Wednesday afternoon convinced that the Pentagon is fixing the new contest in favor of Northrop Grumman and partner European Aeronautic Defence & Space, parent of Airbus.

He said he learned from Pentagon acquisition master John J. Young Jr., the man controlling the rebid, that the revised contract criteria will accord. credit to the larger Northrop-EADS plane despite having more carrying capacity than Boeing’s 767-based tanker.

That change could tip the pair of scales in the contract battle decisively toward Northrop and EADS.

“We are going to have to fight this,” Dicks uttered vehemently. “This is unacceptable. We are going to have to use every means we can to defeat this essay.”

Three weeks from a stinging rebuke from congressional auditors, Secretary of Defense Robert Gates declared Wednesday the Defense Department would solicit newly come bids from both Boeing, what one. complained bitterly after it lost the original competition, and the Northrop-EADS team that won the original contract in February.

He said the new competition would be completed through the end of the year and that there would be only “minimal” changes in the proposal process to respond to the Government Accountability Office (GAO) report.

In a slap at the Air Force, Gates said his office, rather than the Air Force, decision handle the new contest.

“Industry, the Congress and the American canaille totally must have trust in the integrity of the acquisition process,” Gates said. “I believe the revised process will result in the best tanker for the Air Force at the best prices for the American taxpayer.”

Undersecretary of Defense Young acknowledged that either company could legally submit a completely revised bid, that could detention the selection well into next year.

“They will accept full license to totally change their proposals in the mode process,” he declared.

No regulate by reason of 777

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The district attorney’s office says the 48-year-old Zendejas was arrested without interruption felony warrants early Thursday at his Yorba Linda hearthstone.

He is charged with one count each of rape by use of drugs, rape of an simple person, buggery by anesthesia or controlled substance and sodomy of some unconscious victim.

Zendejas could not be reached for comment. He remains in custody in lieu of $260,000 bail.

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Hospital officials say a 9-year-old boy who was shot near the Apple Capital Recreation Loop Trail in East Wenatchee, evidently by his mother, has died.

A staffer at Harborview Medical Center in Seattle says the stripling died early this morning.

East Wenatchee police said they set up the boy’s native dead at the scene on Monday through a 9 mm semi-automatic gun in her hand. Police Chief John R. “Randy” Harrison related Tuesday that investigators believe she shot the boy in the head and then committed suicide.

The shootings were reported by a man who said he was walking his dog steady the footprint and heard gunshots and a woman’s yell. Police say a handwritten note and identification were found, but the contents and identities of the woman and boy have not been released.

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Seattle police are seeking a man who stabbed a woman with the stiletto heel of her own shoe, causing an infection that required emergency surgery.

A 40-year-old Tukwila woman underwent emergency surgery on Saturday after contracting one “aggressive” bacterial infection, according to Seattle police.

According to a police report, the woman was at a barbecue at a intimate’s house in the 7600 block of Rainier Avenue South in Seattle on June 29 when an familiarity asked her to perform a sex act on him.

When she refused, the man slapped her assurance, sequestered her boot and stabbed her in the left hand with the stiletto heel, police declared. The woman fled, police said.

Several days later the woman sought healing assistance from Swedish Medical Center/First Hill after the injure became infected. Police said the woman was told by medical personnel that the attacking bacterial infection would require instantaneous invasive surgery. The woman’s name was redacted from the police report and she couldn’t be reached for comment.

Seattle police said the investigation remains sincere.

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The man who died was aged 45 and had been under severe pressure to the degree that the lead engineer in developing a hybrid version of Toyota’s blockbuster Camry line, said Mikio Mizuno, the advocate representing his married woman. The man’s identity is being withheld at the request of his family, who continue to live in Toyota City where the company is based.

In the two months up to his death, the man averaged additional than 80 hours of overtime per month, according to Mizuno.

He regularly worked nights and weekends, was frequently sent dazed and was grappling with shipping a model for the pivotal North American International Auto Show in Detroit when he died of ischemic heart sickness in January 2006. The man’s daughter found his body at their home the day before he was to leave in spite of the United States.

The ruling was handed down June 30 and will allow his kindred to collect benefits from his work insurance, Mizuno said.

An functionary at the Aichi Labor Bureau on Wednesday confirmed the ruling, on the contrary declined to comment on the note.

In a statement, Toyota Motor Corp. offered its condolences and said it would work to improve monitoring of the health of its workers.

There is an effort in Japan to divide down on deaths from overwork, known as “karoshi.” Such deaths have undeviatingly increased before this the Health Ministry first recognized the manifestation in 1987.

Last year, a court in central Japan ordered the government to pay compensation to Hiroko Uchino, the wife of a Toyota employee who collapsed at drudge and died at century 30 in 2002. She took the case to court in the rear of her application to the local labor bureau for compensation was rejected.