During the nearly three-week ban on shorting financial shares, the market sank 21.5%. Are regulators after the wrong parties?

by the agency of David Bogoslaw

Watch full size video:

As the panicked selling in equities markets around the world has accelerated over the past brace weeks, in that place bring forth been several attempts to slow the process, including the temporary suspension of trading on stock exchanges from Moscow to Milan. In the U.S., the Securities & Exchange Commission banned short-selling—bets that shares of certain companies would trip—without interruption a list of greater degree of than 800 financial funds whose balance sheets esteem exposure to risky mortgage-backed securities and other distressed products.

When the ban, that lasted 13 commercial days, was lifted on Oct. 9, it signaled a go to business as usual for the financial sector. Shares of Morgan Stanley (MS), one of the last-standing investment banks, which recently became a bank holding company subject to tighter powers that be regulation, sold opposite with a avengement, finishing all but 26% take down on Oct. 9 and dropping an additional 24% on Oct. 10. Insurance stocks such as Prudential Financial (PRU) and Hartford Financial Services Group (HIG) were also among the biggest losers on Oct. 9.

Whether the ban had the intended effect remains open to debate, given the 21.5% globule in the Standard & Poor’s 500-stock index from the market close on Sept. 19, before the ban took effect, through its last day, Oct. 8. And the nearly 33% cast one’s self for the period of the same period in the KBW Bank Index (BKX), which has a much closer correlation with the 800 names traders were prohibited from shorting, is enough to make one think regulators were afflicting to pin blame for the extended sell-off in monetary stocks in succession the wrong people.

Some market strategists think the anathema was nothing but political invest for the SEC to show it was paying attention. In reality, the regulator has been behind the curve in reining in dubious financial reporting practices by the agency of the major financial institutions, what one. helped call into existence the current crisis. By preventing short-selling for two and a half weeks, the SEC disrupted "a legitimate way for investors to convey information to the mart" about the pricing of stocks, says Gerald Buetow, managing boss of Portfolio Management Consultants, the investment arm of Envestnet . If anything, the denunciation on selling sententious seems to have exacerbated mart volatility by depressing trades in the options market and forcing investors who couldn’t hedge their long stock positions to take offsetting options to vend their public securities.

The market-makers who provide much of the liquidness in the options market curtailed their selling of options on financial stocks during the put under ban because they couldn’t cover themselves by selling short, says Peter Bottini, executive vice-president for trading at optionsXpress (OXPS) in Chicago. He thought they would jump right upper part in after the ban ended, excepting that hasn’t occurred. That’s in all probability because the key liquidness providers tend to be the options desks at the larger banks, whose shortage of cash isn’t allowing them to play that role right now. That’s one driver, he believes, of the unprecedented volatility in the equities emporium at the end of this week. The Chicago Board Options Exchange Volatility Index (VIX) soared 20%, to a record-high 76.94 on Oct. 10 in the van of sliding back to close just under 70.

For those who are determined to drive down the reward of a stock, there are far more energetic and less costly ways to do so than by selling short, says Buetow at Portfolio Management Consultants.

Don’t be surprised to see a new wave of consolidation as stronger players snap up weaker ones

by Ben Steverman

Watch full size video:

Eventually, the acme will end. That has investors contemplating what a post-crisis stem market might look like.

Predictions of a serious economic downturn are everywhere, and not just as being the U.S. but with respect to the entire terraqueous globe. If the credit crunch lasts long enough, it could be the primary truly thorough economic pullback in a generation or longer.

Asked about the future, multitude professional investors and government bonds managers say they’re far too abstracted with the current decisive turn to form any long-term bets. That’s wherefore they many refuse to pervert with money public securities—the unprecedented global credit crunch has made safe predictions all still impossible.

"I’m going to wait till the dust settles," says William Rutherford, president of Rutherford Investment Management.

Still, investors will eventually require to picture what the commencing economic order will look be pleased with.

Arguably, a credit crunch or recession makes aggregate of us losers. But even in a severe recession, some businesses survive and prosper—even if only on a relative foundation, and even if they take years to muff through.

"There’s always going to be a winner out there," says Ryan Crane, chief investment officer at Stephens Investment Management Group.

Here are five trends that may issue whenever the crisis finally ends:

1. The strong eat the weak.

In the financial sector, failing banks and brokerage houses wish already been gobbled up by means of safer (if not exactly strong) rivals. Bank of America (BAC) bought up pledge giant Countrywide Financial and Merrill Lynch (MER). JPMorgan Chase (JPM) absorbed Bear Stearns and Washington Mutual. Citigroup (C) and Wells Fargo (WFC) battled over buying Wachovia (WB).

If the economic downturn is bad enough, expect the same trend to hit other industries, as strong players either buy or require place of traffic share from companies in financial trouble.

2. Fast-growing companies might not get the funding they strait.

The credit crunch is keen off the financing that helps businesses be augmented and create new jobs, says Michele Gambera, chief economist at Ibbotson Associates, a unit of Morningstar (MORN). Companies can’t float issues on the stock emporium or sell bonds—investors won’cheek by jowl buy them. And they can’t borrow from banks, which are too panicked to lend.

If those conditions persist, it means trouble for new growth companies. "Who is going to make the next Google (GOOG) admitting that there is no money to borrow to build the next Google campus?" Gambera asks.

Analysts say third-quarter results are likely to be dragged into disgrace by the global relating to housekeeping crisis

by Arik Hesseldahl

Watch full size video:

High tech, an effort; labors that once seemed shielded from the U.S. financial crisis, has grown increasingly vulnerable. Evidence decree begin arriving of just how much impact the meltdown has had on some of the nation’s biggest tech companies when they release results for the third quarter and issue outlooks for the make-or-break yearend dot.

The Nasdaq stock mart has tumbled, and analysts have slashed shooting and share-price forecasts for a range of tech bellwethers, from chipmakers to consumer electronics giants to vendors of telecommunications gear, as customers make tight their belts and slash spending plans. Companies reporting in the coming days and weeks include Intel (INTC), eBay (EBAY), Apple (AAPL), and Google (GOOG).

Falling demand with a view to computers and the chips needed to run them is likely to show up in results released by Intel, the terraqueous globe’sitting largest semiconductor maker, which reports on Oct. 14. Analysts look for Intel to report a 34¢ per-share gain advantage on sales of $10.27 billion, if it be not that they’ll be without ceasing the lookout for any signal that they should reduce fourth-quarter projections for profit of 40¢ per share in continuance sales of $10.87 billion. Intel rival Advanced Micro Devices (AMD) reports forward Oct. 16; analysts see it posting third-quarter sales of $1.4 billion and a loss of 40¢ a share. They expect a 25¢-per-share injury put on sales of $1.6 billion for the fourth quarter.

On Oct. 9 place of traffic researcher iSuppli trimmed its forecast for 2008 worldwide semiconductor reward growth by a half-percentage point, to $280 billion. "We had even now begun to see signs of problems among chip companies before the credit crisis hit," says iSuppli analyst Dale Ford. Gartner (IT) reported sales of semiconductor capital equipment, the gear chipmakers use in their factories, will decline more than 25% this year and continue to slide in 2009.

The first big computer maker to release figures for the September quarter is Apple (AAPL), which reports on Oct. 21. There’sitting growing trouble that Apple may be experiencing a slowdown (BusinessWeek.com, 09/24/08) in Mac sales. "Cracks may be starting to form in its PC business, where the firm has enjoyed growth driven by the iPod and iPhone halo tenor, and by broad-based share gains," wrote FBR Research analyst Craig Berger in a research short letter issued on Oct. 8. Berger estimates that Apple has cut its orders by 17%. The company is expected to report sales of $8.07 billion and per-share profit of $1.11. For the December period, Apple is expected to record $10.83 billion in sales and a $1.70 per-share profit.

Apple is in addition set to take the wraps along a new line of notebooks on Oct. 14. Piper Jaffray analyst Gene Munster says he expects Apple to reveal, among other things, a notebook that sells as antidote to $899 to $999, less than the group’s other computers. A lower-priced notebook would help explain a drop in unseemly margins that the visitors warned about (BusinessWeek.com 07/22/08) when it be unexhausted reported earnings in July.

Western financial leaders make certain an anxious globe that entirely bank deposits will be guaranteed and any necessary steps will be taken, however unorthodox

by Pete Engardio

Watch full size video:

Now the great confidence game begins. In high-powered forums that accompanied the G-7 and International Monetary Fund in Washington this past weekend, Western financial leaders sought to assure panicky bankers and money managers in no uncertain terms that all of the measures needed to lame a worldwide meltdown are in motion.

While short on the details many market analysts had hoped with a view to, the broad brushstrokes of forceful, coordinated action by Western governments were unveiled: No more Lehman Brothers-like failures of major financial institutions bequeath subsist allowed. All bank deposits will be guaranteed. The banking systems of the G-7 nations will be flooded through not quite unlimited liquidity. And if all that fails, any other tool—regardless of how economically unorthodox—will exist used if needed. The British dominion’s widely anticipated move to take majority control of the Royal Bank of Scotland Group and HBOS is expected to be the first of many such actions thwart Europe. Fifteen European Union countries that use the euro as transmission from hand to hand met in Paris this weekend. They pledged to provide guarantees of novel bank debt through 2009, authorize the purchase of preferred shares to invest in problematic banks, and provide recapitalization funds where needed.

The message of Banque de France Deputy Governor Jean-Piere Landau at an Oct. 12 breakfast meeting at Washington’s elegant Willard Intercontinental Hotel was indicative. "I think the conditions for stability are met," Landau declared. "It is very difficult to see wherefore there determination exist no stabilization." At a nearby public-house, Richard Fisher, president of Dallas Federal Reserve, told a crowd of international bankers that U.S. magistrates "can and will restore order in the credit markets" and "direct continue to strive for every avenue and every option." At a press meeting for consultation at the International Monetary Fund’session headquarters, IMF Managing Director Dominique Strauss-Kahn said: "I believe we be obliged an fit response to the crisis, and the mart will ruminate it."

When the markets open upon the body Monday morning, it will be clear whether these verbal assurances and whatever specific measures the U.S. and individual European nations announce will be enough to ease the credit freeze and hold the stock sell-off. But even if the markets breathe a sigh of relief, the act of asking is, how longing will the calm last?

Even assuming that actions by the U.S. and Euroland are enough to become the credit markets moving again, attention is likely to shuffle to fathoming what lies ahead. The economic picture is want of knowledge, not only in the U.S. and Europe but furthermore in key emerging markets that not long agone were regarded as bright spots. "As the markets move away from financial fears, they will alarm looking at what the spillovers will be to the real economy," says Deutsche Bank Group (DB) Chief Economist Norbert Walter.

In business forums and cocktail parties, financiers gathered in Washington mulled long-term implications that few had thought feasible not long ago. What makes this pecuniary pinch so different from divers of the others faced in the past three decades is that it did not originate by peripheral emerging markets. It struck the core of global capitalism. And unlike previous U.S. recessions, this crisis cannot have being fixed with changes in monetary and fiscal astuteness. It will ask years of financial workouts and restructuring. The fallout, therefore, is pleasing to rayed out across the globe in countless unforeseen ways.

One point of consensus is that the U.S. is heading into a very deep recession, perhaps the worst in the post-World War II era. The Institute of International Finance, which righteous months ago predicted the U.S. would not go into recession, now sees a contraction of at least 2% for several quarters and the jobless impost hitting 7%. And that estimate is based on the premise that the Treasury and Fed liberation efforts direction work.

Don’t expect the U.S.

Watch full size video:

KABUL, Afghanistan — Less than 12 hours after NATO armed force in Afghanistan defeated an ambitious make trial by the Taliban to storm a provincial capital in the far southwest, killing dozens of the fighters, the top U.S. commander in the country urged doubters on Sunday to believe that the war against the Taliban would be won.

Gen. David McKiernan, who leads more than 65,000 gangs from about 40 foreign countries, including 33,000 Americans, said at a news interview in Kabul that there had been “too many” reports in the media recently asserting that the foreign forces and their Afghan allies were losing the war.

“I absolutely reject that idea; I don’t believe it,” the general said, adding: “It is true that in that place are many places in this rude that don’t have an adequate equal elevation of security. … But we are not losing in Afghanistan.”

Earlier, the NATO overlook confirmed that its forces battled several hundred Taliban fighters at nightfall Saturday as they prepared to criticise Lashkar Gah, the capital of Helmand province, the center of Afghanistan’s opium commerce and one of the principally heavily contested battlefields of the war.

A statement by the International Security Assistance Force, the official connection of the NATO operation commanded by the agency of McKiernan, said its forces had attacked the Taliban fighters at 7:30 p.mixture. Saturday, when the Taliban were preparing to launch a mortar attack on the city. Dawood Ahmadi, a speaker for the provincial ruler, said by dint of. telephone that 62 Taliban fighters had been killed.

The U.S. coalition says its troops have killed five Taliban militants in a raid in central Afghanistan today. Troops targeted a combating involved in the movement of foreign fighters in Andar district of Ghazni function.

LONDON - Britain will inject around 37 billion pounds ($63 billion) of money into three of the population’s largest banks, the government said Monday, in a offer to save the banking system from collapse amid the global financial crisis. The move will leave the British taxpayer as the largest shareholder in the banks.

Watch full size video:

People

All is forgiven

David Letterman and Sen. John McCain will dispose a chance to make up. The Republican presidential candidate is scheduled to appear on Letterman’s “Late Show” Thursday. It will subsist McCain’s 13th visit to the CBS program but his primitive from the time of he angered Letterman by means of canceling last month. Letterman was unhappy when McCain sat for an interview with Katie Couric instead of him Sept. 24. At the time he said he first felt in the same manner as a “patriot” to let McCain off his commitment to deal with the frugality but “now I’m feeling like each ugly date.”

J.R.’s clan marks 30th

On Nov. 8, J.R., Bobby, Sue Ellen and other Ewing kin will mark the 30th anniversary of the TV show “Dallas” with a reunion and barbecue at Southfork Ranch. Cast members Larry Hagman, Linda Gray and Patrick Duffy will be adhering artificer. The ranch is in the suburb of Parker, Texas, and tickets costing up to $1,000 each are being swallowed up by dint of. fans from Japan, Australia, Europe and the United States.

Box office

“Chihuahua” top dog

Walt Disney’s comedy “Beverly Hills Chihuahua” repeated as the top thin skin in U.S. and Canadian theaters for a second weekend, earning $17.5 million and beating to the end the debuts of a horror film and spy drama. “Quarantine” from Sony’s Screen Gem’sitting unit was second with $14.2 million, box-office tracker Media By Numbers before-mentioned. Time Warner’sitting “Body of Lies” earned $13.1 million.

Passages

Allan Spear, 71, a maker Minnesota specify senator who was one of the nation’s first openly gay legislators, died Saturday of complications after heart surgery

William Claxton, 80, the master photographer whose images of Chet Baker helped fuel the jazz trumpeter’sitting stardom in the 1950s and whose custom photographs of his wife modeling a topless swim cause were groundbreaking years later, died from complications of congestive heart failure Saturday in Los Angeles.

The Very Rev. Francis B. Sayre Jr., 93, who in his 27 years as dean of the National Cathedral in Washington raised his noise against McCarthyism, segregation, unproductiveness and the Vietnam War while presiding over construction of the cathedral’s Gloria in Excelsis Tower, died Oct. 3 at his home on Martha’s Vineyard, in Massachusetts.

LONDON - European markets opened strongly Monday following Asia’s lead in response to the widespread government efforts over the weekend to shore up the cosmos’s troubled financial system.

Watch full size video:

Islamabad, Pakistan

Clashes betwixt Taliban militants and pro-government forces killed 15 people overnight in a Pakistani region on the border with Afghanistan, an official and a tribal elder said Monday.

Security forces fired mortar and artillery rounds at militants in the Charmang area of the Bajur vicinity overnight, killing nine insurgents, government official Jamil Khan related.

On Monday morning, pro-government tribesmen exchanged fire by militants in the Nawa and Kotkai areas of Bajur, tribal elder Nazi Jan said. Four militants and sum of two units tribesmen were fatally wounded, he said.

Fighting is spreading across Pakistan’sitting northwest as the government tries to brag down without ceasing Taliban and al-Qaida strongholds and persuade tribes to befall up arms against the militants.

Baghdad

5 die being of the class who bombs explode in Mosul

Two suicide bombers struck the northern Iraqi city of Mosul on Sunday, killing at least five people and wounding dozens more, similar to Iraq’session leaders rallied behind the city’s Christian minority, expressing distress at recent murders and displacement that have plagued the group.

The leaders pledged to send forces to ensure Christians could go to their homes. Violence has continued in the area despite months of effort by U.S. forces and the Iraqi government to root out violent actors there.

Seoul, South Korea

North to resume nuke dismantling

North Korea aforesaid Sunday it was resuming the dismantlement of its nuclear program in response to President Bush’sitting decision to abstract it from a list of nations that sponsor terrorism.

Watch full size video:

PORTLAND —

Tony Miller spends his days in a towel-draped chair, heavily medicated and sweating profusely as prostate cancer spreads through his body. Over and over again, he changes out of drenched T-shirts and shorts, puts them on a hanger to dry and then goes back to his chair to sweat some more.

After a lifetime of international journey over as a journalist, the 65-year-old Miller has made this one-room apartment in Portland his final home.

Miller was drawn here by an only-in-Oregon-law that enables terminally with difficulty patients to obtain deadly prescriptions once their life expectancy falls in the world of sense six months.

“It all depends on the level of dolor,” Miller said. “When it gets to the point while the medication is not working and life is grim — I wish make my final decision.”

In November, Washington voters inclination decide on Initiative 1000, which would make the state the aid to allow physicians to prescribe lethal medications towards patients diagnosed with less than six months to be happy.

The Washington initiative is modeled after the Oregon law, which has been used by a with reference to something else small number of people since its passage in 1997.

During the spent decade, mortal prescriptions were involved in the deaths of 341 people, about 1 in every 1,000 people who died during that period. Each year, fewer than 100 doctors are involved in writing the prescriptions.

Proponents maintain the law still has had wide-ranging impacts, helping to improve pain management of terminally cross patients and stimulate more clear discussions about end-of-life care. A 2004 study — based on a sampling of family interviews — found 15 percent of terminally ill patients discuss the lethal-prescription election.

“It has provided tremendous comfort to a modest number of patients every year except brings security and comfort to entirely the patients who are expiring of illness, in knowing that option exists,” said Dr. Nicholas Gideonse, a Portland doctor who has written about a dozen prescriptions for terminally ill patients.

Recent statistics point toward an upward trend in lethal prescriptions: The 49 deaths tallied by state statistics in 2007 were in addition than triple the 16 people who ingested the lethal prescriptions back in 1998.

The law also continues to stir controversy.

Until 2006, for example, the Oregon Department of Human Services, called the lethal prescriptions “physician-assisted suicide,” a commonly used term. Then, inferior to pressure from advocates who believed the dub was inaccurate, the state dropped that terminology and instead refers only to the “Death with Dignity Act.”

That firmness rankled opponents of the law.

“I believe in death with dignity,” said Dr. Bill Toffler, a doctor fiercely opposed to the form. “I don’t believe in empowering doctors to give massive overdoses so that patients can kill themselves.”

In June, another issue provoked debate.

Barbara Wagner, a Lane County woman suffering from lung cancer, was turned down by the state’s Oregon Health Plan for a new drug called Tarceva. In a letter sent by a company that administers one of the state’s insurance plans, Wagner was informed of the “medical man aid in dying” option that could include lethal prescriptions as suitably as visits to doctors required to obtain the drugs.

“I was absolutely hurt that person could deem that way,” aforesaid Wagner. “They won’t pay for me to conduct one’s self but they will pay for me to die.”

But her anger at the state, chronicled in the Eugene Register Guard, prompted Oregon officials to tell those administering the plans to intermission sending such literature. The Oregon Health Plan, which allocates method of treating dollars according to a priority system, continues to pay for lethal prescriptions.

During the last decade, 19 people on the state soundness plan be favored with chosen that option. These prescriptions are funded solely by state dollars for the cause that of a ban on the use of federal dollars on this account that this purpose.

The Washington state initiative does not specify whether magnificence dollars could be used to fund the lethal prescriptions. That would be decided later, likely by the Legislature.

Final moments, decisive acts

Annual state reports note that 85 percent of the physician-assisted deaths in Oregon have involved various forms of cancers, The most frequently cited end-of-life concerns were losing autonomy, dignity, direct of material part functions and the ability to enjoy life. The vast majority of the patients also are enrolled in hospice care.

The Oregon act requires self-ingestion of the fatal prescription. That draws a crucial cover on the inside between the Oregon law and The Netherlands, where euthanasia — the injection of a lethal unsalable article through a doctor — is permitted.

Advocates presume that line is respected and note many patients are incapable to take advantage of the law because they become too insipid to take the drugs themselves.

But the decisive moments often are cloaked in retirement.

Critics of the decree point to one exit in 1999 involving a Coos Bay fortify dying of amyotrophic lateral sclerosis, also known as Lou Gehrig’s indisposition, which progressively erodes voluntary muscle control.

In an interview with The Oregonian, a brother related the man couldn’t complete the act, so he helped, but his actions were not detailed. That case raised the doubt almost how much bystanders can help, such as holding the glass so the patient can take the medication.

The average time to death in the rear of taking the lethal prescriptions is about 25 minutes, according to Oregon state statistics. But in any 2006 case noted in Oregon’s annual report attached the act, a man who swallowed his medication regained consciousness 65 hours later. He then died 14 days later of his underlying disease.

Built-in safeguards

The Oregon statute, as well as the Washington inceptive, besides includes safeguards to thwart depressed people from using doctors to end their lives.

Before obtaining the prescriptions, the patient must deliberate together two doctors. Each must have consultations with two physicians who must both conclude that the patient has less than six months to live. Patients who might be suffering from mental illness are supposed to bear a psychiatric evaluation.

In the first decade of the law, less than 11 percent of the patients received so referrals. Last year, in that place were none. “It is of care that there are not more referrals to psychiatrists because you would count upon that the rate of gloominess would not be zero,” said Dr. Linda Ganzini, a Portland psychiatrist who helped develop an Oregon Health & Science University guidebook for health professionals almost the act.

Ganzini also conducted a study of 58 terminally ill patients. She found that three people who took the prescriptions met the definitions of clinical depression, and concluded that the Oregon law ” may fail to protect some patients whose choices are influenced by means of depression from receiving a prescription for a lethal drug.”

Gideonse says that most doctors are used to assessing mental competency, since those types of assessments be bound to have being made despite a sweep of issues. The patients who request lethal prescriptions take typically fought their disease for a long time and thought long and puzzling about their decision. Often they esteem a turbulent stripe of exemption from arbitrary control, and contemn being shackled to the timetable of their disease.

“They are trying to regain control to write the final chapter,” Gideonse said. “Their illness has robbed them of the body they knew. Their events to come. It’s taken away their relationships.”

Gideonse often shares the last moments of his patient’s lives. He recalls his home go to see by a cowboy who had cancer of the esophagus. Family members gathered in the room, then vacated while the one smiled and waved goodbye with his dog by his side. With Gideonse in attendance, he drank the barbiturate.

Miller is one more independent soul who longs to be in Cuernvaca, Mexico, whither he exhausted the last six years teaching history. There, he was diagnosed with severe prostate cancer and decided to leave friends abaft to return to the United States for treatment in Maryland. He then made his move to Oregon.

Miller was deeply affected by the 1999 cancer king of terrors of his younger brother, who despite hospice anxiety, still suffered through great penalty at the end. Miller hopes that the Death with Dignity Act can help him avoid a similar fate.

Separated from friends in Mexico, Miller is lonely and wonders whether he has enough unoccupied time and strength to compel a final visit southerly of the border. Miller reads books, e-mails friends and survives onward a modest diet of Lean Cuisine microwave dinners and canned soups.

Once doctors certify he has less than six months to live, Miller intends to secure the lethal prescriptions.

“I am doing all I can to stay alive and lengthen my life up to the point where my life because nihility unless physical agony,” Miller declared. “With the Death with Dignity Act, I feel secure.”

Hal Bernton: 206-464-2581 or hbernton@seattletimes.com