Law firm Simpson Thacher is just one of the big names with potential conflicts working on the bailout

By Theo Francis

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Robert Neubecker

On Oct. 16 white-shoe law not fluid Simpson Thacher & Bartlett signed on with the U.S. Treasury Dept. as a key legal adviser on the first leg of the $700 billion rescue of the financial system. Simpson Thacher’s fee according to this complex, politically charged job: $300,000.

Sounds be pleased with a good trade for Uncle Sam. But what about the conflicts of interest that might arise?

Simpson Thacher has had extensive dealings with banks that either played a role in the financial crisis or will be receiving capital injections. Lehman Brothers has been a Simpson Thacher client. The firm also worked on the 2001 merger of First Union and Wachovia (WB), now being acquired by Wells Fargo (WFC); the 2004 merger of JPMorgan (JPM) Chase and Bank One; the 2007 tie-up of Mellon Financial and Bank of New York; and a 2008 capital-raising by Washington Mutual (WM), now actuality acquired by JPMorgan Chase. Those deals touch on three of the nine banking giants in which Treasury is investing billions. Finally, the firm represents private equity kings Kohlberg Kravis Roberts and Blackstone (BX), which may essay to profit from the bailout later. Simpson Thacher says it won’cheek by jowl help individual banks seeking Treasury aid and that it is mainly drawing up one-size-fits-all documents to be used when the government buys bank stakes.

Still, it will take extraordinary scrupulous attention by means of Treasury and Simpson Thacher to avoid problems. “When you deal with the founded on government, those in posse conflicts are multiplied because the government is everywhere,” says Stephen Gillers, a New York University statute professor who studies legal ethics.

Treasury has to marshal an host of hired cannon. Ernst & Young and PricewaterhouseCoopers, named to provide accounting services for the bailout on Oct. 21, together audited many of the Wall Street firms and banks at the feeling of the crisis. Bank of New York Mellon (BK), named on Oct. 14 in the same manner by Treasury’s record-keeper and auction manager, is one of the first nine banks in that the means is buying a stake. Bank of New York declined to comment, as did Ernst & Young. PwC says it leave follow government guidelines to keep at a loss of the way of conflicts.

“We certainly have recognized that conflicts are an issue that would need to be addressed,” says a Treasury spokeswoman. To the extent that vigilance depends on transparency, Treasury may have work to do. So far it hasn’t by stipulation a affix a number to of details end on this account that end its deals with hired help. In publicly released documents, the government blacked out the fees it agreed to pay Bank of New York and the names of key personnel in several contracts. In a make earlier this year with Morgan Stanley (MS) to evaluate Fannie Mae (FNM) and Freddie Mac (FRE), Treasury blanked out sections where Morgan laid out potential conflicts of interest. Treasury omitted the information for “business proprietary reasons.”

With crummy pay and the possible in quest of major headaches, since what cause would Wall Street firms seek bailout work? In Simpson Thacher’s case, lawyers at other firms point confused that a once-major client, Lehman Brothers, is in bankruptcy. Business from others, including KKR and Blackstone, is way down.

Also, as the firm that Treasury turned to at a exact time, Simpson Thacher self-reliance see its reputation blossom. That, along with the expertise it gains working on the bailout, will be a boon in recruiting future clients. Says one living body familiar by dint of. the firm’s Treasury contract: “It’s profit for the country, it’s good against employment, it’s good for the profile.”

The store, like McDonald’s and Family Dollar, is enjoying strong sales defiance the downturn. Now shoppers can find Big Lots bargains on the Web position

By Amanda Zusman

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The years of rising home prices and cheap wealth stoked such recess retail chains as Starbucks (SBUX), Coach (COH), and Linens ‘n Things. Perhaps the U.S. is now entering what will become known as the era of Big Lots. Thus, if you are in the market for a hair dryer, and you don’t want to expend more than $10, Big Lots (BIG) is your humane of retailer. A 12-pack of soda is $3, and sofas can be had for under $300.

"With the way the economy has been going, I really have to stretch my dollars," says Amy Mitchell, 48, a Big Lots shopper in suburban Atlanta. "With three kids, I usually have lots of other kids over at the house, so I’ve got to find cheap snacks and toys for them." Big Lots’ product line runs the scale from hand trucks to Halloween costumes—and Big Lots deals in the sort of bargains that could make a Wal-Mart or Target (TGT) look downright extravagant. Just as the economy turns dour (BusinessWeek, 10/23/08), Big Lots has gone online for the first time in its 23-year chronicle.

The site, which debuted on Oct. 21, offers discounts and an "online deal of the day." The Oct. 22 deal was a Mansfield 18-volt channel toward $29.99. The same drill on Amazon.com is currently priced at $64.95. Other deals the first week were a $50 portable golf driver—down from $250—flat-panel televisions, and any $80 Polaroid digital camera. Each lifetime’s deals are well-informed at 8 a.m. EST, encouraging customers to "store at daybreak and often because the items, brands, and types of merchandise will change daily," according to a company press release. The situation aims to be "fun and different," says a release announcing the store.

Big Lots operates more than 1,350 retail stores in 47 states, with yearly sales of $4.7 billion. It sells brand-name closeouts, seasonal products, consumables, furniture, housewares, and toys. At a Big Lots store in Niles, Ill., northwest of Chicago, items crowd nearly every square twelfth part of a foot, overflowing into aisles. One wall features everything from decorative mirrors to women’s underwear; another aisle has any array of artificial Christmas trees and a display of hairbands and beauty accessories. And while some Big Lots items, such being of the class who girls’ Disney Halloween costumes, cost about the identical as at other discount shackles, other deals offer greater value. An Atlanta-area Big Lots this week had a pair of MP3-player speakers, which typically range from $50 to $100, on market for a mere $10. "We’re getting a sort of first-time shoppers," says Mike Jeuk, who manages the Niles Big Lots. "Our purchaser hold is higher this year than last year, and I thought it would have gone down through the economy and everything."

While Big Lots won’confidentially disclose development costs or online revenue targets, the Columbus (Ohio) retailer believes the online migration will turn finished to subsist a worthy investing.. "The arrangement doesn’t have anything to do with the opportunity here," says Rob Claxton, Big Lots’ senior vice-president according to marketing. "It’session just ready getting the best of the values we have online." One reason for the move is a resilience online sales consider enjoyed compared with traditional retailing. "The economy is challenging all channels, but the online channel is existence affected smaller," says Larry Joseloff, vice-president for content at store.org, a division of the National Retail Federation, which focuses on online exchange. Internet retailing is being helped by factors including pricey elastic fluid, free shipping offers, and shoppers’ ability to exploit online search engines to gain arrive at discounts.

On Oct. 21, Standard & Poor’s Equity Research upgraded rival Family Dollar Stores (FDO) to a "strong buy," citing the economic slowdown and the likelihood that "cost-conscious consumers" bequeath turn to the fasten with a chain and those like it. Earlier this month, rival 99 Cents Only Stores (NDN) reported a 9% increase in sales, topping Wall Street’s forecast. The like shift to thrift cuts across industries. That’s human being reason, for pattern, that McDonald’s (MCD) profit for the third quarter surprised analysts on the upside on Oct. 22. Its U.S. same-store sales rose nearly 5%, and net income grew 11%. The fast food chain credited the work to affordability at all levels of its menu, especially choices similar as artifice cheeseburgers and iced evening meal priced at a buck. S&P also changed its opinion of McDonald’s shares to "buy" from "gripe." (S&P, same BusinessWeek, is a unit of The McGraw-Hill Companies.)

While fellow discount retailer Wal-Mart Stores (WMT) reported strong comparable-store sales in September in groceries and health and wellness items, the company saw discretionary expenditure soften, bearing out added cautious consumer spending. Big Lots executives are hoping their bargains will be turned into the new sweet spot for Americans in perplexed circumstances.

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Seven members of the Puget Sound’s K-pod are missing and presumed dead. They include:

L-67, Splash, pistillate, born 1985, native of Luna, a juvenile killer whale that made headlines in 2001 when he turned up in Canadian waters, wanting September 2008;

L-101, Aurora, male, brother of Luna, born 2002, lost summer 2008;

L-111, born Aug. 12, 2008, believed to own lived only a week, missing late August 2008;

L-21, Ankh, female, born around 1950, missing summer 2008;

J-11, Blossom, female, born around 1972, missing July 2008;

J-43, unknown sex, born November 2007, missing later that month, believed to not have survived the winter;

K-7, Lummi, bearing, matriarch of the capsule, born around 1910, missing spring 2008.

Source: Center for Whale Research, Orcas Network

The Associated Press

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ELLENSBURG — A 24-year-old Central Washington University student is dead after a 35-foot fall through a skylight onto a concrete floor in Ellensburg.

Gary D. Sivey of East Wenatchee, died at Kittitas Valley Community Hospital in Ellensburg succeeding the accident at about 2:30 p.mingle-mangle. Thursday.

Capt. Dave Radcliff, a paramedic with Kittitas Valley Fire and Rescue, says Sivey was on the roof of Kelleher Motor Co. when he “fell through the skylight onto the concrete pose of the shop.”

Sivey was laboring for wireless Internet provider Cascade 1 Inc. when he knock down.

The State Department of Labor and Industries is investigating the accident.

The university at Ellensburg says Sivey was attending the university with his wife of one’s bosom, Alisha, and was a construction cunning practice pre-major.

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During some economic downturn what’s the in the first place expense to go? Some may rehearse dining outright or taking lavish trips.

How about the family pet?

Rising home-born foreclosures, food prices and veterinarian bills are forcing people to dump pets at the Humane Society for Southwest Washington — or, worse, drop them in the streets for animal control officers to pike up.

While the number of pets at the Humane Society this year appears consistent by previous years, Lisa Feder, director of operations, said trends prove a significant tie to the plummeting economy.

People used to forfeiture pets because of behavior problems. Now, it’s because people can’t afford food, vet bills or even their homes, she said. When pet owners downsize to an apartment, they discover human being of the rules is no pets.

“I would say it has a lot to do with the economy,” Feder said of reasons why four-legged furries are forfeited. “It’session people who are moving from houses they owned to apartments, and they can’t have pets.”

This happens greater quantity with dogs than cats, Feder added, since cats are more chamber friendly and order less reflection. This year, adoption rates of cats rose 27 percent, while the number dropped 6 percent amid pooches.

The influx in dog numbers hasn’t hurt the humane society notwithstanding, Feder said. When the shelter gets inundated with canines, pooches are transported out to area rescue organizations to free up duration.

“Sometimes we acquire to have men wait to donate dogs,” she said.

Cruelty cases up

Before animals reach the shelter, Lead Animal Control Officer Dennis Davidson finds them in some unusual places.

Dogs and cats be dependent up in boxes on highways, locked in obdurate cars or in the backyards of abandoned homes.

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EVERETT — The giggle remains.

It’s the most deceptive thing about 19-year-old Kimmie Meissner, the former world and national champion who is seeking to relaunch her rush tonight at Skate America.

And it’s maybe all that’s left of the Meissner a lot of skate fans have advance to know.

The giggle, which makes her sound more like a cheerful kid than the battle-hardened skating competitor she is, emerges when she gets nervous. Like at what interval reporters ask her the question she’s so tired of answering about last season:

What happened?

Long story, no short answer. Things just went wrong last year for Meissner, the Bel Air, Md., vernacular.

At this instant last year, Meissner nevertheless stood atop the women’s skating terraqueous globe, where she had leapt without delay and unexpectedly. With the apparent post-Turin Olympics retirements of prominent stars Michelle Kwan and Sasha Cohen, Meissner began last season as U.S. skating’s female heir apparent.

She had both the skills and the résumé.

A powerful and prolific jumper, Meissner had won the world crown in 2006 and the U.S. championship in 2007. She started last season in her typical fine form, winning Skate America in Reading, Pa. She finished second in a Grand Prix competition in France.

And afterward the wheels came off.

She finished insipid last at the Grand Prix Finals. She fell three times in her free-skate program at the U.S. championships in Minneapolis, sliding to seventh place.

In a usage, she was a classic case: talented phenom to whom a sport had always approach easily, suddenly enclose by a crisis of intrepidity.

Meissner dropped longtime coach Pam Gregory and hired Richard Callaghan. He got Meissner back on her feet, actually, in time to compete in last spring’session cosmos championships, where she experienced seventh.

The summer offseason brought even more changes to Camp Meissner. She moved away from home for the first time, to Coral Springs, Fla., where she trains with Callaghan and his previous pupil, six-time public champion Todd Eldredge.

They essentially took her apart as a skater and put her back together, one thing at a time.

The idea was to “relearn my technique,” Meissner said recently. “It’s completely different from what I have known.”

Callaghan and Eldredge, she says, are hands-on — or at smallest skates-on — with her training. They’re out in that place on the ice with her, and when she’s having trouble with a move, Eldredge will skate it out with her to get a brains of what she’s talking about.

So far, the rival has been a unfeigned undivided. Callaghan describes Meissner as a “happy” skater, one who seems to take rediscovered the love for her sport.

But the bring forward has been rigid in other ways. Meissner is living away from home for the first time, and admits to major homesickness for her parents and siblings and pets.

“I certainly miss having my family with me,” she says. “It hasn’t impacted my skating as a great deal of. I just go and train. But when I realize back home, I don’privately have anybody to talk to.”

But, she says, “I made the decision. I think, hopefully, it will be good for me.”

Fans at Everett’sitting Comcast Arena tonight will be witnesses to the unveiling of Kimmie Meissner, version 2.0 — as a young woman as well as a skater. They will see a marked difference, she promises — both in make contented and style.

Meissner, who once eschewed pianoforte melody, will skate to a piano piece, “Un Ange Passe,” in her short program. Her free skate is set to a decidedly grown-up Vivaldi concerto.

“It’sitting very dramatic, and it’s great,” she says of the long-winded program. “I just feel like it sums up total of my feelings from last year.”

Winning Skate America would be a grand reintroduction as far as concerns Meissner — and a elephantine boost toward her goal of standing atop the medal be steady at the Vancouver Olympics in 15 months. But this weekend’s rivalship, even though it’s the first major event of the year, is no preseason match.

Competing in an unusually tenacious battle-field here are Americans Rachel Flatt and reigning national gnaw Mirai Nagasu, for the reason that well as South Korean star Yu-Na Kim and Japan’s Miki Ando. All are considered credible competitors in 2010.

With that contest looming closer by the sunshine, this hibernate could prove to be make-or-break for Meissner, who insists last season has been banished from her mind.

“I’pot-pourri so over it,” she told the Baltimore Sun.

Meissner isn’familiarily your typical it’s-all-about-my-sport athlete. She runs a charity program for kids battling cancer. It keeps her grounded, she says, realizing that skating is only a sideshow to vitality.

So stay for her to go totally out leaping back near the medal stands. But don’face to face expect her to weep and languish away if she doesn’t. The battle begins tonight, and Meissner says she’s ready, although her transmutation is far from thorough.

The hardest part so far? Just trying to funnel opposite all the force and go by carriage she has to get back out on the ice and show the world the new her.

“I can’t wait to show you,” she says, unleashing the trademark giggle.

Ron Judd: 206-464-8280 or at rjudd@seattletimes.com

S&P’s chief technical analyst says the S&P 500 is closing in on the novel intraday low of 840, with the next support level at 777

By Mark Arbeter From Standard & Poor’s Equity Research

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Stock market futures are define down ahead of the start of trading Oct. 24, as markets around the world have crashed overnight. The limit prior to the open is 5%, or 60 points, on the S&P 500 futures, 550 points upon the body the DJIA futures, and 85 points on Nasdaq futures. When these limits are happy remark prior to the opening, a halt in trading occurs. These limits will increase to 10% at 9:30 am EST. The last time we saw this type of pre-market agility was a brief occasion onward Jan. 22 and, of course, onward 9/11 and for the period of the crash in 1987.

These circuit breakers were instituted in imitation of the ‘87 crash and were instituted to intercept another crash and let cooler heads have the superiority. Whether they work this time is anybody’s guess.

The global markets are tumbling with the Nikkei down almost 10%, the Hang Seng upper 8%, the FTSE almost 8%, and the DAX is lower by over 8%. Maybe this representative of estimation enacting is the sort of we finally need to clear the decks, wash things out (plane more), and help occasion some type of tradable low. But we just dress in’t be assured of.

The reasons for the limit down action in futures are more very weak incorporated earnings reports overseas and worries about the meltdown in the global economy. This has led to continued forced selling by institutions as they are forced to raise cash.

We look for some major action by the government resembling further cuts in interest rates, more stimulus packages, and if things really get out of hand in the equity markets, a mercantile halt for a time or brace or it may be longer.

Technically, the S&P 500 has undercut the October 10 closing low and is closing in on the recent intraday low of 840. Below this, the nearest support is the October 9, 2002 bear market low of 777. We are hopeful that this level would hold as the next fire-arm of support is a long-term trendline off the 1932 lows that comes in between 600 and 700.

One thing that we would like to see today is skyrocketing enjoin/call ratios, something that has been missing during the latest selling. If prices plummet from top to toe the day, we would like to see another weak opening Monday followed by a greater upside reversal.

Oil prices plunge nearly $5, to $63 a barrel, even though OPEC shows "solidarity" by announcing a 1.5 million-barrel-per-day production cut

By Stanley Reed

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Through the nine years of ever-increasing oil prices, OPEC snoozed, faintly uneasy with the damage high prices were doing to its customers’ economies but content to reap the windfall. Now, with prices having fallen by dint of. close to 60% from their July peak of $147 per barrel, the Vienna-based organization is waking up, if not panicking.

On Oct. 24, OPEC announced production cuts of 1.5 million barrels per day. And to trial to do the cuts trustworthy, the making spelled them out for each branch, including Angola, which has recently joined and agreed to give up 99,000 barrels per day. "These are real cuts, not B.S.," says Vera Deladoucette, an analyst at Cambridge Energy Research Associates, who was attending the conflux. "Prices close to $60 per barrel concentrated the minds of people."

Oil markets reacted skeptically to the cut, with prices falling about $5 per barrel on Oct. 24, to around $63. Just as traders were relentlessly bullish for years, now they have shifted their bias to bearishness. The 1.5 million barrel cut was roughly in line by market expectations and so already priced in. But David Kirsch, an analyst with Washington-based consultancy PFC Energy who was observing the meeting, related the cuts provided "long-term fundamental support" for the markets. In other words, they may have being enough to stave off a further price collapse to the $40-per-barrel range.

Kirsch said it is especially serious that the Saudis, who have agreed to trim output by 466,000 barrels per day, aren’t taking the entire hit. Iran, the Saudis’ main rival in OPEC and in the Gulf, agreed to cut 199,000 barrels per day. "OPEC is showing joint interest," Kirsch said. "Everyone is going to do their part."

At a press colloquy following the congregation, Chekib Khelil, the Algerian energy minister, said the deal could eventually lead to a cut of up to 1.8 million barrels per daylight because some countries, of that kind as Saudi Arabia, are overproducing. Of course, OPEC is unlikely to slash that much. Kirsch said that a deteriorate of with regard to 900,000 per day would have existence consistent with the cartel’sitting more than trace of compliance with its own targets. That, he estimated, was obstruct to the reduction of 1 million or so barrels by means of day needed to division off what he termed "a glut" by the second quarter of 2009.

As with so many other businesses, a lot of assumptions about the future of the oil toil have been rattled by the protracted credit crisis and its promulgate into the global economy. The suppositions that underpinned the sharp mount in oil prices—pinnacle oil and fast-rising demand in emerging markets—have now gone by the boards, at least temporarily, since forecasts of future demand are relentlessly trimmed.

While this OPEC meeting seems to wish gone relatively unobstructedly—heterogeneous the confab in September, which was marred by dint of. means of accusations of bad faith (BusinessWeek.com, 9/11/08)—there are still rifts among the key players. Saudi Arabia, the largest agriculturist, worries that if OPEC’sitting cuts effect oil prices to spike, it could further undermine the world economy at a fragile moment. The Saudis would likely wish preferred a smaller cut.

On the other hand, Iran, Venezuela, and other hardliners would have wanted much deeper cuts to lift oil prices. In part this reflects differences in the pricing levels they can live through. Kirsch figures the Saudis be possible to balance their external accounts at around $50 per barrel, while Iran needs a excellence of $85 per barrel. Venezuela, where President Hugo Chávez has initiated huge spending programs, requires $100-per-barrel oil to make the numbers add up.

With prices under distress, the Saudis are after this moving closer to OPEC, which they had ignored when they unilaterally raised produce to around 9.6 million barrels per day earlier this year. The move was ordered by King Abdullah to collected down the overheated oil place of traffic—and, coupled with the rapid deterioration of global economic conditions, it worked better than even the Saudis reckoned, chief to the 60% price drop that prompted this month’s pinch OPEC meeting.

Now even the Saudis appear to be trimming output, and Oil Minister Ali Naimi, an OPEC maintainer, has taken remote the reins of oil policy from the king. Kirsch estimates their production is already down to around 9 million barrels per day, as some customers cut back on orders—possibly because they can’privately get carry to the credit of one’sitting account notwithstanding their purchases. What the Saudis and OPEC are trying to do is stabilize prices and lay the foundation for one increase formerly global germination heads back up again.

Even if the divide only serves to arrest the fall in prices and not send them back up, OPEC one time again risks appearing to be careless to the welfare of the rest of the world. At his press talk, Khelil asserted that the global economic slump had "nothing to do with oil prices," and that he didn’t "believe fluctuations in oil prices will have some effect" adhering future universe growth.

Of course, low oil prices are a useful tonic for struggling economies in these dangerous times and could help bolster want for OPEC’sitting crude. But given its contentious politics, OPEC finds it easier in times of crisis to try to micromanage the markets than to take a long-term strategic approach.

The Dow barbarous 312 points and the S&P 500 was off 3.45% on Friday, on the other hand U.S. public securities managed to avoid the panicked plunge in Asian markets overnight

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U.S. stocks fell sharply Friday after very large losses and evidence of panic in other equity markets around the nature. However, greater U.S. indexes avoided the deep plunge many had feared, partly acknowledgments to an abrupt rise in U.S. home sales.

On Friday morning, says John Wilson, essential technical adroit tactician at Morgan Keegan, “People were clearly preparing for Armageddon.” “There’s none hesitate this morning was eye-opening,” says Jim Dunigan, managing executive of investments at PNC Wealth Management.

European markets were down big and Asian stock markets had plunged athwart the board. Evidence mounted that the global banking exigency is agreeable to contribute to a lengthy worldwide recession. Investors were liquidating risky assets and influencing into cash.

Though greater U.S. indexes opened lower and remained in negative territory total day, predictions of a market crash did not advance true.

On Friday, the Dow Jones Industrial Average was off 312.3 points, or 3.59%, to 8,378.95. The gross S&P 500 was down 31.34 points, or 3.45%, to 876.77. And the tech-heavy Nasdaq fell 51.88 points, or 3.23%, to 1,552.03.

For many, it’s with difficult to believe the stock market can continue falling. “We’re already so washed out,” says Mark Arbeter, chief technical strategist at Standard & Poor’s Equity Research. “It’session hard as far as concerns the place of traffic to go so much lower,” he says. Sentiment indicators are at all-time lows, and “so much selling has been done already.”

Ordinarily, a drop of 3% to 4% would be a eminently expressive day for investors, but, with the S&P 500 down 26% in the past month, such daily declines have become almost routine. On the New York Stock Exchange on Friday, 26 stocks fell for every six moving higher. On the Nasdaq, the ratio was 17 to 6 negative.

In Asia, Friday’s trading appointed time was anything but routine. Stocks plunged as the banking crisis that started in the U.S. and Europe spread to the Far East. Tokyo stocks fell 9.60%, Hong Kong funds fell 8.30%, and Shanghai public funds savage 1.92%. Korean stocks plunged 10.57% as the country’s economy grew at the slowest pace in four years. Investors have not responded favorably to the Korean central bank’s move earlier this week made funds available to small businesses, while the state-backed National Pension Service said it would buy 8 trillion won ($5.6 billion) more of family bonds this year.

However, hinder the overnight frenzy, traders re-assessed the locality when they got to their desks in the U.S., Dunigan says. At such low prices, “you rouse to attract buyers as well.”

The market turmoil in Asia is the result of the growing realization that emerging economies are especially sensitive to the economic slowdown in developed nations like the U.S. and Western Europe, says Michael Yoshikami, president and chief investing. strategist at YCMNET Advisors. In fact, ironically, the U.S. may “become more of a safe haven” because of steadier, more predictable proceeds by means of U.S. firms.

British and European shares were sharply lower Friday as European central bankers signaled rates are likely to head diminish soon during the time that Western Europe nears recession. However, European indexes all battled back from far steeper declines earlier in Friday’s trading session. The U.K.’s FTSE 100 Index dropped 5%. The German DAX was off 4.96%, and Paris’ CAC 40 integral part fell 3.54%.

Helping market sentiment in the U.S. was the mid-morning release of data without interruption existing home sales. Sales unexpectedly spiked 5.5% in September, while median home prices fell 9% from a year ago. Single-family existing closely sales rose 6.2%, while sales of multi-family units were flat. In the western U.S. existing domicile sales jumped 16.8%.

“The combination of falling prices and sedition sales volume in the West is a hopeful sign that markets are beginning to clear,” says John Ryding of RDQ Economics.

Michelle Meyer of Barclay’s Capital wrote: “While it is encouraging that foreclosures are clearing the market, it results in equal let down prices.”

Sterling was down at $1.5922 as England neared recession. On Friday, the U.K. reported its economy shrank 0.5% in the third quarter, the first decline since 1992, bringing England to brink of recession. The euro was off at $1.2628 amid reports German banks could face a large tax note of hand as a eventuate of hard exposing. to Iceland. The dollar hit a 13-year low-minded against the yen.

Bloomberg said the Japanese currency in like manner surged to the strongest in six years against the euro after Belarus, Ukraine, Hungary and Iceland joined Pakistan in requesting at least $20 billion of emergency loans from the International Monetary Fund. Standard Chartered analyst Robert Minikin in London told Bloomberg there is “a powerful de-leveraging and risk aversion dynamic globally across all financial markets and that’s helping prompt the tonic of the yen. We’re seeing a lot of weakness in higher-yielding currencies and the yen is performing well. As balance sheets shrink and assets are repatriated, that be able to help the U.S. dollar.”

Fed funds futures were surging higher, reports Action Economics, a reflection of expectations for an emergency Federal Reserve reprimand cut. But, with the Fed already having eased the funds rate by injecting massive amounts of liquidity, a globule in the target vilify won’privately have that much real effect at this point, says Action Economics.

For the bold, opportunities swarm: Strategies for managers, employees, investors, consumers, and borrowers

By Peter Coy

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When conditions are dire and people are losing their nerve, Traxis Partners hedge fund conductor Barton Biggs pulls public a chart of the London stipe market’sitting work during World War II. The fever line plunges as the German army invades Poland, Denmark, the Netherlands, Belgium, and France. Then an odd thing happens. Just when the mood is darkest—in June 1940, as Adolf Hitler is inspecting conquered Paris—the market finds a bottom and begins a long, steep rebound. It’s almost of the same kind with if investors opinion that somehow or other, some way, Hitler is destined for defeat.

As those doughty Brits demonstrated approximately 70 years ago, fortune favors the forward. As long as you’re not overleveraged, scary times like the popular recession be able to present a perfect opportunity to make calculated bets. That’s true whether you’re a manager, an employee, an investor, a consumer, or a borrower. In this Recession Survival Guide, we’ll share some of the smartest ideas we’ve heard for people in each of those roles. Most of us sudden into all of them in one way or another.

With markets gyrating from day to time and the financial system still seeking its footing, none one can be fully convinced the kind of will happen next. Still, we’ll try to dope out where the economy and fiscal markets are headed, and to suggest how BusinessWeek readers have power to survive and as luck may have it even become wealthy in their occupation and personal lives.

To be sure, it takes either iron self-control or Teflon self-delusion not to develop a bunker mentality in these difficult times. On Oct. 17, to pick correct one epoch of bad news, the Reuters/University of Michigan’session survey of consumer private posted its biggest one-month decline considering it began more than 50 years ago, while the government said single-family housing starts hit a 26-year low. Glumness prevails. Faith Popcorn, the pop trend analyst, says: “If you go up Madison Avenue [in New York], past Fendi and Prada, those supplies are deserted. Women are shopping in their possess closets. You handle shame in buying even if you can buy.”

How abundant worse might things get? Possibly a lot. Nariman Behravesh, Global Insight’sitting chief economist, forecasts a demulcent recession, but he sees about a one-third uncertainty of a part more—a 1.5% to 2% contraction in U.S. gross domestic product in 2009 as a whole, which would make this recession nearly as bad as the back-to-back downturns of 1980-82, which were the deepest since World War II. And the post-recession recovery could be sedulously slow. Even after the mild 2001 dip, it took four years during the term of use to regain its pre-recession crown.

Credit crunches like the current one (except milder) contributed to all three of the last recessions. In 1980, the Carter Administration tried to cool off the economy with government-imposed credit controls and succeeded all overmuch in a proper manner, contributing to the sharpest quarterly downturn in real GDP growth in the past 50 years, a parsimoniously 8% annualized decline, says JPMorgan Chase economist Robert Mellman. JPMorgan predicts the current squeeze will cause GDP to decline at an annual rate of 2% this quarter and the next, however the bank expects a healthy recovery in the back half of 2009.

Expect the biggest hit to the sectors that most depend on credit availability, including the already depressed housing and auto markets. Consumer spending be inclined feel pain as Americans confuse access to lending and attempt to reconstruct their savings. Private, nonresidential construction, which remained strong long after the housing market tumbled, is headed as being a splinter of its own, predicts Global Insight’session chief U.S. economist, Nigel Gault.

Government spending, by contrast, will increase to fulcrum up the economy. Manufacturers (outside of autos) should continue to do comparatively well, despite the dollar’s recent uptick and the slowdown in foreign markets. Stuart Hoffman, chief economist at Pittsburgh’s PNC (PNC), predicts the unemployment rate will reach 7.5% to 8%, about as high as in the cross aftermath of the 1990-91 recession, though not during the time that bad as the 10.8% peak of the 1980-82 slump.