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U.S. employers cut payrolls by 240,000 in October, much more severely than expected, while September registered the biggest monthly loss in jobs in nearly seven years, according to a government report on Friday that showed U.S. labor markets were sharply deteriorating.

NEW YORK (Reuters) - Stocks fell on Wednesday as worries about the weakening global economy returned to center stage just a day after the historic presidential election. President-elect Barack Obama was immediately faced with gloomy economic news, including reports showing deep cuts in employment by private employers, possibly foreshadowing weakness in the government's employment report on Friday. Other data showed companies planned layoffs at the highest level in nearly five years. Boeing Co was the biggest drag on the Dow, falling 7 percent, after more delays for its key 787 Dreamliner. The concern over the depth and length of a...

UNITED NATIONS—Diplomats and economists are pressing for new global financial rules, seeking an update of the World War II-era system created at New Hampshire's Bretton Woods. Nobel Prize-winning economist Joseph E. Stiglitz of Columbia University told the U.N. General Assembly that "this is a global crisis and it requires a global response." U.N. General Assembly President Miguel d'Escoto Brockmann convened a debate on the global financial meltdown to position the world organization squarely at the center of a possible fix. Development economist and former U.N. official Sakiko Fukuda-Parr of the New School said that "global solutions are needed." At the...

Lobbying Assault Gears Up Over Worry About Taxpayer-Subsidized Consolidation The Treasury's bailout plan is fueling a long-simmering war between financial institutions, prompting fears among small banks that big banks getting rescue money will be encouraged to buy smaller rivals. Big banks say the purchase of smaller, ailing institutions by larger ones promotes the recovery of the sector. But representatives of some 8,000 community banks -- the bulk of which remain financially sound -- worry that a taxpayer-subsidized consolidation could sweep up healthy institutions that are too small to fight back. Small banks said they will launch a lobbying assault on...

Freedom Bank, Bradenton, Florida, was closed today by the Commissioner of the Florida Office of Financial Regulation, and the Federal Deposit Insurance Corporation (FDIC) was named receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Fifth Third Bank, Grand Rapids, Michigan, to assume all of the deposits of Freedom Bank. The four branches of Freedom Bank will reopen on Monday as branches of Fifth Third Bank. Depositors of the failed bank will automatically become depositors of Fifth Third. Deposits will continue to be insured by the FDIC, so there is no need for customers...

Pre-eminent economist Anna Schwartz thinks the shortcomings of the U.S. bailout plan will only lead to further problems in the credit market. ANNA SCHWARTZ, CO-AUTHOR WITH Nobel Laureate Milton Friedman of the seminal A Monetary History of the United States, has worked with the National Bureau of Economic Research since 1941, and remains an adjunct professor emeritus at the Graduate Center of the City University of New York. About to turn 93, she has spent most of her professional life studying how the changes in money supply interact with inflation -- both within the United States and abroad. When it...

Autumn's market mayhem has left the world's financial institutions nursing losses of $2.8tn, the Bank of England said today, as it called for fundamental reform of the global banking system to prevent a repeat of turmoil "arguably" unprecedented since the outbreak of the first world war. In its half-yearly health check of the City, the Bank said tougher regulation and constraints on lending would be needed as policymakers sought to learn lessons from the mistakes that have led to a systemic crisis unfolding over the past 15 months.

NEW YORK/DETROIT, Oct 27 (Reuters) - General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz) and Cerberus Capital Management have asked the U.S. government for around $10 billion in an unprecedented rescue package to support a merger between GM and Chrysler LLC, two sources with direct knowledge of the talks said on Monday. The government funding would include roughly $3 billion in exchange for preferred stock in a merged automaker, according to one of the sources, who was not authorized to discuss the matter publicly. The U.S. Treasury Department is considering a request for direct aid to facilitate the merger...

One of the few things going up since the financial meltdown began? The U.S. dollar. .... Since June 30, the greenback is up 26 percent against the euro, 28 percent against the British pound and 59 percent against the Australian dollar. Looking at it another way: On July 15, the euro hit an all-time high of $1.599 and people were speculating about whether it might rise to $2. Today, the euro buys only $1.25, and people are wondering if it could fall back to $1, or parity, with the dollar. .... Early in the year, the dollar fell on fears...

Zimbabwe inflation hits 231 million percent Oct 9, 2008 HARARE, Zimbabwe (AP) — Zimbabwe's state Herald newspaper quotes official statistics saying annual inflation in Zimbabwe has hit 231 million percent. Independent economists say the southern African nation's hyperinflation is running in the billions of percentage points.

The International Monetary Fund may soon lack the money to bail out an ever growing list of countries crumbling across Eastern Europe, Latin America, Africa, and parts of Asia, raising concerns that it will have to tap taxpayers in Western countries for a capital infusion or resort to the nuclear option of printing its own money. The Fund is already close to committing a quarter of its $200bn (£130bn) reserve chest, with a loans to Iceland ($2bn), Ukraine ($16.5bn), and talks underway with Pakistan ($14.5bn), Hungary ($10bn), as well as Belarus and Serbia. Neil Schering, emerging market strategist at Capital...

Treasury is considering taking stakes in insurance companies, signaling expansion of so-called TARP rescue plan.

NEW YORK (AFP) — US authorities said Friday they had seized troubled regional bank Alpha Bank, the 16th bank failure this year. The Georgia-based Alpha Bank & Trust was officially closed Friday, the Federal Deposit Insurance Corporation, which insures up to 250,000 dollars of individual banking deposits, said in a statement. The FDIC said it would continue to insure Alpha's deposits and that another regional bank, Stearns Bank in Minnesota, will take over the failed bank's two branches. As of September 30, Alpha had total assets of 354.1 million dollars including deposits of 346.2 million. Stearns Bank did not pay...

Merger will create fifth largest U.S. banking deposit franchise PNC to further strengthen capital position The PNC Financial Services Group and National City Corporation today announced that they have signed a definitive agreement for PNC to acquire National City for $2.23 per share, or an aggregate fixed amount of approximately $5.2 billion in PNC stock. Additionally $384 million of cash is payable to certain warrant holders. Total consideration approximates National City's market capitalization as of the close of business on October 23, 2008. National City shareholders will be entitled to 0.0392 share of PNC common stock for each share of...

The financial press and policymakers have made four claims about the nature of the crisis. 1. Bank lending to non-financial corporations and individuals has declined sharply. 2. Interbank lending is essentially nonexistent. 3. Commercial paper issuance by non-financial corporations has declined sharply and rates have risen to unprecedented levels. 4. Banks play a large role in channeling funds from savers to borrowers. Here we examine these claims using data from the Federal Reserve Board. At least based on data up until October 8, 2008, we argue that all four claims are false.

Long before she filed for bankruptcy, Ann Neukomm was "under water" -- she owed more on her mortgage than her house was worth -- a situation more and more Americans are finding themselves in. As the financial crisis hits Main Street America, nearly one in six U.S. homeowners are finding themselves in the same position, threatening the U.S. economy with a new wave of foreclosures and bankruptcies. About 12 million U.S. homeowners owe more than their homes are worth, compared with 6.6 million at the end of last year and slightly more than 3 million at the close of 2006,...

December crude futures on the NYMEX opened $3.26/barrel lower at $68.92/b Wednesday as the US dollar soared and US equity futures show for a lower open. The US Dollar Index on ICE traded at near two-year highs earlier at 85.921. When New York floor trading began, the dollar index was trading at 85.44, showing a 145 point gain. Dow Jones and S&P 500 futures in Chicago were lower, signaling a lower open across US equity markets. "The double whammy of a further strengthening in the dollar and a renewed plunge in global equities is providing primary impetus behind the overnight...

While running for the Republican presidential nomination, Rep. Ron Paul of Texas frequently sounded the alarm regarding the nation’s fiscal health. Years ahead of the current economic crisis, Paul was questioning the nation’s debt level, now an acutely pressing issue amid all the recent stock market volatility. With the Treasury Department and the Federal Reserve rapidly moving toward more government intervention in the marketplace while trying to stabilize the nation’s banks and shore up its financial institutions, Paul has argued for a hands-off approach. He opposed both versions of the financial rescue plan that came before the House — the...

Clive Maund at clivemaund.com says, "Payback time for Wall St and Washington will be when foreign investors fail to turn up at the bond auctions to finance the bailout plan, whose US$800+ billion will have to be created out of thin air. So the bonds will have to be monetized, which will mean an immediate spike in inflation, which will cause the rate of corporate bankruptcies to soar as failing companies take down others in a chain reaction because the losses will be highly leveraged by credit default swaps etc. This is the underlying reason why banks won't lend to...

The Federal Reserve announced Tuesday that it will provide up to $540 billion in financing to bolster the money market mutual fund industry, its latest effort to get credit flowing more freely again. The Fed's new program, called the Money Market Investor Funding Facility, will be used to support a private-sector initiative designed to provide liquidity, or cash, to money market investors. The Fed plans to back purchases of short-term debt including certificates of deposit and commercial paper that expire in three months or less from money market mutual funds. The funds are large buyers of commercial paper and CDs,...