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Kent Exploration sells Flagstaff barite to MMIL
2008-11-18 09:37 ET - News Release
Mr. Graeme O'Neill reports
KENT ENTERS INTO BARITE SALES AGREEMENT
Kent Exploration Inc. has entered into a barite sales agreement with Matovitch Mining Industries (MMIL), whereby MMIL will purchase approximately 20,000 tons per year of 4.1 specific gravity barite from the company's Flagstaff property.
The price to be paid is that published by the United States Geological Survey in its annually updated mineral commodity summary -- currently quoted at $40.00 (U.S.) per ton. The company projects a gross annual revenue of approximately $800,000 (U.S.) from this agreement.
The initial term of the agreement is for 10 years, renewable for an additional 10 years on substantially the same terms. MMIL paid $10,000 (U.S.) upon signing and must pay $30,000 (U.S.) into escrow, of which $10,000 (U.S.) is paid out upon mine plan approval, and the balance paid out on issuance of the mining permit.
MMIL is required to make annual minimum payments against barite purchases as follows: $35,000 (U.S.) on the first anniversary of the agreement, $40,000 (U.S.) on the second anniversary, $45,000 (U.S.) on the third anniversary, and $50,000 (U.S.) on the fourth and subsequent anniversaries.
Stock market outlook gloomy amid more disheartening economic data
38 minutes ago
By The Canadian Press
TORONTO - Overseas stock markets are weak and Wall Street index futures indicate a down open as investors fret over the economy.
In Canada, the Bank of Nova Scotia (TSX:BNS) has warned of a bigger-than-expected $595-million hit to its quarterly earnings caused by financial-market upheaval. The other banks are expected to suffer similarly to Scotiabank, which releases its results Dec. 2.
Bank of Canada governor Mark Carney strongly indicated today that the central bank will cut interest rates further next month in an effort to stimulate the economy. Carney told a luncheon in London that downside risks have grown, while inflation is less of a concern.
The Canadian dollar was at 80.78 cents, down 0.53 cent after losing 0.44 cent Tuesday, as commodity prices kept declining.
Crude oil fell under US$54 a barrel, trading down 72 cents at $53.67 after going as low as $53.30 in overnight electronic trading on the New York Mercantile Exchange.
Copper was down 4.4 cents at US$1.6275 a pound.
In economic news, Statistics Canada's composite leading index - an indicator of future activity - fell 0.4 per cent in October. It was the biggest drop since the early-1990s recession, after a 0.3 per cent drop in September.
New American data showed deepening weakness. Construction of new homes plunged 4.5 per cent last month to the lowest level on government records. The Commerce Department said residential construction fell to an annualized rate of 791,000 units.
U.S. consumer prices, meanwhile, fell by the largest amount in records dating back to 1947, down one per cent last month as gasoline prices receded sharply. Core prices, excluding volatile food and energy costs, were down 0.1 per cent - the first decline in more than a quarter-century.
Financial market will again be fixated on congressional testimony by executives of General Motors Corp., Ford Motor Co. and Chrysler LLC. They are appealing for a multibillion-dollar infusion of taxpayer cash to prevent massive layoffs and stabilize the companies.
Investors are concerned that a collapse of any - or all - of the Detroit-based automakers would ripple through an already sagging economy.
In early earnings news, supermarket operator Metro Inc. (TSX:MRU.A) rang up $72.3 million in summer-quarter profit, up 25.5 per cent from year-ago earnings that were reduced by the integration of A&P stores. Sales were $2.48 billion, up 1.8 per cent from a year ago, or 1.5 per cent on a same-store basis.
Wall Street rebounded Tuesday in another turbulent session, as investors rushed back into the market to test a 2003 low. The Dow Jones industrial average finished up 151 points, with most of the gain coming in the final hour.
Toronto's S&P/TSX composite index, meanwhile, closed up 40 points.
Overseas stock markets were in the red, with a noticeable exception in Shanghai, where the benchmark Chinese index gained 6.1 per cent, peeking back over 2,000 - down from 5,500 early this year.
Tokyo's Nikkei index declined 0.7 per cent and the Hang Seng in Hong Kong was down 0.8 per cent.
Losses were steeper in Europe, with the FTSE 100 down 2.5 per cent early in the afternoon in London. The German DAX shed 3.5 per cent and the Paris CAC-40 lost two per cent.
Copyright © 2008 Canadian Press
Copyright 2008 © Yahoo! Inc. All rights reserved.
November 19, 2008
Detroit Chiefs Plead for Aid
By BILL VLASIC and DAVID M. HERSZENHORN
WASHINGTON — The heads of the Big Three automakers of Detroit pleaded on Tuesday for emergency government aid to stave off potential collapse, but after four hours of testimony, it appeared they had not persuaded enough lawmakers to move quickly on a bailout.
Senate Democratic leaders said they had not been able to muster the support for legislation that would provide $25 billion to the troubled auto industry from the Treasury Department’s $700 billion economic rescue fund.
There is still a possibility that money may be freed up for Detroit from a previously approved loan program to help automakers retool their plants for more fuel-efficient vehicles.
But the industry hardly received a warm reception in Washington, despite its mounting troubles. The frantic bid from Detroit for help was laid bare at a packed hearing of the Senate banking committee, in which two of the three automakers said they might run out of money by the end of the year.
The cause of their misfortunes was not management mistakes, they said, but the weak economy and the inability of consumers to obtain credit to buy cars.
The executives from General Motors, Ford Motor and Chrysler seemed stunned by the general lack of confidence that lawmakers showed in their companies.
“We have little evidence that $25 billion will do anything to promote long-term success,” said Senator Michael B. Enzi, Republican of Wyoming.
The discussions were tense, with the automotive executives on the defensive from the start. At times, it appeared the lawmakers had little familiarity with the deep reorganization steps already taken at the companies. On the other side, the Detroit executives painted a bleak picture of an industry under siege. The chief executives of G.M. and Chrysler said their companies were using up their cash at a rate that could leave them close to insolvency without federal aid.
“Without immediate bridge financing support, Chrysler’s liquidity could fall below the level necessary to sustain operations,” said Robert L. Nardelli, the chairman of Chrysler.
His comments were echoed by G.M.’s chairman, Rick Wagoner, who warned that the rippling impact of the auto industry’s cash woes could put three million American jobs at risk.
He said that a failure by G.M., Ford or Chrysler would rapidly bring the entire domestic industry down. “The societal costs would be catastrophic — three million jobs lost within the first year, U.S. personal income reduced by $150 billion and a government tax loss of more than $156 billion over three years,” Mr. Wagoner said.
Alan R. Mulally, Ford’s chief executive, added, “If any one of the domestic companies should fail, we believe there is a strong chance that the entire industry would face severe disruption.”
Despite the urgent tone of the executives, lawmakers in both parties saw little chance that a bailout could be put together and passed during the current lame-duck session. The Bush administration has steadfastly refused requests by Democratic leaders to tap into the financial rescue program to aid the automakers.
The Treasury secretary, Henry M. Paulson Jr., at a House hearing on Tuesday morning and again at a lunch with Republican senators, implored lawmakers to oppose using any of the $700 billion financial bailout for the auto companies, which he said would set a dangerous precedent.
The White House instead has pushed for the auto companies to get immediate access to $25 billion in previously approved loans to retool production plants to make fuel-efficient vehicles.
For television watchers back home there were dueling news conferences and hearings with carefully sharpened questions and even more carefully rehearsed answers. Behind the scenes, auto executives and their lobbyists scrambled from office to office pressing influential lawmakers to take up their cause.
Outside the banking committee hearing, liberal demonstrators preached anti-corporate sermons. And a small corps of Japanese journalists tracked the fate of the American companies, rivals of Toyota and Nissan.
Senator Carl Levin, Democrat of Michigan and one of the auto industry’s chief allies on Capitol Hill, said he still hoped a deal to provide quick access to the $25 billion in loans could be worked out. Mr. Levin conceded no progress on hammering out the details had been made, but said that efforts were being undertaken.
Mr. Levin said that lawmakers were considering several approaches, including rewriting the provision that mandates that any subsidized loans go toward retooling plants to produce advanced fuel-efficient cars.
The suddenness of the cash crisis at G.M. has caught Washington by surprise.
Senator Richard C. Shelby of Alabama, the ranking Republican on the banking committee, said he was skeptical that the Detroit companies could sufficiently reorganize their operations and improve their competitiveness.
“How is this money going to be used?” he said. “Will it be used to improve their business model and product lines, or is this just life support?”
The hearing underscored how deeply complicated the problems are at the Big Three, which have been losing billions of dollars even as they close factories and cut tens of thousands of jobs.
It also stirred new criticisms of Detroit’s ability to compete in the global marketplace. Several senators called into question the carmakers’ vehicle quality, high labor costs and the capability of their senior management.
Senator Christopher J. Dodd, who is chairman of the banking committee and has been generally supportive of aid to the auto companies, gave little solace to the Detroit executives.
“Their discomfort in coming to the Congress with hat in hand is only exceeded by the fact that they are seeking treatment for wounds that are to a large extent self-inflicted,” he said. “No one can say they didn’t see this coming.”
But the auto executives argued that their turnaround strategies were taking hold just as the economy faltered and available credit dried up for consumers.
The overall United States vehicle market has fallen 14.8 percent through the first 10 months of the year. However, sales in October plummeted 31.9 percent, mostly because of the lack of available credit for potential car buyers.
“There is no great mystery as to why this enormous decline in sales has occurred,” said Ron Gettelfinger, president of the United Automobile Workers union. “Because of the overall credit crunch, most families cannot get credit on reasonable terms to finance the purchase of a vehicle.”
While Democratic lawmakers have vowed to get some type of aid for Detroit this week, the process of producing a coherent and effective package has proved elusive.
After the hearing, Mr. Dodd was greeted in the hallway by reporters asking him if he “had the votes” to fix Detroit. “Votes for what?” he said, indicating that a vote on any legislation was questionable this week.
Detroit’s huge financial problems have caused some legislators to question the haste to rush a bailout through Congress.
“I am prepared to consider economic aid to the automakers, but providing regular order is followed,” said Senator Arlen Specter, Republican of Pennsylvania. “And by that I mean, we have a bill we know the specifics of, to have a chance to study it, to have hearings, to have a floor debate, to have amendments.”
Copyright 2008 The New York Times Company
US economy faces 'catastrophic collapse' without auto bailout: GM
1 hour, 26 minutes ago
WASHINGTON (AFP) - The US economy will face a "catastrophic collapse" if the government does not bail out the automotive industry, the head of General Motors told lawmakers Tuesday.
"This is about much more than just Detroit," GM chairman and chief executive officer Rick Wagoner said as he joined executives from Ford, Chrysler and the United Auto Workers Union to plead for 25 billion dollars in government-backed loans.
"It's about saving the US economy from a catastrophic collapse."
GM has said it will run out of cash as early as January if it does not get help from the government and analysts have said it would likely be liquidated if it was forced into bankruptcy protection.
Wagoner cited a recent study showing that three million jobs and more than 156 billion dollars in government tax revenues would be lost should the domestic auto industry be allowed to fail.
"I do not agree with those who say we are not doing enough to position GM for success," Wagoner said in remarks prepared for delivery.
"What exposes us to failure now is the global financial crisis, which has severely restricted credit availability, and reduced industry sales to the lowest per-capita level since World War II."
Hopes for a speedy bailout packaged have faded, however, amid strong opposition from the Bush administration and leading Republicans.
Both the White House and US Treasury Secretary Henry Paulson voiced opposition to the package Tuesday, saying Congress should instead adapt an existing 25-billion-dollar loan program aimed at helping the auto industry develop more fuel efficient vehicles.
Paulson told lawmakers that the 700 billion dollar US financial bailout program "is not a panacea for all our economic difficulties."
While Paulson said it was important to ensure that "none of the auto companies fail, particularly during this period of time," he said "there are other ways" to accomplish this.
"I believe any solution must be a solution that leads to long-term viability, sustainability viability," Paulson said at a hearing of the House of Representatives Financial Services Committee.
White House press secretary Dana Perino criticized the plan developed by Democrats because it "does not require viability."
"That is going to be a test for us to be able to actually reach a compromise," Perino said, adding the White House would continue to work with Congress and hoped to forge an agreement "this week."
But Democrats countered the long-term competitiveness of the US auto industry would be undermined if the loans intended to help underwrite technological development were used instead to help the Big Three weather the current economic downturn.
On Monday, Democratic Senate leaders in Congress opened a "lame duck" session vowing to fight for a new loan program for the auto industry.
Senate Majority leader Harry Reid hit out at Paulson for refusing to adapt the 700 billion dollar bailout approved in October to aid the auto industry, saying: "All it would take is one stroke of a pen and that problem would be solved.
"We are seeing a potential meltdown in the auto industry , with consequences that could directly impact millions of American workers and cause further devastation to our economy."
Democratic leaders would need at least 10 Republican votes to pass the bailout in the Senate and overcome the minority's obstruction tactics with a 60-seat filibuster-proof majority.
Perino pointed out that any attempt to reopen the Troubled Asset Relief Program, as the bailout is known, would not make it through the Senate, and said the White House was working with Senate Republican minority leader Mitch McConnell on the issue.
A credit crunch has made it impossible for the automakers to borrow money privately and US auto sales, which last month hit a 25-year low, are expected to sink to between 10 and 13 million vehicles next year from recent averages of 15 to 17 million.
Copyright © 2008 Agence France Presse. All rights reserved. The information contained in the AFP News report may not be published, broadcast, rewritten or redistributed without the prior written authority of Agence France Presse.
Copyright 2008 © Yahoo! Inc. All rights reserved.
S.E.C. Accuses Mark Cuban of Insider Trading
November 17, 2008, 11:49 am
The Securities and Exchange Commission said Monday that it had charged Mark Cuban, the billionaire Internet entrepreneur and owner of the Dallas Mavericks basketball team, with insider trading for selling 600,000 shares of an Internet search engine company.
The S.E.C. said Mr. Cuban sold the stock in the company, Mamma.com, based on nonpublic information about an impending stock offering. The commission asserted that Mr. Cuban avoided losses in excess of $750,000 by selling his stock prior to the public announcement of the offering.
The commission filed a civil lawsuit against Mr. Cuban in Federal District Court for the Northern District of Texas, accusing him of violating federal securities laws. It said it was seeking to impose financial penalties and confiscate gains from the trades.
“As we allege in the complaint, Mamma.com entrusted Mr. Cuban with nonpublic information after he promised to keep the information confidential,” Scott W. Friestad, deputy director of the S.E.C.’s enforcement division, said in a statement. “Less than four hours later, Mr. Cuban betrayed that trust by placing an order to sell all of his shares. It is fundamentally unfair for someone to use access to nonpublic information to improperly gain an edge on the market.”
Mr. Cuban’s lawyer, Ralph C. Ferrara of Dewey & LeBoeuf, argued that the S.E.C.’s lawsuit “has no merit and is a product of gross abuse of prosecutorial discretion.”
“Mr. Cuban intends to contest the allegations and to demonstrate that the commission’s claims are infected by the misconduct of the staff of its enforcement division,” Mr. Ferrara said in a statement posted on Mr. Cuban’s blog.
The statement quoted Mr. Cuban as saying: “I am disappointed that the commission chose to bring this case based upon its enforcement staff’s win-at-any-cost ambitions. The staff’s process was result-oriented, facts be damned. The government’s claims are false and they will be proven to be so.”
In an aside, Mr. Cuban said on his blog, “I wish I could say more, but I will have to leave it to this, and let the judicial process do its job.”
In its complaint, the S.E.C. asserted that Mamma.com invited Mr. Cuban to participate in the stock offering in June 2004 after he agreed to keep the information confidential. The S.E.C.’s complaint asserted that Mr. Cuban knew that the offering would be conducted at a discount to the prevailing market price and that it would be dilutive to existing shareholders.
Within hours of receiving this information, the S.E.C. alleged in its complaint, Mr. Cuban called his broker and instructed him to sell his entire position in the company.
When the offering was publicly announced, the commission said, Mamma.com’s stock price opened at $11.89, down $1.215 or 9.3 percent from the prior day’s closing price of $13.105.
Mamma.com is now owned by Copernic, a Montreal-based company that provides search software and online advertising services.
“Insider trading cases are a high priority for the commission,” Linda Chatman Thomsen, director of the commission’s enforcement division, said in the S.E.C. statement. “This case demonstrates yet again that the commission will aggressively pursue illegal insider trading whenever it occurs.”
A lawyer familiar with securities law and insider trading cases said the commission must think it has a strong case against Mr. Cuban. “It does take a fair amount of time to develop these cases,” said Phil Stern, the co-chairman of white-collar criminal, regulatory and internal investigative services at the law firm of Neal Gerber Eisenberg. “They felt they had the case. If anything, they would be more cautious with a high-profile person.”
Another lawyer who previously worked at the S.E.C. said the commission’s action on Monday was “the beginning of a long process.”
“There is going to have to be discovery, depositions, lots of conferences with the court, pretrial hearings,” said John Carney, a partner at the law firm of Baker Hostetler and a former senior counsel at the S.E.C. and a former chief of the securities fraud unit of the United States attorney’s office in New Jersey. “A trial in a case like this could drag out for years.”
Earlier this year, Mr. Cuban made a bid to buy the Chicago Cubs, reportedly offering $1.3 billion. It was not immediately clear how the S.E.C.’s charges would affect his chances of being approved by Major League Baseball if his bid were to succeed.
But Mr. Stern of Neal Gerber Eisenberg said the charges would hurt Mr. Cuban’s chances to buy the Cubs.
Mr. Cuban, whose properties include the HDNet cable television network, is already a controversial basketball team owner. He is known for sitting conspicuously behind his own bench in a Mavericks T-shirt and arguing against the referees.
Off the court and on his own blog, Mr. Cuban has been a frequent critic of the National Basketball Association and its commissioner, David Stern, particularly on the issue of officiating, where he once claimed the chief of referees could not run a Dairy Queen. Mr. Cuban then ran a Dairy Queen for a day; even in retribution, he was seeking attention.
Asked about the S.E.C.’s allegations against Mr. Cuban, Mike Bass, an N.B.A. spokesman said, “We don’t comment on matters such as this.”
Mr. Cuban was the first N.B.A. owner to write a blog, posting his opinions almost daily, from topics as diverse as appeals to fans, criticism of the opposing team (particularly the Mavericks’ rival San Antonio Spurs), and treatises on business and politics. A recent post discusses hedge funds.
Although he has been both insightful and contentious within league ownership circles, in eight years since being approved owner of the N.B.A.’s Dallas Mavericks, Mr. Cuban did transform the franchise from a laughingstock to an N.B.A. championship contender. The Mavericks made the finals in 2006, only to collapse and lose the final four games to the Miami Heat.
During those 2006 playoffs, Mr. Cuban was fined $450,000, including $250,000 for several acts of misconduct after the penultimate loss, including yelling at a referee, staring down Mr. Stern and for uttering profanities to reporters in two separate post-game tirades.
In his eight years of ownership, Mr. Cuban has amassed nearly $1.7 million in fines. He has also matched each fine with a donation to charity.
Mr. Cuban has outfitted his team’s spiffy locker rooms in the American Airlines Center with the latest technology (televisions, computers) to attract free agents to come to Dallas. Mr. Cuban often worked out in his team’s weight room before games, talking to reporters with sweat dripping down his body as he climbed a Stairmaster and challenged reporters’ views.
The image seemed a parallel to his own life as a suburban Pittsburgh-born self-made billionaire.
– Jack Lynch and Liz Robbins
HOD still rocking hard ... unbeal!
Covalon dragging the dregs lately. Hammered by markets and totally disillusioned investors seeing much promise but no revenues in sight.
Allen-Vanguard estimates fiscal 2008 revenues
2008-11-13 09:21 ET - News Release
Mr. David Luxton reports
ALLEN-VANGUARD CORPORATION PROVIDES GENERAL UPDATE TO SHAREHOLDERS
Allen-Vanguard Corp. has provided a general update, including its revenue for the fourth quarter of fiscal 2008, an update to the business and financial drivers and opportunities for fiscal 2009 which commenced Oct. 1, 2008, as well as further commentary on the progress of its financial discussions.
Recent performance
The company recorded a pronounced upturn in the finish to its fiscal year ended Sept. 30, 2008, after a very disappointing third quarter. Revenue for the fourth quarter grew by approximately 50 per cent over the third quarter to approximately $45-million, which resulted in estimated revenue for fiscal 2008 in the range of $300-million to $310-million, with all figures subject to final audit. Allen-Vanguard noted that its year-end financial report will show the previously announced restructuring charge for severance and other costs of downsizing its global work force and rationalizing manufacturing facilities, and will also show a large writedown of goodwill and other intangible assets.
The company also reported a very strong start to its new fiscal year which began Oct. 1, 2008, with a sharp increase in its services business in particular, resulting in order backlog as of Oct. 31 of approximately $120-million. The pace of orders six weeks into the new fiscal year represented an annualized revenue rate of $325-million, which is in line with the company's expectations for fiscal 2009.
Business and financial drivers for fiscal 2009
The company has just completed an exacting analysis and forecast for fiscal 2009, against a macroenvironment where improvised explosive devices (IEDs) are projected to remain a persistent global threat, per worldwide military doctrine and per United States Homeland Security doctrine. Allen-Vanguard's suite of products and services is core to the worldwide counter-IED mission.
The revenue expectations for fiscal 2009 represent an increase of approximately 5 per cent over fiscal 2008, led by a plus-50-per-cent increase in service revenues. More than 60 per cent of forecast 2009 revenue is estimated to come from the combined systems and services, and the personal protection systems business segments. Systems and services comprise counter-IED training programs as the company enlarges its incumbency in key, long-term counter-IED training programs for U.S. and NATO special forces, as well as additional revenue streams from its proprietary global data base of IED incidents. Personal protection systems comprise established products such as bomb suits, bomb tools and robots, and new proprietary products including microclimate systems, blast protection seats and personal armour. Following the disappointing performance of sales of electronic countermeasures (ECM) equipment in fiscal 2008 due to order delays, the fiscal 2009 revenue expectations for the electronic systems business unit have been limited to high-visibility contracts already in backlog and high-probability opportunities already well advanced in the sales process. The electronic systems business is concentrated in two major U.S. military programs and thus carries the most exposure to any change in spending priorities, in contrast to the systems and services segment and in particular the personal protection systems segment with its highly diversified product and customer base.
The company noted that revenue by quarter is expected to be more consistent compared with fiscal 2008, when 75 per cent of revenues were recorded in the first half of the year. Quarterly revenue is expected to expand as the year progresses. Predictability of revenue is high due to the program nature of the service revenue component, as well as the strong backlog of product revenue.
David Luxton, president and chief executive officer of Allen-Vanguard, said: "After disappointing our stakeholders in the second half of last year, we have been particularly rigorous in our forecasts for fiscal 2009, ensuring that all of our product line revenue forecasts are supported by order backlog, pending orders or through pipelines of advanced sales opportunities. The result is a forecast that is driven by our own sales and technical efforts, and is less susceptible to external factors and program delays. In addition, we continue to increase market reach through expanded partnerships, alliances and teaming agreements with prime contractors and system integrators. We have recently signed a teaming agreement with a global electronics and communications firm for an ECM opportunity with an expected potential value to Allen-Vanguard of more than $100-million over two years. We are also in active discussions with other global players to take several of our product lines into more markets and programs. At this juncture, we see limited downside risk, attributable mainly to timing of ECM orders as we and others in our industry await clarification of defence spending priorities following the U.S. presidential election. As against that, we see upside potential from our new products, in particular microclimate systems, vehicle blast seats and personal counter-IED armour, as well as opportunities to improve our product margins."
The company anticipates that its overall gross margin will be approximately 40 per cent, which will be an average of the high margins on proprietary personal protection products where the company has global market shares in excess of 50 per cent and the lower margins on services and systems. General and administrative expenses have been reduced to an estimated $10-million per quarter, or $40-million on an annualized basis, following the restructuring announced Sept. 25, 2008, as reported in Stockwatch, which included a 15-per-cent reduction in head count as well as consolidation of manufacturing facilities. Research and development expense is forecast at $14-million on a net basis, slightly below the level of fiscal 2008 due to financial prudence, but with continued emphasis on defending the company's technology leadership position, as well as new product development.
With these financial metrics, the company anticipates strong levels of operating cash flow with free cash flow available for debt reduction and a steady reduction in the ratio of debt/cash flow throughout the year.
Update on financial discussions
After an initial rapid paydown of the debt incurred in the acquisition of Med-Eng Systems in September, 2007, the company has been unable to make quarterly debt repayments since Sept. 30, 2008, due largely to significant order delays by the U.S. DoD for ECM equipment.
As at Aug. 31, 2008, the company had debt outstanding of $188-million on its $200-million term loan facility. The company has obtained accommodations from its lending syndicate to Nov. 28, 2008, which defers compliance with certain financial covenants, including the deferral of the $10-million quarterly principal repayment which was due Sept. 30, 2008. The accommodation permits the parties to continue a constructive dialogue regarding revisions to the existing credit terms. The company is currently meeting its operating cash requirements with cash flow generated from operations.
Allen-Vanguard is also in discussions with potential investors to provide adequate working capital and to explore recapitalization alternatives. The company and its board of directors, advised by its investment bankers, continue to explore potential investments and strategic transactions, some of which entail new capital and financial deleveraging.
"We recognize that all our stakeholders are anxious to know the outcome of these deliberations as soon as possible, especially given the severely deteriorated condition of financial and credit markets," concluded Mr. Luxton. "In the meantime, we are continuing our practice of updating shareholders on highlights of our progress and our business plan."
We seek Safe Harbor.
G.M.’s Troubles Stir Question of Bankruptcy vs. a Bailout
By MICHELINE MAYNARD
DETROIT — Momentum is building in Washington for a rescue package for the auto industry to head off a possible bankruptcy filing by General Motors, which is rapidly running low on cash.
But not everyone agrees that a Chapter 11 filing by G.M. would be the disaster that many fear. Some experts note that while bankruptcy would be painful, it may be preferable to a government bailout that may only delay, at considerable cost, the wrenching but necessary steps G.M. needs to take to become a stronger, leaner company.
Although G.M.’s labor contracts would be at risk of termination in a bankruptcy, setting up a potential confrontation with its unions, the company says its pension obligations are largely financed for its 479,000 retirees and their spouses.
Shareholders have already lost much of the equity that would disappear in a bankruptcy case. Shares of G.M. rose 16 cents Wednesday, to $3.08, but they have fallen 90.5 percent over the last 12 months, amid sharply lower auto sales and fears about G.M.’s future.
And as companies in industries like airlines, steel and retailing have shown, bankruptcy can offer a fresh start with a more competitive cost structure to preserve a future for the workers who remain.
“Just let market forces play out,” said Matthew J. Slaughter, associate dean at the Tuck School of Business at Dartmouth. “And if G.M. or one of the other companies files for bankruptcy, support the workers and the communities that would affected by a bankruptcy filing.”
William Ackman, a prominent activist investor who runs Pershing Square Capital, said Tuesday that G.M. should consider bankruptcy. “The way to solve that problem is not to lend more money to G.M.,” he said in an interview with Charlie Rose on PBS.
Instead, G.M. should submit a prepackaged bankruptcy, laying out steps it plans to enact once in Chapter 11 protection, said Mr. Ackman, who is not a major holder of G.M. shares.
“I’d rather the government’s money be used to train people for other jobs,” Mr. Ackman said. “The bankruptcy word scares people. It’s simply a system.”
Not surprisingly, Rick Wagoner, G.M.’s chief executive, disagrees. He told investors last week that “the consequences of bankruptcy would be dire and extend far beyond” the company. G.M. will “take every action we possibly can to avoid it,” he added.
The company also may be forced to take drastic actions as a condition of receiving any federal bailout package. It may include stiff requirements that G.M. and other automakers restructure and meet financial goals before they can get access to federal financing. Lawmakers may also demand a change in management.
Such demands “may have the same end as a restructuring,” but avoid the taint of an actual bankruptcy filing, said Susan R. Helper, a professor of regional economic development at Case Western Reserve University.
Even though a bankruptcy might help create a stronger company in the long run, consumers could easily see it as a sign that the cars they bought might not retain their value, and seek other options when shopping for a new car. (By contrast, travelers tend to have fewer concerns about flying on airlines operating in bankruptcy because their commitment ends with the flight.)
A car is “a major investment for a lot of families and the assurance that it will perform for a set period of time is part of the bargain,” said Christie L. Nordhielm, an associate professor of marketing at the University of Michigan.
To help ease consumers’ fears, G.M. could put money in escrow to reimburse its 6,468 dealers for any repairs to address problems covered by warranties. Airlines have taken such steps in the past to guarantee the value of tickets for future flights.
A study of 6,000 consumers last summer by CNW Marketing found that 80 percent of them said they would switch companies if G.M. or Ford filed for bankruptcy protection in the United States, suggesting that only G.M. loyalists would stand by the automaker.
A bankruptcy filing by a single Detroit car company could cost the economy $175 billion in the first year of the legal case in lost employee income and tax revenue, the Center for Automotive Research estimated this week. Given the complexity, a G.M. bankruptcy case could last three years or more.
A bankruptcy at G.M., with $111 billion in assets, would rank as one of the biggest bankruptcies ever, but would still be dwarfed by the case filed by Lehman Brothers last spring.
There are parallels between the Lehman bankruptcy and G.M.’s situation. In each case, the government was faced with deciding whether it was worth favoring one entity over its competitors as it worried about the impact on the broader economy of a potential collapse.
Certainly workers in other industries who have lost their jobs may feel the government should extend more help to them, too.
“Why should the government treat G.M., Ford and Chrysler workers any differently?” said Professor Slaughter.
But the United Automobile Workers union, which has joined the automakers to push for a bailout, might find grounds for a strike if a bankrupt G.M. asked a court to throw out its labor contracts.
A bankruptcy also could jeopardize the fate of a health care fund created in 2007 that was supposed to shift a $100 billion burden off the companies’ backs. The U.A.W. recently agreed to let G.M. delay payments to the fund.
Professor Helper, of Case Western Reserve, said the social cost to communities in Michigan, Ohio and other states where its 55 plants and other operations are located could be devastating, if G.M. were to liquidate or significantly cut its work force.
“Even if they go bankrupt in a year, it is better than going bankrupt now,” given the state of the national economy, she said. “From a social point of view, even if G.M. is not providing a return on investment, it is still providing a lot of good jobs.”
Mary M. Chapman contributed reporting.
Copyright 2008 The New York Times Company
November 12, 2008
Democrats Seek Help for Carmakers
By DAVID M. HERSZENHORN and CARL HULSE
WASHINGTON — Democratic Congressional leaders said Tuesday that they were ready to push emergency legislation to aid the imperiled auto industry when lawmakers return to Washington next week, setting the stage for one last showdown with President Bush.
“Next week, during the lame-duck session of Congress, we are determined to pass legislation that will save the jobs of millions of workers whose livelihoods are on the line,” the majority leader, Harry Reid of Nevada, said in a statement.
His call for the session, the first since the election, came shortly after the House speaker, Nancy Pelosi, said Congress and the administration “must take immediate action” to stave off a possible collapse of the American auto industry.
Ms. Pelosi stopped short of saying Congress would adopt legislation to provide emergency financial aid to the automakers, giving the Treasury Department the option of using money from the $700 billion bailout program instead.
But with the White House insisting that the bailout money be reserved for financial institutions, that option seemed unlikely, leading a senior Democratic official to say Democrats would try to force Mr. Bush’s hand.
Congressional aides said that Democrats, should they move ahead with emergency legislation, would have to decide whether to put forward a stand-alone measure for the auto industry or include the aid in a wider economic stimulus measure. Such a package as the latter is likely to include extended unemployment benefits, aid to strapped states and cities, new money for health care and food stamps and possibly money for public works — all programs Mr. Bush has resisted.
Mr. Reid and Ms. Pelosi have urged the Bush administration to help the major automakers, especially General Motors, which is fast depleting its cash reserves and seems to be hurtling toward bankruptcy. G.M. shares, pummeled for weeks, fell an additional 13 percent on Tuesday to $2.92, its lowest point since 1943. G.M. on Monday warned shareholders that it might not be able to continue as a “going concern.”
At a meeting on Monday at the White House, President-elect Barack Obama also urged Mr. Bush to help the automobile companies, and Congressional aides said Democratic leaders were coordinating their activities with his transition team.
“In order to prevent the failure of one or more of the major American automobile manufacturers,” Ms. Pelosi said in her statement, “which would have a devastating impact on our economy, particularly on the men and women who work in that industry, Congress and the Bush administration must take immediate action.”
She added, “I am confident Congress can consider emergency assistance legislation next week during a lame-duck session, and I hope the Bush administration would support it.”
A senior Democratic official, who did not want to be identified talking publicly about party strategy, said Ms. Pelosi had decided to challenge Mr. Bush to work with the Democrats or veto aid to the teetering auto companies — and take the blame if one of them fails.
The White House has resisted calls by Congress to use the $700 billion to help the automakers, saying that money is better spent easing the credit crunch at the heart of the economic crisis.
Tony Fratto, the deputy White House press secretary, said it was not clear what the Democrats were proposing to do. But Mr. Fratto said Congress might better focus its efforts by easing restrictions on $25 billion in plant-retooling loans for the automobile industry that were approved in September.
The automakers have called for at least $25 billion more in assistance, and industry experts say G.M., Ford and Chrysler need quick access to unrestricted cash to help meet payroll and other basic obligations.
Mr. Bush, at his meeting with Mr. Obama on Monday, reiterated his longstanding desire to a reach a free-trade agreement with Colombia, which Mr. Obama and other Democrats have opposed. Some officials suggested Mr. Bush would back aid for the automakers in exchange for Democratic support on the free-trade deal, a notion that the White House dismissed.
A standalone bill would have the best chance of winning passage in Congress, where Republicans for the moment still retain a powerful minority in the Senate, and the best chance of winning Mr. Bush’s signature.
But many Democrats, and many leading economists, have said there is a need for a broader stimulus, and Democrats have been working on a package that would include an increase of unemployment benefits, new infrastructure spending, financial assistance for states struggling with increased Medicaid costs and increased food stamps.
Whichever path they choose, Democrats could be headed for a confrontation with Mr. Bush and were setting the stage for a dramatic lame-duck session, including a potential reunion on Capitol Hill of Mr. Obama, Vice President-elect Joseph R. Biden Jr. and the defeated Republican nominee, Senator John McCain of Arizona.
Mr. Obama does not intend to play a leading role in the session. Aides said he was focused on the economic packages he would offer as president, as well as working behind the scenes with Congressional Democratic leaders. But aides have not definitively ruled out the prospect of Mr. Obama casting his vote if it was needed. His Senate replacement will not be named by then.
The Senate had long planned to come back into session next week to deal with a public lands bill, and both the Senate and the House had planned to begin organizing for the next Congress.
But it was not certain that the House would convene for a formal post-election session, in which dozens of retiring and defeated lawmakers will be called back to work. House Democrats have said they are not inclined to spend time considering a stimulus package if it was only going to be vetoed by Mr. Bush.
With the auto companies reeling and Mr. Bush sending no signal that he would act, Ms. Pelosi said she had asked Representative Barney Frank, Democrat of Massachusetts and chairman of the Financial Services Committee, to begin drafting legislation directing that part of the $700 billion bailout be used to help the automakers.
“Emergency assistance to the automobile industry would be conditioned on executive compensation restrictions, a prohibition on golden parachutes, rigorous independent oversight and other taxpayer protections to ensure that any companies that benefit from this assistance and not the taxpayers bear the full burden of repaying any costs that are incurred,” Ms. Pelosi said in her statement.
Ms. Pelosi’s position drew quick support from Representative John D. Dingell, Democrat of Michigan and a top ally of the auto industry, who said he was working with other Michigan lawmakers on a measure to help the industry “re-emerge as a global, competitive leader in fuel efficiency and in new, path-breaking, energy-efficient technologies that protect our environment.”
General Motors, and to a lesser extent, Ford, were also mobilizing their car dealers and suppliers across the country to exert pressure on the White House and Congressional Republicans to support federal relief, according to industry sources.
They noted that Kentucky, the home state of Senator Mitch McConnell, the Republican leader, has auto manufacturing facilities that could make him sympathetic to moving quickly on aid.
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Copyright 2008 The New York Times Company
Breaking News Alert
The New York Times
Wednesday, November 12, 2008 -- 11:22 AM ET
-----
Paulson Shifts Bailout Focus to Borrowers and Non-Banks
Treasury Secretary Henry M. Paulson Jr. said that the $700
billion financial bailout program would not be used to buy
troubled mortgage-backed assets, as originally intended.
Instead, capital would be provided directly to nonbank
companies as well as banks and financial institutions, and
that more would be done to prevent home foreclosures.
Meanwhile NT and GM are turning into basket cases prime for bankruptcy ...
CBS.v still onradar in case junior spec money ever comes back!
PXC at .005 shows a scared market and a pending consolidation (10:1) to be agreed upon at next AGM.
ITF or Freegold Ventures is another perfect example of a company that had it all to succeed and yet has come down to .16, very close to 52 week low.
GGN at all time low .. this company had tons of money and properties and so many bought in over a dollar .. and then overestimated resources and the financial crisis has brought it down to its knees.
NT continues to be a basket case!!
Enablence Technologies wins major bid from ZTE
2008-11-03 12:31 ET - News Release
Mr. Arvind Chhatbar reports
ENABLENCE SELECTED BY ZTE FOR MAJORITY OF ITS ROADM REQUIREMENTS
Enablence Technologies Inc. has won a major bid from China's ZTE Corp., one of the first and now largest telecommunications enterprises in China. Under this arrangement, Enablence will be supplying its industry-leading Planar Lightwave circuit-based (PLC), reconfigurable, optical, add-drop multiplexers (ROADM) and its PLC-based Arrayed Waveguide Gratings (AWG) products.
Enablence's iROADTM provides a flexible, integrated solution for multichannel ROADM, with power monitoring and automatic channel balancing at low-cost, small-size and low-power dissipation. It allows carriers to switch traffic and dynamically reconfigure networks to match the changing bandwidth needs of different customers. Enablence's ROADM makes this traffic switch automatically and remotely, thus reducing operating expenses for carriers. ZTE has chosen Enablence iROADTM solutions due to its high performance. This product will allow telecommunication service providers to quickly increase services to their customers and will therefore result in significant revenue generation.
The Arrayed Waveguide Gratings (AWG) is commonly used in optical networks to combine a large number of wavelengths into a single optical fibre. Enablence's AWG come in colourless and polarization maintaining options, and can combine as many as 80 wavelengths into a single fibre.
"Enablence has been a leading supplier for Arrayed Waveguide Gratings for the European and North American markets for many years. This win from a major Chinese equipment manufacturer is very significant for us, as it is a further indication of our strong customer focus and competitive position in the global marketplace," said Arvind Chhatbar, chief executive officer of Enablence.
American Express to cut 7,000 jobs in tough economic times
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Thu Oct 30, 11:37 AM
1
What's this
By The Associated Press
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NEW YORK - In a stark acknowledgment of the tough times ahead in the credit card industry, American Express Co. (NYSE:AMX) said Thursday that it plans to cut 7,000 jobs, or about 10 per cent of its worldwide work force, in an effort to slash costs by US$1.8 billion in 2009.
The New York-based credit card issuer said it is also suspending management level salary increases next year and instituting a hiring freeze.
The job cuts will be across various business units, but will primarily focus on management positions, the company said.
Additionally, American Express said it plans to scale back investments in technology and marketing and business development, and streamline costs associated with some rewards programs. The company also expects to cut expenses for consulting and other professional services, travel and entertainment and general overhead.
As a result, American Express plans to take a restructuring charge of between $240 million and $290 million in the fourth quarter.
The company has been gearing up for a big restructuring for some time, first announcing in July that it planned to reduce overall costs and staffing levels, and take a related charge during the second half of the year.
"We've been engaged for the past few months in an intensive, companywide review of priorities and staffing levels," said Kenneth Chenault, chairman and chief executive, in a statement.
"The re-engineering program we announced today will help us to manage through one of the most challenging economic environments we've seen in many decades. It will also put us in position to ramp up investment spending as economic conditions improve so that we can take advantage of the substantial opportunities that will be available to us over the medium to long term."
Last week, American Express reported a better-than-expected 24 per cent decline in third-quarter profit. But the report echoed recent results from JPMorgan Chase & Co., Citigroup Inc. and Capital One Financial Corp. showing that the credit card environment is worsening as cardholders have trouble paying off debt and pull back their spending.
Even a company like American Express, which prides itself on catering to a more well-heeled clientele, is not immune.
The company's customers tend to be more affluent than those of other card companies, but they are more heavily concentrated in California and Florida, where the slumping housing market is taking a toll. American Express also has a higher percentage of small-business customers, and small businesses tend to miss payments more than individuals, executives have said.
"Cardmember spending is likely to remain soft," Chenault said in a statement last week. "Loan growth will be restrained, in part because of the steps we are taking to reduce credit risks, and credit indicators are likely to reflect the continued downturn in the economy and throughout the housing sector."
American Express has been able to finance its operations amid the tight credit markets, but the efforts have been tougher and more costly.
Shares rose $1.52, or six per cent, to $26.74 in morning trading. Shares have traded between $20.50 and $61.55 in the past 12 months.
GM, Chrysler request $10 billion in aid: sources
1 hour, 46 minutes ago
By Jui Chakravorty Das and Kevin Krolicki
NEW YORK/DETROIT (Reuters) - General Motors Corp and Cerberus Capital Management have asked the U.S. government for roughly $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 the 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 and a decision could come this week, sources familiar with the still-developing government response said earlier on Monday.
An injection of $3 billion in equity to support a GM acquisition of Chrysler would be roughly equivalent to the current, depressed value of the top U.S. automaker.
It would also give U.S. taxpayers a large stake in the turnaround of a struggling auto industry that employs over 350,000 American workers and is credited with supporting employment for another 4.5 million in related fields.
Analysts see GM, Chrysler and rival Ford Motor Co having been driven to the brink of failure by a combination of management missteps, slowing global growth and problems in credit markets.
In addition to its equity stake, the U.S. government is also being asked to provide support for the GM-Chrysler merger by taking over some $3 billion in pension obligations under the terms of a proposal now before the government for review, the first source said.
The final component of the proposed support package would be a credit line that could include U.S. government purchases of commercial paper issued by GM to relieve short-term pressure on liquidity, the person said.
A combined GM-Chrysler would control roughly a third of the U.S. auto market by sales and would face immediate pressure to cut costs stemming from excess capacity in almost every facet of its business. Those would include a stable of 11 brands, roughly 10,000 dealers and some 97,000 union-represented factory workers, analysts have said.
But one of the conditions of the merger would be that GM-Chrysler would spare as many jobs as possible in order to win broad political support for the government funding needed to complete the deal, people familiar with the merger discussions said.
GM could not be immediately reached for comment. Cerberus and Chrysler had no comment.
The roughly $10 billion to support the GM merger with Chrysler would be in addition to whatever funds would be allocated to the automaker under an already approved $25 billion program to provide low-interest loans to the industry for retooling to make more fuel-efficient cars.
(Additional reporting by David Bailey)
Copyright © 2008 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.
Copyright 2008 © Yahoo! Inc. All rights reserved.
ENA new lows and HOD and HGD still doing great!
kbc on watch
Cons Beacon to begin drilling at San Joaquin project
2008-10-14 09:48 ET - News Release
Mr. Archie Boyce reports
CONSOLIDATED BEACON RESOURCES LTD. PREPARES TO DRILL IN SAN JOAQUIN
Consolidated Beacon Resources Ltd. has confirmed that, after the processing and interpretation of its recently acquired 3-D data, the operator has licensed the first two well locations in the 2008 drilling program north of Bakersfield, Calif. The locations for these two wells are being prepared for drilling as negotiations continue with the drilling contractor. The drilling program will commence immediately upon the availability of a suitable rig.
The company is encouraged with the developments for the San Joaquin project and is exploring opportunities in increasing its interest in the project and other potential projects in the San Joaquin basin. Consolidated Beacon continues to maintain and expand its land position in Southern California.
Consolidated Beacon's corporate headquarters has been moved to Vancouver, B.C., while the operating headquarters remains in Calgary, Alta. The company is also pleased to retain the services of Richard Hawes, PGeol, for the evaluation of potential oil and gas projects.
San Joaquin overview
Since March, 2006, Consolidated Beacon has been engaged in the business of acquiring medium and heavy oil prospects in the San Joaquin basin, California, in the San Joaquin East Side project joint venture, on and around the Bakersfield Arch.
The San Joaquin joint venture has focused its initial efforts on a 10-mile-wide, north-south exploration fairway between the Round Mountain and Mount Poso oil fields to the east, the Kern Front and Poso Creek oil fields to the west, and the Kern River oil field to the south.
Consolidated Beacon's partners in the San Joaquin JV are Daybreak Oil & Gas Inc., California Oil & Gas Corp., Calstar Oil & Gas Ltd., and the technical team that originated the project. A committee has been assembled from the various partners and is responsible for the overall management of the San Joaquin JV.
The San Joaquin basin of south-central California is targeted for oil exploration for several reasons which are:
1. The east slopes of the San Joaquin basin are a very prolific oil-prone area, with approximately 13,000 historic wells;
2. There has been no significant exploration on the eastern flanks of the San Joaquin basin since the 1960s;
3. Older production methods are still employed; newer production techniques should improve rate of production;
4. The basin is very close to major markets, and has infrastructure and services in place -- about 21 miles to three oil refineries, capacity 116,000 barrels of oil per day (bopd);
5. USGS recently (2007) estimated remaining undiscovered resources in the San Joaquin basin:
* 393 million barrels undiscovered oil;
* 1.7 trillion cubic feet undiscovered natural gas;
* 59 million barrels undiscovered natural gas liquids.
Private placement update
Consolidated Beacon Resources, on June 13, 2008, in Stockwatch, announced a non-brokered private placement of up to 20 million units at a price of five cents per unit for total proceeds of up to $1-million which will proceed accordingly. Ten per cent cash will be paid and 10 per cent agent's warrants will be issued in connection with the private placement, subject to the approval by the TSX Venture Exchange.
Up to 20 million units will be issued as non-flow-through units consisting of one common share and one full warrant. One full warrant will entitle the holder to purchase one additional common share of the company at a price of 10 cents per share for the first year and 15 cents per share in the second year.
The proceeds of the private placement will be used for general working capital.
wow ... oil hammered some more!!
Guess gold rebounded today ... till the next short level
poor COV hit new lows again today
Gold getting hammered last two days as well as CDN dollar .... what a coincidence.
lol
HOD and HGD are doing hugely well!!
ENA and COV hitting some new lows ... such promising little puppies collapsing in dirt of alleyway!
Penson buying some CBS.v
Oil and gold shorts looking sweet today
HOD
HGD
COV
Unusual big volume today
486,500
Oil short is done,
gold still a good short over $900,
and some opps out there but tough to pick the right ones with confidence.
Best bets are blue chip that have been needlessly oversold in the panic selling of this week.
Well done! The important thing is to end up on positive side of the ledger.
Yeah just as long as you don't get caught on the wrong side of a trade.
You have to babysit it and flip the contracts if it changes direction real quick.
Sometimes you just get blindsided.
I never paid so much in commissions before in my life, but the money was astounding.
You worked for it though.
Thanks for heads up .... cheers!
you would think so---- keep ure eyes on the dollar -- strange trading pattern of late --
Gold and oil have been very volatile but isn't that to the advantage of commodities traders?
I think you're right OU. When I was trading crude it totally drove me crazy! I was doing futures and the volatility was crazy, just about anything could effect direction. You had to watch it and constantly check the news for storms,fires,wars,bombings... you name it.
I was a 24/7 basket case..lol
I read that and I am convinced oil will go lower yet.
Crude supply report out, more than what they thought. Gas supply up too.
You still have your crude oil shorts OU?
Panic grips world stock markets
Module body
LONDON (AFP) - World stock markets plummeted on Monday, striking four-year lows, as panic-stricken investors doubted whether a Wall Street bailout package would stem the global financial crisis.
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London, Frankfurt and Paris all tumbled more than six percent before pulling back slightly while a 15-percent dive in Moscow forced yet another halt to Russian trading.
"There is all-out panic," said ING senior strategist Adrian van Tiggelen.
"Everyone had hoped that after the acceptance of the package in the US and the bailouts in Europe, things would cam down but in effect, there are still strong fears of the domino effect."
Iceland's stock market suspended trading in all financial shares including three major banks amid reports of a government rescue of the stricken banking sector.
Investors dumped shares after US stock markets had fallen sharply on Friday despite US congressional approval of a 700-billion-dollar bank bailout. Wall Street was due to reopen at 1330 GMT.
In afternoon trade, London was down 5.23 percent, Paris showed a loss of 5.63 percent and Frankfurt shed 5.43 percent.
"We have a seriously weak and fear driven market at our hands," said Tom Hougaard, chief market strategist at City Index. "It is anyone's guess where we will end the day."
On Monday, Tokyo ended down 4.25 percent as Hong Kong shed 5.0 percent, Seoul tumbled 4.3 percent and Sydney lost 3.3 percent. Shanghai dived 5.23 percent and Mumbai plunged 5.78 percent to close at two-year lows.
European stocks plummeted after Germany's fourth biggest bank, Hypo Real Estate, had to be rescued afresh over the weekend -- news that pushed the euro to a 13-month low against the dollar on Monday.
Oil meanwhile tumbled to eight-month lows below 90 dollars a barrel in London and New York as worsening financial turmoil triggered fears about slowing demand for energy.
"The market is not convinced that the US bailout package can protect the economy from the financial crisis," said Toyo Securities strategist Ryuta Otsuka.
Riyadh, the largest stock market in the Arab world, shed almost 10 percent halfway through trading on Monday and shares in other energy-rich Arab states in the Gulf also slumped.
"The Fed's bailout plan may have been passed on Friday but so far there's been no real reaction in credit markets and because of this, the natural assumption is going to be that the measures won't work, even if such a call is rather premature," said CMC Markets dealer Matt Buckland.
Underscoring the worsening conditions in the United States, the world's largest economy, 159,000 US jobs were lost in September, data showed Friday.
"The approval of the financial rescue plan failed to bolster market confidence. Pessimism towards the global economy is running deeper," said Young Wang, an analyst at Yuanta Securities Investment Consulting in Taipei, where stocks ended down 4.1 percent, also at a four-year low.
As the US-centred financial crisis takes a stronger grip in Europe, the German government agreed an emergency rescue package of 50 billion euros (68 billion dollars), for Hypo Real Estate, late Sunday.
It also announced an unlimited guarantee for personal savings deposits.
France's BNP Paribas meanwhile announced Sunday that it was taking control of the operations of ailing financial group Fortis in Belgium and Luxembourg.
The leaders of France, Germany, Italy and Britain vowed over the weekend to protect fragile banks but did not discuss a joint, European financial rescue package.
"Financial stocks are certainly going to be under pressure again with German mortgage lender Hypo Real Estate being the latest to receive state aid but the overall impact is going to cross all sectors with the prospect of slowing demand weighing on all (company) heavyweights," said Buckland.
In an effort to keep credit flowing, global central banks pumped billions of extra dollars into short-term lending markets in what has become a daily effort to keep cash moving in a critical network.
Markets were looking ahead to a meeting Friday of finance chiefs from the Group of Seven rich nations, waiting for any announcements on coordinated action such as liquidity injections or interest rate cuts, dealers said.
A speech Tuesday by US Federal Reserve Chairman Ben Bernanke would also be closely watched for any clues on the possibility of a US interest rate cut.
The Bank of England was expected to cut British borrowing costs by at least a quarter of a percentage point when it meets on Thursday, with many hoping for joint action by the world's central banks.
Bottom prolly not far but I feel we are not quite there. Meanwhile gold looks good.
Morning OU,
Thanks for sharing that info.....looks like it is a virus that will spread.
Toronto stock market closes down more than 800 points after bailout defeated
Kristine Owram, THE CANADIAN PRESS
September 29, 2008
TORONTO - The Toronto stock market fell more than 840 points Monday, one of the biggest one-day drops in its history.
It was a roller-coaster ride all afternoon after the U.S. House of Representatives defeated a US$700-billion bailout plan for ailing financial institutions.
At one point, Canada's main stock index plunge was down as much as 955 points Monday.
Toronto's S&P/TSX index recovered later and ended the day down 840.46 points at 11,285.54, meaning the market lost about $100 billion of its value in one day.
Stock markets in New York also plummeted on the news.
The Dow Jones industrial average lost 748.21 points to 10,394.92, it's biggest point drop on record.
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