View of the Day: Euro faces growing risks

View of the Day: Euro faces growing risks

By Hans Redeker

Published: October 21 2008 15:39 | Last updated: October 21 2008 15:39

The recent sell-off in central and eastern European (CEE) currencies might have significant negative implications for the euro, warns Hans Redeker, chief forex strategist at BNP Paribas.

He points out that credit spreads in countries such as Russia and Turkey have widened in spite of capital injections into the banking industry by Western governments.

“The reason sovereign spreads are rising has its origin in private sector indebtedness and the structure of the liability side of balance sheets,” Mr Redeker explains. “Banks and corporates in emerging markets have not only funded in local currencies, but an increasing share of liabilities are foreign currency-denominated.

“Local currency is now being changed into hard currency at any cost to cover hard currency funding needs. Local currency weakness is the result.”

Meanwhile, the lack of adequate funding will leave CEE economies, including Russia and Turkey, exposed to a significant slowdown.

“Of concern from a European perspective is that this slowdown is taking place in the eurozone’s backyard, suggesting the region’s exporters face tough times. This will weaken the euro from a cyclical perspective.

“The more CEE currencies weaken and CDS spreads widen the more pressure the euro will face. The risks to the euro might be greater than thought and CEE CDS spreads must be on traders’ ‘to watch’ list.”

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Short View: Is it safe to go back in the water?

By John Authers

Published: October 20 2008 20:58 | Last updated: October 20 2008 20:58

Is it really safe to go back in the water? The easing of tension in the money markets in the week since world governments made their most drastic efforts to deal with the credit crisis is now palpable.

Credit default swaps suggest the risk of a default by a series of big banks – the true “Armageddon scenario” – has fallen significantly.

Banks’ own behaviour, as shown by the rates at which they lend to each other, also suggests that the worst is behind us. In the US, banks will now lend to each other overnight at 1.51 per cent, compared with an incredible 5.37 per cent earlier this month. Three-month rates have also receded significantly, but remain far above historical norms.

But there are many caveats. Continuing extreme volatility in equities shows persistent fears of another accident, most likely from a hedge fund rather than a bank. And fears around emerging markets remain acute. South Korea’s Kospi index, even after its government rescued its banking sector, is now trading lower in dollar terms than it did before the 1997 Asia crisis.

The credit market still shows extreme concern over the creditworthiness of anything other than the highest quality companies.

The iTraxx crossover index in Europe, and the CDX high-yield index in the US, which show the cost of insuring against default, are both at or near their highs for the crisis.

And the still tiny yields available on US T-bills (0.06 per cent for four weeks) suggest that money market funds, which have taken in mountains of cash in the past week, are not comfortable lending to anyone other than Uncle Sam.

Ultimately, the crisis will only end when investors, using their own money not borrowed cash, buy credit (or, in other words, lend). People are still unprepared to lend their own money – and that is a brake on stocks and the economy.

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UK ‘entering recession’, says Bank governor

By Chris Giles, Economics Editor

Published: October 21 2008 18:50 | Last updated: October 21 2008 22:42

Mervyn King on Tuesday night gave his gloomiest assessment of Britain’s economic prospects since becoming Bank of England governor in 2003, saying that the country was now “entering a recession”.

He compared the recent capital flight from British banks with a “mild form” of a 1990s-style emerging market crisis, warning about the risk of another sharp decline in sterling and an even deeper recession.

In one of only three big speeches Mr King gives a year, his views are bound to be taken by markets as a clear sign the Bank is gearing up for further significant cuts in UK interest rates.

The Bank’s quarterly forecasting round is already under way and Mr King’s gloom, punctuated only by relief at the fall in oil prices, will reflect the UK central bank’s new thinking about the economy.

Until Tuesday night, Mr King and the Bank had refused to utter the word “recession”, insisting that the term should only be used to signify a deep contraction in output and not two successive quarters in which the economy might shrink a little.

On Tuesday night he had no such qualms, saying a recession was likely because the recent financial crisis had come on top of the rise in oil prices, which had already squeezed incomes.

“If the news on the domestic front were not sufficiently discouraging, the rest of the world economy also appears to be slowing rapidly,” he added.

Mr King’s speech came as the National Institute of Economic and Social Research, one of the leading academic think-tanks in Britain, forecast that it was odds-on that the economy would contract for four successive quarters starting with the third quarter of this year.

The CBI employers’ organisation also released a survey showing industrial orders falling to their lowest level since October 2003 and business confidence plummeting to its lowest level since the industrial shake-out of the early 1980s.

Mr King supported the recapitalisation of banks, which he said should foster “a long, slow haul to restore lending to the real economy, and hence growth of our economy, to more normal conditions”. But he held out little hope for companies that have interest rates tied to bank borrowing costs, as measured by the Libor interbank interest rate.

“The age of innocence – when banks lent to each other unsecured for three months or longer at only a small premium to expected policy rates – will not quickly, if ever, return,” he said.

Mr King’s sombre mood was sealed by a comparison of the decline in capital inflows to British banks this year with emerging economies, such as Mexico, South Korea, Indonesia and Thailand, in the 1990s.

“Unless [the inflows] are replaced by other forms of external finance, the adjustments in the trade deficit and exchange rate will need to be larger and faster than would otherwise have occurred, implying a larger rise in domestic saving and weaker domestic spending in the short run,” he said.

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Russia set for sale of the century in reverse

By Charles Clover and Catherin Belton in Moscow

Published: October 21 2008 22:10 | Last updated: October 21 2008 22:10

The Russian state could wind up owning huge chunks of formerly private companies as a result of the bail-out measures it is implementing. A senior Russian policymaker said on Tuesday, however, that the government had no plans to “nationalise” these forfeited shares, but would seek to sell them as soon as market conditions improved.

As a result of Russia’s financial turmoil, many of the country’s oligarchs are in dire financial straits, and $50bn (€38bn, £30bn) of aid has been made available to finance their external debts – part of a $200bn-plus Kremlin plan for national economic bail-out measures.

Igor Shuvalov, the first deputy prime minister and head of a recently created emergency council set up to manage Russia’s financial crisis, said that VEB, the state-owned development bank, would take shares in companies as collateral for bail-out loans and, if the borrowers defaulted, they would forfeit the collateral.

He said: “We don’t have the goal of collecting as many shares as possible. Our goal is that they [the borrowers] pay their debts. In an extreme situation – and this is not something we need; it is not something we want – then we would receive their collateral. If this happened ... we do not need to sell it right away like a commercial bank. We could wait until the situation was better and the market conditions were better.

“We are not ready to spend internal credit resources in order to nationalise what had once been privatised. We don’t have such a goal. Our goal is only to provide credit, because the companies that receive these credits are going to survive and develop.”

VEB was recently provided with $50bn by the state to finance the external debts of Russian companies which fall due before the end of the year. Mr Shuvalov rejected criticism that the bail-out plan was not transparent, saying anyone who had external debts falling due in the coming year would be eligible. “We will give first to those who need to settle their external debts.”

Russian financial markets are in turmoil despite the massive bail-out measures announced over the past month that total more than $200bn in new liquidity. Interbank lending rates hit 22 per cent this week, though they fell back to 17 per cent on Tuesday.

Elina Ribakova, an economist at Citibank’s Moscow office, said that a share of 387bn roubles ($14.5bn) in uncollateralised deposits given to 120 eligible Russian banks on Monday by the central bank had been exchanged almost immediately into dollars – judging by movements in the exchange rate.

The central bank has banned some currency operations that could be used to bet against the rouble.

Mr Shuvalov said the government had no plans to devalue the rouble or implement exchange controls. He said the state would continue to spend reserves to support the currency.

“We don’t have any plans for this. We consider that a devaluation would be harmful ... We are thinking, ‘These are reserves, let us use them as reserves.’ ”

He said: “The interbank rate was 22 per cent and is coming down. This situation will calm down slowly, but will not calm down immediately, because it has already affected the psychology of people. The interbank [market] has started working normally. The rates are high but coming down. Banks have started crediting sectors again. But we still need two or three weeks for the situation to start improving.”

He added that, despite the crisis in the banking sector, the government was not going to issue blanket credits to banks, but instead continue to work with a few carefully chosen institutions, saying he wanted to see consolidation in the industry. He admitted that the government must “strike a careful balance” so as not to cause a bank panic.

“We do not want to simply bury many bankers. But we do want, at the same time, for the banking sector to consolidate. We don’t want the banking system to simply die. We want to give the chance to those bankers and shareholders who are in a position to cope. If they have extra capital they can use, if they have good management, then they have a chance to make use of this. But if they don’t, then these banks will be acquired and consolidated.”

He said the government had made a priority of three sectors, which it would pay careful attention to – working “with manual control”, meaning the state would encourage banks to lend to these sectors as a priority. “We believed that in terms of administrative order we should concern ourselves with banking, retail and construction. In the conditions of low levels of confidence, banks have stopped giving credits, and they need working capital. And in order that they receive this working capital, it is necessary to create these ‘manual control’ mechanisms in banks, so these banks received assurances that their credits would be returned.”

He said that much of Russia’s economic future, including the economic growth rate, depended on the skill of the government officials who were tending to the crisis.

“If we act unskilfully, then we could have zero growth. If we work effectively, then we will have a positive growth rate,” he said.

Many analysts have noted with irony that the situation is the exact opposite of the privatisation of the 1990s – the so-called “sale of the century”. At that time, the nearly bankrupt Russian state privatised valuable assets by borrowing money from oligarchs, collateralised by state shares, and then defaulted on the loans. Chris Weafer, from Uralsib the Moscow investment bank, said: “It’s a different version of the sale of the century. This time it’s the state that is the oligarch with the money.”

Life and times

1985-1987 Served in the Soviet army 1992 Graduated with degree in law from Moscow State University, worked as an attache at the legal department of the Soviet ministry for foreign affairs 1993-1997 Became a lawyer and worked for legal consulting firm “ALM” 1997 Worked in the Committee on State Properties (GosKomImuschestvo) charged with privatisation 1998 President of the Russian Federal Fund of State Properties 2000 Joined cabinet as head of the governmental apparatus 2003 Became an assistant to President Vladimir Putin 2003 Envoy to G8 and Sherpa 2008 Became first deputy prime minister under when Putin became prime minister. Known for liberal and pro-business views

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Wed, Oct 22, 2008, 06:29 GMT

Dubai uses inner strength to finance expansion
Financial Times

Tuesday, Oct 21, 2008

Dubai will turn to domestic sources to finance its economic expansion as the international credit it has relied upon dries up, according to a top official.

Omar bin Sulaiman, governor of the Dubai International Financial Centre and vice-chairman of the central bank of the United Arab Emirates, insisted that domestic and regional financial liquidity would make up for a fall in lending from western institutions. "There have been three sources of debt - local, regional and international. Now we're missing only the international," he told the Financial Times.

"We need to forget about that source for a while, although it will come back. But we will compensate with liquidity in the country."

Dubai officials have been playing down the impact of the financial crisis on the emirate's economy and its ability to continue its transformation into a global business and trade hub. Mr bin Sulaiman insisted the impact was "mild and manageable".

Analysts say that for domestic banks to take up a large part of the multi-billion dollar financing of UAE projects, the industry will have to go through a wave of consolidation. Banks are stretched, with loan to deposit ratios estimated to reach above 100 per cent.

The withdrawal over this summer of foreign money betting on a UAE revaluation against the dollar is likely to have pushed these ratios even higher, they add.

Analysts, however, say that in the short term, the banks' balance sheets could be bolstered if the government and state investment vehicles were to deposit funds instead of investing them abroad.

Concerns have been raised about Dubai's level of debt (estimated by Moody's, the ratings agency, at close to 100 per cent of gross domestic product) and its ability to refinance some government-backed companies' loans.

Speaking on the sidelines of a DIFC-FT summit in London, Mr bin Sulaiman dismissed the concerns. He stressed that Dubai had to be seen as part of the UAE.

Other Dubai officials say the emirate has a healthy asset base, with many state-owned companies, including Emirates Airlines and Dubai Aluminium, producing strong revenues.

The oil wealth of Abu Dhabi has kept the UAE awash with liquidity, its current account surplus reaching 20 per cent of gross domestic product in last year.

Just over a week ago, as local funding costs were soaring, the federal government guaranteed deposits and interbank lending and promised a Dh70bn ($19.1bn, €14.5bn, £11.3bn) injection into local banks. "The banks were all liquid but they were holding back lending," said Mr bin Sulaiman. "We didn't have to do all that but we wanted to go the extra mile and show our confidence in the economy."

The government was ready to inject more liquidity if needed.

Mr bin Sulaiman sought to counter concerns over Dubai's real estate market. He said supply would not keep up with demand for years, helping to hold prices up. "I'm worried that we're not pumping enough supply into the market. You cannot find a place to start with and supply will not keep up with demand for the next five years."

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October 22, 2008
India Launches Unmanned Orbiter to Moon
By SOMINI SENGUPTA

NEW DELHI — India launched its first unmanned spacecraft to orbit the moon early Wednesday, part of an effort to assert its power in space and claim some of the business opportunities there.

The Indian mission is scheduled to last two years, prepare a three-dimensional atlas of the moon and prospect the lunar surface for natural resources, including uranium, a coveted fuel for nuclear power plants, according to the Indian Space Research Organization.

The spacecraft will not land on the moon, though it is supposed to send a small “impactor” probe to the surface.

The launching of Chandrayaan-1, as the vehicle is called — roughly translated as Moon Craft-1 — comes about a year after China’s first moon mission.

Talk of a space race with China could not be contained, even as Manmohan Singh, the Indian prime minister, was due to visit Beijing later in the week.

“China has gone earlier, but today we are trying to catch them, catch that gap, bridge the gap,” Bhaskar Narayan, a director at the Indian space agency, was quoted by Reuters as having said.

The first Indian lunar voyage is carrying two devices from NASA. One, the Moon Mineralogy Mapper, or M3, will assess mineral composition of the moon from orbit. The other, the Mini-SAR, will look for ice deposits in the moon’s polar regions.

Chandrayaan-1 was launched from a research station in Sriharikota, a barrier island off the coast of the southern state of Andhra Pradesh.

The moon mission, in addition to demonstrating technological capacity, can potentially yield commercial gains for India’s space program. India’s ability to put satellites into orbit has already resulted in lucrative deals; for example, Israel has sent up a satellite by means of an Indian launcher.

“It is proof of India’s technical capability in an advanced area of science,” said Dipankar Banerjee, a retired army general who is the director of the Institute of Peace and Conflict Studies here. “India wants to be counted as one of the emerging players in Asia. Space is, of course, an important part of power projection.”

The mission is not without domestic critics. Bharat Karnad, a strategic affairs analyst who frequently finds fault with the Congress Party-led coalition government, called the mission a “grandiloquent” effort designed to catch up with a far more advanced Chinese space program. “It is kind of a prestige project the government has gotten into,” Mr. Karnad said. “This is misuse of resources that this country can ill afford at this point.”

John Schwartz contributed reporting from New York.

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Investors suffer as US ethanol boom dries up

By Kevin Allison in San Francisco and Stephanie,Kirchgaessner in New York

Published: October 22 2008 03:00 | Last updated: October 22 2008 03:00

Investors, such as Microsoft's Bill Gates, are sitting on billions of dollars in losses after buying into the corn-based ethanol industry that George W. Bush embraced as the answer to US energy woes.

Six of the biggest publicly traded US ethanol producers have lost more than $8.7bn (£5bn) in market value since the peak of the boom in mid-2006 and the beginning of this month, according to an analysis by the Financial Times. The boom followed a 2005 law requiring refiners to mix billions of gallons of the biofuel with petrol.

Investors who bought and held shares in hotly anticipated market listings of Aventine Renewable Energy, VeraSun Energy and other ethanol producers that have gone public since 2005, have seen the value of their holdings plummet as much as 90 per cent from their flotation price, in spite of billions of dollars of government support for the industry.

The losers in the ethanol investment frenzy, which some have compared to the dotcom mania of the late 1990s, include famous names, such as Mr Gates, Microsoft founder. His private investment firm has lost millions on its 2005 investment in a company called Pacific Ethanol. Mr Gates's firm, Cascade Investments, did not return calls seeking comment.

Other private equity firms and hedge funds that piled into the ethanol industry in the boom years of 2005 and 2006 have put in a mixed performance. Those who bought into ethanol and sold out at the earliest stages made substantial sums. Metalmark, the former private equity arm of Morgan Stanley, the US bank, reaped a 10-fold return on its 2003 purchase of Aventine when it went public in 2006.

Meanwhile, Thomas H. Lee Partners, a Boston-based private equity group, was forced to pull its planned float of Hawkeye Renewables, an ethanol producer it bought at the height of the ethanol boom. One person close to Thomas H. Lee defended the group's investment, arguing that Hawkeye was producing strong cash flow in spite of a difficult business environment that has dragged down the share prices of publicly traded rivals.

Both Metalmark and Thomas H. Lee Partners declined to comment.

Investor losses come as taxpayers have paid billions to support the ethanol industry. More than $11.2bn has been spent since 2005 on tax breaks for companies that blend ethanol into petrol. Billions more have been spent on direct state and federal subsidies for US ethanol production.

"We're looking at an industry that's cost $80bn to get to this point," said Bob Starkey, a fuels analyst at Jim Jordan & Associates, a research group in Houston.

However, ethanol has disappointed many who saw it as a wonder product that could reduce the US's dependence on foreign oil while cutting down on pollution. Worse, a growing number of influential critics now say ethanol is helping raise the price of food.

The industry's supporters still defend ethanol. Bob Dinneen, head of the Renewable Fuels Association, the industry's main lobbying group in Washington, said the fuel represented an opportunity for Americans to invest "here at home" rather than continue to "haemorrhage money ... to the Middle East".

"I'd challenge you to find any energy resource today that isn't dependent on government support," Mr Dinneen said. "If domestically produced energy is something that you want to have, then some of these subsidies are going to be necessary."

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Biofuels: From hope to husk

By Kevin Allison and Stephanie Kirchgaessner

Published: October 21 2008 20:18 | Last updated: October 21 2008 20:18

HARVEST CORN...A stalk of corn frames a farm on Route 5 rural Hazel Green, Wis., Friday Oct. 4, 2002.

It was an American dream that has failed to become a reality. For much of the last decade, enthusiasts from President George W. Bush down have touted corn-based ethanol as something approaching a superfuel, a home-grown alternative to foreign oil that would help cut smog and bring hope to struggling farmers.

It has not worked out that way. Instead, the ethanol industry has undergone a great boom and bust in which a Financial Times analysis has found investors as savvy as Bill Gates, Microsoft’s founder, have collectively lost billions of dollars.

Despite the billions more in taxpayers’ dollars that was spent to subsidise it, ethanol now eats up nearly one-quarter of the US corn crop without so far fulfilling the hopes held for its beneficial effect either on the environment or US dependence on foreign energy.

It may have helped keep gasoline prices lower in the world’s wealthiest nation, but a growing band of influential critics say it has also contributed to higher food prices in the world’s poorest countries. So far, the only sure beneficiaries from the ethanol promise have been the investors clever enough to get into the industry early and the corn farmers who have enjoyed a lucrative new market for their grain.

In short, the story of ethanol is a cautionary tale of the unintended and costly consequences that can arise when the interests of politicians and influential industries collide.

Today, ethanol is a $32.5bn (£19.1bn, €24.6bn) a year business in the US. But for nearly three decades it was an obscure cottage industry run by farmers trying to scratch out a living in the corn belt in the country’s Midwest. Americans had been making bourbon, a drinkable form of ethanol, from corn for centuries. But ethanol got its start as a fuel around the time of the 1970s Arab oil embargo, when a handful of early adherents started to argue that it could lower dependence on energy imports as well as help farmers.

Among these pioneers was a gangly, soft-spoken Minnesotan named Jeff Broin. In 1983, Mr Broin and his father set up an ethanol still on their farm, hoping to sell corn-based fuel to the few companies then operating that had begun blending ethanol into gasoline. Three years later, the Broins bought a disused ethanol plant in nearby South Dakota and went into commercial production. The younger Mr Broin, then just 22, could scarcely have imagined that the family company, known today as Poet, would become an ethanol powerhouse.

“We were simply trying to add value to grain,” he says. “If someone had suggested that we would become the largest producer of ethanol in the world, we probably would have laughed at them.”

Farmers such as the Broins had powerful allies in Washington. Chief among them was a coalition of 20 Democratic and Republican “corn state” senators including Tom Daschle, the former Democratic majority leader, and Chuck Grassley, a Republican senator from Iowa. But the ethanol boosters had a powerful adversary in big oil companies, which saw ethanol as a potential rival and argued that government support would be just another farm-state giveaway.

This argument resonated in the national capital during the 1980s and 1990s. President George H.W. Bush, for example, disparagingly referred to ethanol as “Daschle gas”.

But the president’s son thought differently. Mr Grassley remembers taking the younger Mr Bush on a tour of Iowa’s cornfields during his first presidential campaign in 2000. “I was one-on-one with him with a couple of other people in a van and I spent two days talking to him about ethanol,” says Mr Grassley. Mr Bush appeared to be impressed, Mr Grassley recalls. “He said, ‘It’s this simple. We’ve only got so much petroleum and we’ve got to have renewables. It’s got to be ethanol.’”

Graphic: The rise and fall of ethanol

Not long after Mr Bush took office in 2001, the September 11 terrorist attacks gave grim weight to the ethanol lobby’s arguments. “Isn’t it more sensible to spend $140 a barrel for ethanol than it is to ship $140 over to Arabia and let their Wahabis be trained to kill you and me?” asks Mr Grassley.

The economics of ethanol were also shifting as rising oil prices made ethanol and other alternative fuels more attractive. On Wall Street, clever investors began to take notice. In May 2003, Morgan Stanley Capital Partners, the private equity arm of the US investment bank, bought Aventine Renewable Energy, an ethanol producer with plants in Illinois and Indiana, for $75m. It paid itself nearly twice that in dividends only seven months later.

In 2004, lawmakers on Capitol Hill passed a law giving refiners an incentive to blend ethanol with gasoline by letting them claim a 51 cent per gallon tax benefit on each gallon of ethanol they used. By the following year, the politicians were under pressure to go even further. The price of a gallon of petrol had jumped over the $3 mark. Global warming worries were adding weight to the ethanol industry’s claims that the fuel was an important source of renewable energy. Legislators began work on a law for a renewable fuel standard that would require gasoline producers to blend billions of gallons of ethanol into petrol each year.

Step by step: How ethanol production works

Barack Obama, as a freshman Democratic senator from Illinois, a leading corn-producing state, was a big supporter. “If a terrorist hijacked a plane in Kuwait and crashed it into an oil complex in Saudi Arabia, it could take enough oil off the market and cause more economic damage in the United States than if a dirty nuclear weapon exploded in downtown Manhattan,” he said in a Senate speech. “Instead of continuing to link our energy policy to foreign fields of oil, it should be linked to farm fields of corn.”

Not everyone agreed. New York’s Senator Chuck Schumer called the proposal a “boondoggle” and said: “There is no sound public policy reason for mandating the use of ethanol – other than the political might of the ethanol lobby.” Big users of corn, such as meat processor Tyson Foods, worried it would lead to higher corn prices.

But ethanol supporters found an important, if unexpected, ally: their old rivals in the US oil industry. That was largely due to a fuel additive known as methyl tert-butyl ether (MTBE), which helped petrol burn more fully and thus lower smog emissions. Oil refiners had been using the additive for years, especially since clean air requirements were enacted in the 1990s.

By the early 2000s, however, MTBE had become a liability after scientists discovered that it lingered in ground water and polluted aquifers. California and other states banned it, leaving the oil industry searching for a substitute that would allow it to comply with environmental regulations and avoid billions of dollars in MTBE-related liabilities. Ethanol fitted the bill. “We saw ethanol as a viable product – it was a product that we knew,” says Al Mannato, fuels issues manager at the American Petroleum Institute, the oil industry’s leading lobby group.

The support of the API “significantly changed the political calculation on Capitol Hill”, says Bob Dinneen, president of the Renewable Fuels Association, the ethanol industry grouping.

This was a turning point. That summer, Congress passed, and Mr Bush signed, the Energy Policy Act of 2005, which required refiners to blend 7.5bn gallons of biofuels into gasoline by 2012. Congress and the president created a multi-billion dollar market for corn-based ethanol virtually overnight. “Wall Street loved it,” says Kevin Book, an analyst at Friedman, Billings, Ramsey & Co, an investment bank. “Suddenly, wingtips were covered in corn dust in every state.”

Speculators poured into the industry. In November 2005, an investment company owned by Microsoft’s Mr Gates struck a deal to pay $84m for a 27 per cent stake in Pacific Ethanol, a California group whose shares had begun trading on the Nasdaq stock market that year but had yet to produce a single drop of fuel.

Not long afterwards, two New York hedge funds – Greenlight Capital, headed by David Einhorn, and Third Point, managed by Daniel Loeb – invested nearly $75m in BioFuel Energy, a Colorado ethanol producer. Thomas Edelman, a Wall Street banker and oil and gas executive, chipped in $8.75m and was appointed chairman.

Ethanol futures prices shot up almost fourfold in the 12 months after the energy bill was signed. Meanwhile, the price of corn required to make a gallon of ethanol continued to languish thanks to surplus stores of the grain. The result was a bonanza for ethanol producers. Ethanol companies whose plants were up and running in time to catch this wave made fat profits for themselves and their investors.

In 1999, there were 50 ethanol plants in the US. By January 2007, there were 110, with 76 more under construction. Most early ethanol plants probably paid for themselves within one or two years, according to Ray Goldberg, a professor of agribusiness at Harvard Business School.

Ethanol’s potential as an oil alternative had also begun to take hold in the popular imagination. Advertisements appeared on billboards alongside highways in Missouri showed a Missouri farmer standing next to a cornfield. Opposite him was a picture of the late King Fahd, the former ruler of Saudi Arabia, dressed in traditional Arab robes. Between the two men, in large block letters, was a question: “Who would you rather buy your gas from?”

The growing cost of ethanol production to US taxpayers went largely unnoticed, amid a hype that was reminiscent of the dotcom boom of a few years earlier. As several big ethanol producers announced plans to go public, ordinary investors, largely shut out from ethanol’s early years, jumped at the chance to buy into the industry.

In May 2006, Thomas H. Lee Partners, a Boston private equity group, bought an 80 per cent stake in Hawkeye Renewables in a deal that valued the company at $1bn. THL almost immediately announced plans for an initial public offering. Morgan Stanley Capital Partners, which had been spun out of its parent bank and renamed Metalmark, reaped a tenfold return on its 2003 investment in Aventine Renewable Energy when Aventine became one of several biofuel producers to float on the New York Stock Exchange in June. The biggest star was VeraSun of South Dakota, whose shares immediately jumped 34 per cent on their debut.

But the excitement proved to be short-lived. Investors had ignored some glaring warning signs. Few recognised it at the time, but the previous year’s boom had also set the stage for a shift in the economics of the industry that would prove disastrous for those who came late to the game. In the same month as VeraSun’s IPO, ethanol futures prices fell sharply, reversing the historical correlation between the price of ethanol and the price of a gallon of gasoline. By September, ethanol that had sold for $4 a gallon in June was trading at $1.75, according to DTN, a commodities research group.

The problem was one of oversupply. Dozens of ethanol plants had come online trying to capitalise on the boom, creating a glut that pushed down prices. Corn prices, meanwhile, were rising sharply, driven by increased demand for the crop for use in ethanol production and the rising cost of oil. In the space of just three months, ethanol had moved from boom to bust.

Some of the world’s best-known investors were burnt. When Mr Gates’ investment fund started disposing of its shares in Pacific Ethanol this April, it sold them at a steep loss. Deals such as the one Thomas H. Lee did with Iowa’s Hawkeye Renewables in 2006, which valued Hawkeye’s two ethanol plants at $1bn, began to look less wise. Some analysts say the plants could have been built for closer to $400m. When Colorado’s BioFuel Energy finally went public in June 2007, it was forced to cut its offer price twice in one week. It eventually raised $101m after expenses in a combined public offering and private placement.

Even Mr Dinneen, the face of the ethanol industry in Washington, admits that, in hindsight, ethanol investors were suffering from “overblown exuberance”. “There was a period of growth in the industry, and the economics were uncharacteristically favourable,” he says. “People invested thinking every year was going to be like 2006, when history would tell you that was an anomaly. Clearly there was a lot of Wall Street money coming in – and I think it was with unrealistic expectations.”

If ethanol were any other industry, it might be on its last legs today. But the dream of turning cornfields into car fuel refuses to die.


ETHANOL INVESTORS: EARNINGS STREAM BECOMES A TRICKLE

LOSERS
Bill Gates:

Bill Gates, Chairman of the Bill & Melin...Bill Gates, Chairman of the Bill & Melinda Gates Foundation,speaks during a news conference on the Global Campaign for Health at the United Nations September 25, 2008 in New York. AFP PHOTO/DON EMMERT (Photo credit should read

Best known of the investors to lose money in the ethanol frenzy. Cascade Investments, the Microsoft founder’s private investment company, paid $84m (£49m, €64m) for a 27 per cent stake in Pacific Ethanol in November 2005. The California company had a profitable business marketing ethanol made by other producers but had yet to produce a drop of the fuel itself.

By the time its first plant came online in October 2006, plunging ethanol prices and the rising cost of corn had squeezed the industry. When Cascade began divesting its stake in April this year, Pacific shares sold for less than $4 – compared with $9 when it announced plans to invest and a $42 boom-time high. As of this summer, Mr Gates had lost at least $37.9m on the investment.

Thomas H. Lee Partners:

When the Boston private equity group took its 80 per cent stake in Hawkeye Renewables in May 2006 – a deal that valued the company at $1bn – a fundamental shift in the economics of ethanol was already under way. THL was forced to pull its planned flotation of Hawkeye in September that year and the company has yet to go public.


WINNERS
Early investors:

Don Endres, VeraSun CEO

Those who got in to ethanol before the spike in prices in 2005-06 made fat returns. They include Don Endres (right) who in 2001 founded VeraSun Energy, a leading US producer whose hugely successful June 2006 IPO marked the peak of the ethanol boom.

Farmers:

Benefited from the surge in corn and land prices created in the boom. In addition, most ethanol plants are controlled by farmer-owned co-operatives. Those built before the end of 2005 are likely to have made a return. Associated industries such as tractor makers and seeds suppliers have also profited.

------------------------------------
UK plans £3bn loan for Iceland

By David Ibison in Reykjavik

Published: October 21 2008 23:20 | Last updated: October 21 2008 23:20

The UK and Iceland are hoping to agree a loan of up to £3bn this week to cover British depositors in Icesave, the online banking unit of Landsbanki, the collapsed Icelandic bank.

The loan from the UK to Iceland will provide a first step towards unfreezing the deposits of approximately 300,000 UK customers who have been unable to withdraw money after Landsbanki collapsed this month.

Any agreement will also ease tensions significantly between the UK and Iceland after the collapse of its banking system triggered the most damaging diplomatic spat since the cod wars of the 1970s.

Relations deteriorated after the British government used anti-terror legislation to freeze the UK assets of Landsbanki, amid fears that Iceland’s government might renege on its commitment to compensate UK depositors.

A delegation from the UK Treasury and the Bank of England arrive in Reykjavik, the Icelandic capital, this week to try and “wrap up” the terms of the loan, according to officials.

The precise size of the loan remains unknown, but it is expected to be up to £3bn ($5bn, €3.8bn), which would represent about 30 per cent of Iceland’s gross domestic product.

A Treasury spokesperson said: “Following conversations between the chancellor and Icelandic prime minister, officials from the Treasury and Bank of England are going to Iceland to work on finalising an agreement that aims to compensate UK depositors and ensure fair treatment for creditors.”

The proposed loan will mean that the Icelandic government will be able to meet its share of compensation payments, with the remainder covered by the Financial Services Compensation Scheme, the UK compensation scheme.

The Icelandic government is responsible for paying the first €20,887 of any compensation claim, while the UK government covers the difference up to £50,000. In this case, the UK government has also agreed to pay any additional claims over the £50,000 limit.

UK taxpayers could face a bill of at least £2.4bn to compensate British holders of accounts at Icesave, it has been estimated.

Any agreement with the Icelandic government will not cover corporate and government account holders in Icesave, leaving hundreds of local councils and some charities facing losses.

News of moves to resolve the row between the UK and Iceland came as financial and currency markets continue to wait for an official announcement of a planned $6bn loan from the International Monetary Fund and a number of central banks.

Geir Haarde, prime minister, told reporters in Reykjavik he was hopeful a deal can be reached soon. “We’ll finalise this within the very near future,” he said.

After a cabinet meeting on Tuesday Bjorgvin Sigurdsson, commerce minister, was quoted as saying that an agreement should be concluded by the end of Wednesday.

------------------------------
Berlin calls for Swiss to be on tax blacklist

By Ben Hall in Paris and Bertrand Benoit in Berlin

Published: October 21 2008 19:45 | Last updated: October 21 2008 19:45

Switzerland should be placed on an international blacklist of tax havens, the German government said on Tuesday as it joined a dozen other countries to turn up the heat on territories that profit from tax evasion.

“Switzerland offers conditions that invite the German taxpayer to evade taxes. Therefore, in my view, Switzerland belongs on such a list,” Peer Steinbrück, German finance minister said at a conference in Paris.

Eric Woerth, the French budget minister who organised the conference, raised the prospect of retaliatory measures next year against territories that refused to exchange tax information with authorities in other countries, in line with a code drawn up by the Organisation for Economic Co-operation and Development.

Mr Woerth suggested restrictions on mergers and acquisitions, reductions in dividend payments or higher capital gains tax on individuals could be applied against companies and people in tax havens.

France and Germany are determined to raise the pressure on countries that refuse to exchange tax records. They believe the financial crisis, with calls for fresh market regulation and a downturn in tax receipts, will inject political impetus into the OECD’s hitherto technical efforts to clampdown on unco-operative tax havens. “Time is running out for countries not complying with OECD standards”, said Stephen Timms, UK treasury minister, who took part in the meeting.

Mr Woerth said the tone of the meeting was “offensive, not at all diplomatic”. Austria, Luxembourg and Switzerland, which all have a tradition of bank secrecy, refused to attend, as did the US. The 17 governments represented at the meeting agreed that the OECD should publish a revised blacklist of tax havens by summer 2009 ahead of a summit of leaders of G8 industrialised nations.

The existing blacklist of “non-co-operative” countries contains only three names: Andorra, Liechtenstein and Monaco. But Paris and Berlin say there are several other countries that have promised to comply with OECD standards but have since dragged their feet.

These include Panama, Gibraltar and Bahrain. The meeting also took aim at Singapore and Hong Kong for not doing enough to share tax information. The OECD will draw up a list of retaliatory measures that could be deployed ag­ainst recalcitrant countries.

The 17 governments called for changes to the European Union’s withholding tax directive, ex­tend­ing it beyond bank interest to other financial products and even capital gains tax.

But Mr Steinbrück said he would not wait for an international accord to take action against tax havens.

The German finance ministry said Berlin would immediately take measures, including enhancing the supervision of domestic banks and insurance groups with subsidiaries in offshore financial centres and extending the prudential duties of these institutions to their offshore subsidiaries.

The ministry said it would amend the German tax legislation so that countries that did not abide by the OECD’s transparency and information exchange principles would no longer benefit from a tax exemption on dividends and would face legal restrictions in business transactions.

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Brussels seeks bar on illegal timber

By Joshua Chaffin in Brussels

Published: October 18 2008 01:52 | Last updated: October 18 2008 01:52

Europe’s timber suppliers will have to seek guarantees that their products have been legally harvested, under measures proposed by the European Commission to curb deforestation and reduce greenhouse gases.

European officials say that about a fifth of European timber imports could result from illegal logging and that global deforestation is responsible for 20 per cent of carbon dioxide emissions.

Stavros Dimas, Europe’s environment commissioner, hailed the new proposals as a way to protect biodiversity as well as 60m people who rely on forests for their livelihood.

“By working to eliminate illegal wood from our market, the EU will help promote sustainable forestry practices in the rest of the world,” Mr Dimas said.

The proposed legislation, which must win approval from the parliament and member states, represents another front in Europe’s ambitious goal to cut greenhouse gas and claim global leadership in fighting climate change.

In spite of complaints about slowing economies and costs from the financial crisis, European leaders this week reiterated their commitment to cut CO2 emissions by 20 per cent by 2020.

Environmentalists praised the European Union for addressing illegal logging. Yet they complained the proposals were insufficient, citing the murkiness of logging rules in many source countries. They also demanded more specifics about timber suppliers’ legal obligations to perform due diligence.

“The [proposal] does not have the teeth needed to seriously clamp down on this trade,” said Anke Schulmeister of WWF.

In a separate policy report, the Commission set out a long-term goal of halting deforestation by 2030 and recommended that Europe consider paying developing countries to protect and maintain their forests.

Those payments, it suggested, could come from the estimated €50bn ($67bn, £39bn) the EU will reap each year from 2013, when companies will pay for carbon allowances as part of the emissions trading scheme.

“Developed countries need to be ready to pay developing countries for the eco-system services that are provided by their forests,” said Mr Dimas.

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Sarkozy to seek Asian economic backing at regional summit

33 mins ago
AFP Karl Malakunas

* Print Story

Leaders from Asia and Europe will gather in Beijing Friday for two days of talks in which French President Nicolas Sarkozy will seek Asian backing for his bid to rebuild the world's financial system.

The global economic woes are set to dominate the Asia Europe Meeting (ASEM), a summit of 43 nations held every two years, with the forum offering the first opportunity for Asian countries to discuss the financial crisis as a group.

Sarkozy, whose country holds the rotating presidency of the European Union, has made it clear he will use the event to press Asian nations for support in a dramatic restructuring of the global financial system .

Sarkozy said on Tuesday his objective for the forum was "to convince the Asian powers to take part in this (financial) rebuilding."

The French president is particularly looking to China and India, who he wants to join a series of global summits beginning in the United States next month that are likely to see his bolder plans meet resistance from Washington.

India has said it will participate in the summits, and China is expected to announce its decision shortly after giving repeated assurances it wants to contribute to helping the world out of its economic mess.

Sarkozy has called for an overhaul of the Bretton Woods system that has governed international finance since the end of World War II, and launch a new system.

US President George W. Bush, meanwhile, has stressed the importance of preserving "the foundations of democratic capitalism -- the commitment to free markets, free enterprise and free trade."

Officials have said climate change, energy and food security will also be on the agenda during the ASEM meeting, which is the biggest international event in China since the Beijing Olympics in August.

ASEM will further offer leaders the chance to discuss the North Korean and Iranian nuclear issues, but officials have made it clear the worst financial crisis since the Great Depression of the 1930s will be the top priority.

Most of Europe's and Asia's leaders except British Prime Minister Gordon Brown will attend, with many of them set to hold a flurry of bilateral meetings and other smaller encounters.

China is also reportedly seeking to organise a meeting with the leaders of the 10 Association of Southeast Asian nations, Japan and South Korea to discuss the financial crisis among themselves.

The forum is unique as it gives the leaders a chance to meet among themselves without aides and other officials.

ASEM was set up in 1996 as a potential counter for Europe to strong US influence in Asia, and has focused on sharing ideas rather than binding agreements.

ASEM nations account for roughly 60 percent of the world's gross domestic product and, in the build-up to this week's forum, European officials have sought to highlight the common concerns between Asia and Europe.

"Asia and Europe share more or less the same problems," said the EU ambassador to China, Serge Abou.

"We are all importers, energy consumers, all exposed to the difficulties of the financial crisis, all looking for a better environment, all concerned with global warming, proliferation of weapons of mass destruction."

While Sarkozy will lobby for Asian support for his financial restructuring ambitions, there are virtually no expectations that the ASEM gathering will produce any concrete commitments on the economy.

But Rodolfo Severino, former ASEAN secretary general, said ASEM's importance should not be underestimated.

"There is value in heads of government sitting down together and hearing directly from one another," he said, adding this was particularly important in regards to the financial crisis.

"It will give Asians an understanding of what it is the Europeans are trying to do in getting the economy going again, and the other way around."

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Kerkorian cuts Ford stake, weighs pulling out

9 hours 44 mins ago
AFP

* Print Story

Billionaire US investor Kirk Kerkorian announced Tuesday that he had sold shares in Ford and was considering divesting his whole stake, deepening the gloom around the loss-making auto group. Skip related content
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In a sharp change of strategy, Kerkorian's holding group Tracinda said it had sold 7.3 million shares in Ford for an average price of 2.43 dollars per share -- representing a huge loss for the 91-year-old investor.

Tracinda said it also "intends to further reduce its holdings of Ford common stock, including the possible sale of all of its remaining 133,500,000 shares" which amount to a 6.09 percent stake.

"Investors are becoming more pessimistic about the Detroit Three's prospects in the environment of a deepening recession and restricted access to credit," wrote an analyst for Economy.com, Sean Maher, referring to the US motor industry giants.

Ford shares closed down 6.87 percent to 2.17 dollars in a broadly negative market. They have shed about 65 percent of their value since the beginning of the year.

Tracinda said it had contacted an investment bank about further divestments of its Ford shares, adding that it would now focus on the gaming, hospitality and oil and gas industries where it sees "unique value."

"Questions regarding Tracinda's investment decisions should be directed to Tracinda," said Ford spokesman Mark Truby, commenting on the news.

"We remain confident in and focused on our plan to transform Ford into a lean global enterprise delivering profitable growth for all."

Kerkorian built a position in Ford in the early part of the year, announcing in June that he would pay 8.50 dollars to buy an additional 20 million shares.

The investor, who made a fortune from running and selling Las Vegas casinos, bought the shares in Ford after referring at the time to "meaningful traction in its turnaround efforts."

He pointed to encouraging first-quarter results from Ford, which has been restructuring since 2006, showing a profit of 100 million dollars in a surprise turnaround after heavy losses.

At the time, Ford managers said they were on track to deliver profitability in 2009 -- an objective that has now been shelved.

Since then, the Detroit giant has struggled to sell its heavy vehicles in its domestic market as consumers struggle with rocketing fuel prices and recent financial turmoil has also hit sales.

For the second quarter, Ford announced its worst loss ever of 8.7 billion dollars due to hefty charges related to write-downs on the value of its assets and losses from auto leasing.

In a recent announcement, Ford said sales in the US fell 34 percent to 116,734 vehicles in September while year-to-date sales were down 17.3 percent at 1.5 million vehicles.

Ford also risks being left out of expected consolidation in the US auto industry if its two domestic rivals, General Motors and Chrysler, clinch a merger deal as several press reports have recently suggested.

Sources familiar with the situation told AFP last week that discussions between GM and Chrysler were underway.

"A merger is still risky for GM and it is far from certain, but Kerkorian and other investors may feel that if a deal is struck, Ford would be left out in the cold," wrote analyst Maher.

Kerkorian, who has a reputation as an investor who turns around troubled companies, has a long but mixed history in the automobile industry, often failing to achieve his ambitions.

He was at one point Chrysler's biggest shareholder and launched his own bid for the auto giant in 1995 before backing a deal to sell the firm to Germany's Daimler-Benz.

Years later, Kerkorian filed suit, saying false statements were made about a "merger of equals" of Chrysler and Daimler, and claimed the German firm had diminished his share value. But his suit failed.

In 2006, Kerkorian boosted his stake in General Motors, the largest US automaker, and won a board seat for one of his associates, but later reduced his holdings after failing to engineer an alliance with Nissan-Renault.

Kerkorian announced another bid for Chrysler in 2007 before the announcement of the sale of the US division to private equity firm Cerberus.

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Lufthansa sole bidder for Austrian Airlines takeover: source

Yesterday, 07:08 pm
AFP

* Print Story

German airline Lufthansa is the only contender to have launched a takeover bid for ailing flag-carrier Austrian Airlines, a source close to the matter told AFP on Tuesday after a bidding deadline passed.

Lufthansa was the only one of the three interested companies to have lodged a firm bid for the airline (AUA), the source said, contradicting an earlier media report.

Air France-KLM and S7 of Russia had also expressed interest but did not present a formal offer, the source said.

Air France-KLM is still interested in further discussions but "the economic and financial context... do not allow us to make a firm bid as demanded by the seller," a spokeswoman for the Franco-Dutch group said.

The deadline for firm offers passed at 1000 GMT on Tuesday after months of media speculation about which airlines might step in to help take over AUA during difficult times for the airline sector.

The state-owned holding company OeIAG is looking for a buyer for its 42-percent stake in AUA, after the Austrian government gave it until the end of the year to find a partner.

A further deadline stands for bidders to present details of their takeover proposals by Friday and the final announcement on which company will take the stake is to be announced on October 27.

"Lufthansa is strategically the best placed, but if Air France-KLM comes on Friday with a significant financial offer, OeIAG won't be able to ignore it," a source close to the matter told AFP.

Paul Wessely, an analyst at Bank Austria, said that "for Lufthansa, the AUA takeover is clearly part of a defensive strategy" against its Franco-Dutch competitor.

Austrian Airlines has nearly 900 million euros (1.3 billion dollars) of debt and has estimated losses this year in the tens of millions of euros.

According to terms of the sale, 25 percent of AUA's capital must remain in Austrian hands so as to safeguard jobs and maintain Vienna as the airline's main hub.

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Diamonds are for later: Belgian gem gala shelved by crisis

Yesterday, 06:49 pm
AFP

* Print Story

The main players in the diamond industry have postponed a gala conference in Antwerp, Belgium, deeming it inappropriate to be flaunting their rocks while the world economy is on the rocks.

"With the turmoil now taking place in the financial markets, we felt that it is essential that we allow the dust to settle first," said Antwerp World Diamond Centre CEO, Freddy J. Hanard.

"We therefore thought it prudent to postpone the conference," originally scheduled for November 17-18 in the northern Belgian city which is the leading trading centre for rough, uncut diamonds.

The fifth edition of the international diamond conference was to include a spectacular dinner attended by the likes of British entrepreneur Richard Branson and the King of Lesotho, Letsie III.

"The sector has other preoccupations at the moment, another official for the Antwerp World Diamond Centre organisers said.

"A show of luxury would be a bad signal to send out while the economic situation is not good, it would be bad for the image," he added.

In recent weeks Fortis and Dexia banks have caused scandals by inviting board members and others to dinner in plush Monaco hotels while their banks are bailed out by the Belgian, Dutch, French and Luxembourg governments.

The consequences of the financial firestorm for the diamond sector remain uncertain.

"On the one hand, if there is a marked fall in global consumer demand, all luxury products are going to experience a slowdown," said Hanard.

"But on the other hand, with the lack of confidence that the public is currently displaying for stocks, bonds and other financial instruments, diamonds and diamond jewellery may be considered a safe haven.

"This is on top of the emotional focus on personal relationships that diamonds have come to symbolise, which become front-of-mind in times of crises," he added.

The Antwerp Diamond Centre, which had invited the bosses of sector giants such as Cartier, Rio Tinto and De Beers, expects to reschedule the gala conference for some time next year.

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私は「わたし」でもＯＫ　文化審議会が了承
2008.10.21 22:38

　「私」は「わたし」とも読んでもいいです－。社会生活でよく使われる漢字の目安である「常用漢字表」（１９４５字）の見直し作業を進めている文化審議会の漢字小委員会は２１日、常用漢字の「私」の訓読みについて、新たに「わたし」という読み方を追加することを了承した。

　現行では「私」の訓は「わたくし」しかなかった。同小委は「わたし」が一般的に使用されていることから、常用漢字への追加を検討。２つの読み方について、入れ替えるか、併記するかを議論してきたが、「わたくし」には「公」に対する「私」という意味があるとして、併記することで決着した。

　常用漢字では計３４字で音訓を追加。主なものでは、「混」の訓読みとして「こむ」を追加。現行では「込む」しかないため、人が多く集まっている場所を「人込み」としか書けなかったが、「人混み」と表記できるようになる。

　今後は「混む」が優先され、「人込み」は「込」の欄からは削除されるが、これまで使用されてきた経緯もあり、「混」の欄で注記される。「要」の訓には「かなめ」を追加する。

　また、常用漢字への追加候補の暫定案（１９１字）についても「拳（こぶし）」や「塞（ふさ）がる」「憚（はばか）る」「餅（ヘイ）」など、７つの漢字で音訓が追加される。

　一方、現行の常用漢字である「疲（つか）らす」は使用頻度が低いことから削除されることになった。同小委では漢字の字体なども検討した上で、来年２月ごろには新常用漢字の試案を作成する。

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都公安委：暴力団抗争で服役組員への金品禁止命令　／東京

　都公安委員会は２０日、いずれも指定暴力団で稲川会の角田吉男会長ら幹部３人と極東会の曹圭化（チョキュファ）会長ら幹部３人に「賞揚等禁止命令」を出した。８月施行の改正暴対法で規定された命令で、都公安委による適用は初めて。

　警視庁組織犯罪対策３課によると、０３年３月、両組織の対立抗争で東京や神奈川の組事務所５カ所が発砲を受け、両組織の５０歳と４３歳の系列組員が銃刀法違反と器物損壊容疑で逮捕された。２人は服役中で、今回の命令により、出所後に幹部らが慰労などのために金品を供与することを禁止する。

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日銀、初のドル無制限供給　501億ドル

　日銀は22日、あらかじめ供給額に制限を設けない初のドル資金供給オペ（公開市場操作）の結果を発表した。供給額は501億6800万ドル（約5兆円）。利率は固定で2.11％。資金供給期間は23日から11月20日までの約1カ月間。

　米連邦準備理事会（ＦＲＢ）との協定により、日銀は当初300億ドルだった供給予定枠を撤廃。差し出す担保の範囲内なら無制限に固定金利でドルを借りられるようにした。「3.0―3.5％程度の市場金利より有利な条件で調達できるため、外国銀行を中心に応募が膨らんだ」（ドル資金ブローカー）とみられている。

　ドル資金市場では各国政策当局の対応により取引金利水準がやや落ち着きをみせ始めている。銀行同士で資金をやり取りする際の指標となるロンドン銀行間取引金利（ＬＩＢＯＲ）ドル3カ月物は21日、3週間ぶりに4％を下回った。(13:11)

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新銀行東京、都の追加出資棄損へ　引き当て不足100億円

　経営難に陥っている新銀行東京（東京・新宿）に東京都が4月に追加出資した400億円の一部が2009年3月期にも棄損する見通しになった。金融庁は 21日、同行に通知した検査結果の中で、100億円規模の不良債権の引き当て不足を指摘したもようだ。石原慎太郎知事は追加出資を棄損させないと表明してきており、知事への批判が一段と高まるのは必至だ。

　新銀行東京の経営悪化は従来のずさんな融資が最大の理由であり、最近の世界的な金融危機とは直接関係がない。(07:00)

--------------------------------
マツダ株引き受け、広島銀にも打診　米フォード

　傘下のマツダの株式売却方針を打ち出している米フォード・モーターが、広島銀行にも取得を要請したことが22日、分かった。取得数や金額は未定だが、小規模にとどまる見通し。株式取得が実現すれば、マツダが本社や主力工場を置く広島県の地元企業も同社の安定株主づくりに協力する展開となる。

　フォードが保有するマツダ株を巡っては、総合商社やデンソー、損害保険大手も取得を検討しており、マツダも一部を自社株買いの形で買い取る方針。同社と取引の多い複数の部品メーカーなどに、引き続き出資を打診しており、11月中にも株式の引受先が決まる見通しだ。(16:00)

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資材在庫が急増　チラシ用塗工紙、最高水準

　産業資材や石油製品の国内在庫が急増している。チラシやカタログに使う塗工紙が過去最高に積み上がったほか、石油・石化製品では前年比1割以上増えた品目が多い。個人消費や住宅着工の低迷に輸出減が重なり、メーカーの減産を上回るペースで需要が減退している。在庫増は商品価格を押し下げると同時に設備投資を冷やし、景気の下振れ圧力となりそうだ。

　景気に敏感とされる塗工紙の在庫は6月以降急増している。9月末のメーカー・流通合計在庫は89万2000トンと過去最高を記録した。前年同月末比では32％多い。(16:00)

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シンガポール不動産会社、日本で1000億円投資

　シンガポールの政府系不動産会社アセンダスは日本で不動産投資と運営事業に進出する。年内にも日本法人を設立、今後2―3年で約1000億円をかけて複数のオフィスビルなどを買収し運営する。日本の不動産市場は金融危機の影響で低迷しているが、「利回りが魅力的な水準に達し、市場参入に良い機会」（チョン・シアックチン社長兼最高経営責任者＝ＣＥＯ）と判断した。

　年内に全額出資子会社「アセンダスジャパン」を設立する。日本の不動産会社3―4社と交渉中で、提携後は共同で投資物件探しやファンド組成を手がける。当初は既存のオフィスビルと物流施設に投資。物件開発から管理運営、ファンド運用を総合的に手掛ける。東京、大阪など大都市への進出が目標。(11: 10)

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フランス風の梅酒、サントリーが仏企業と共同開発

　サントリーはフランスの酒造業、ジュール・ブレマン社と共同で開発した梅酒「ウメシュ　ド　フランス　プルシア」を11月25日に発売する。フランスならではの原料や製法を取り入れ、東洋と西洋の味わいを調和させたとしている。従来の梅酒の顧客層にとらわれない幅広い層を狙う。

　南フランス産の生食用のプラムを、ぶどう果実を原料とした蒸留酒につけ込んだことで従来の梅酒よりもフルーティーな味わいに仕上げた。このほか、ブランデーの貯蔵に使用したたる「リムーザンオーク」に保存することで香ばしさも加えた。

　700ミリリットル入りで、アルコール度数は15％。店頭想定価格は2200円。年内に3000本、2009年は1万8000本の販売を目標とする。(10:37)

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大手百貨店が最低価格下げ　冷え込む消費、刺激狙う

　大手百貨店が商品の最低価格を下げ始めた。Ｊ・フロントリテイリング（大丸・松坂屋）が2万円台のジャケット、高島屋は1万円台のブーツを売り出すなど、これまでの最低価格に比べ2―3割安い商品を相次いで投入。米国金融危機で冷え込む消費マインドを刺激する。高級イメージを売り物にしてきた百貨店が戦略を転換し、割安商品で節約志向に応える。

　Ｊフロントは秋冬商戦で、これまで最低価格だった3万円を下回る約2万6000円のジャケットを売り出したところ、30代前後の女性の1番の売れ筋商品になった。

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鹿島、純利益72％減　09年3月期

　鹿島は21日、2009年3月期の連結純利益が前期比72％減の120億円にとどまる見通しになったと発表した。従来予想の250億円（41％減）から減益幅が拡大する。大型民間建築での追加工事や設計変更、資材高などが重なり大幅に採算が悪化した。子会社の架空循環取引に絡む特別損失を37億円計上することも響く。

　売上高は3％増の1兆9600億円。従来予想を700億円上回り、一転して増収となる。過去に受注した海外の土木工事が想定より進ちょくしたという。(07:00)

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生コン、ロシアで生産　会沢高圧、現地企業と合弁

　コンクリート道内大手の会沢高圧コンクリート（苫小牧市、会沢祥弘社長）は極東ロシアに進出する。ウラジオストクのコンクリートメーカー、ザハール社と合弁会社を設立し、生コンなどの現地生産を始める。ウラジオストクは2012年のアジア太平洋経済協力会議（ＡＰＥＣ）開催を控えて道路などインフラ整備が急ピッチで進んでおり、需要開拓を狙う。

　両社は事業持ち株会社「ＡＺＣインベストメント」を香港に設立。その全額出資子会社としてウラジオストクに「ＡＺコンクリート」を設け、現地で生コン製造や、斜面の土砂崩れ防止などに設ける擁壁（ようへき）の製造や設計・施工に乗り出す。当面の投資額は100万ドルの予定で、両社で折半負担する。

　ウラジオストクに工場も建設し、コンクリ製造プラントは会沢側が日本から輸出する。ＡＰＥＣ開催に向けた道路整備に伴い、擁壁の需要が今後伸びるとみて、09年4月から生産を開始。初年度に擁壁関連だけで約5億円の売上高を見込んでいる。

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不正経理：国交・農水側でも…１２道府県委託めぐり３億円

　１２道府県の不正経理問題で、国土交通省と農林水産省の委託事業費を巡り、両省にも約３億円の不適切な経理処理があったことが会計検査院の調べで分かった。支出の根拠となる資料が不足しているなどの不備が見つかり、検査院は両省に改善を求めた。自治体側への周知徹底が不十分なために、妥当な経理処理ができなかったと判断した。

　一方、両省の補助事業を巡る１２道府県側の不正経理の総額は約５億５０００万円だったことが判明。未消化の予算を業者に預けるなどの自治体の不正経理が原因となっているため、検査院は自治体側に不備を指摘した。【苅田伸宏】

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不正経理：ＪＥＴＲＯも「預け」２６００万円…会計検査院

　独立行政法人「日本貿易振興機構」（ＪＥＴＲＯ、東京都港区）が、実際には物品を購入していないのに購入したかのように装い、代金を支払って業者にプールさせる「預け金」と呼ばれる不正経理を行っていたことが会計検査院の調べで分かった。ＪＥＴＲＯによると、００～０６年度で２６５４万円に達する。同様の不正は１２道府県で明らかになったが、独立行政法人でも横行していた実態が初めて明らかになった。

　ＪＥＴＲＯは途上国の新聞などの資料をマイクロフィルム化し、図書室に保存している。関係者によると、マイクロフィルムの発注を装って業者に資金を移動させ、プールしていた。プール金は、マイクロフィルムの撮影代や、現像液の購入費など費目外に流用していたが、飲食など私的流用はないという。

　ＪＥＴＲＯによると昨年７月、検査院の検査で問題が発覚。内部監査を実施し、今年１０月、図書室の発注担当者を停職１カ月にするなど６人を処分した。担当者は「現像液などを購入するたびに内部で経理処理するのが面倒だった」と話しているという。

　ＪＥＴＲＯは１９５８年設立。日本企業の海外進出支援などの業務を行っている。【苅田伸宏、林哲平】

　▽ＪＥＴＲＯ広報課の話　問題を厳粛に受け止めている。関係者は厳正に処分した。

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中国：メラミン餌でタヌキ４６０匹以上死ぬ－－中国紙報道

　【上海・共同】中国遼寧省瀋陽市の村で過去２カ月間に、毛皮用に飼育されているタヌキ４６０匹以上が有害物質メラミンの入った飼料を食べて死んだ。中国紙、南方都市報が２１日までに伝えた。

　同紙によると、約２０の飼育業者がいる村で８月中旬以降、タヌキが相次いで死んだ。解剖の結果、腎臓結石の症状を呈していたことが判明、飼料を調べたところ、メラミンが検出されたという。

　メラミンによる粉ミルク汚染事件が起きた中国では、メラミンを含んだ飼料が違法に生産されていたことが当局の調査で判明。日本の農林水産省は中国産飼料を輸入する場合、メラミン混入の有無を検査するよう要請する文書を業界団体に出した。

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レセプトのオンライン義務化「撤廃を」　日医など３団体

2008年10月22日19時51分

　１１年度から原則義務化される診療報酬明細書（レセプト）のオンライン化をめぐり、日本医師会・日本歯科医師会・日本薬剤師会の３団体は２２日、地域の小規模な診療所などは機器購入などの設備投資の負担に耐えられないとして、義務化の撤廃を求める共同声明を出した。

　声明では「地域に根ざして医療を担ってきた医療機関等を撤退に追い込み、地域医療崩壊に拍車をかけることは明らか」と訴え、レセプトの請求方法は医療機関などの自主性に委ねるべきだとしている。

　医師会が３～４月に全国約４万２千の病院・診療所から回答を得た実態調査では、義務化された場合、８．６％の医療機関が「廃院するしかない」と回答しているという。

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国の補助、使わにゃ損　１２道府県「はり付け」横行（1/2ページ）

2008年10月22日3時2分

　１２道府県の不正経理問題で、自治体予算から出すべき旅費やアルバイト賃金を国の補助金から出す「はり付け」という手口が横行していたことが会計検査院の調べで分かった。岩手県から公金の保管を依頼されていた業者は「預かった金でビール券を出せと言われた」と証言した。検査院は残りの都府県もすべて調査する方針で、独自に調査を始める自治体も出てきた。

　検査院によると、旅費やアルバイト賃金など、道府県で負担すべき予算を国の補助金で充当する「はり付け」という手口が多くみつかった。例えば、国の補助金が出ている道路建設事業で、完工式に幹部らが出向く旅費は県の予算で支払うべきだが、補助金を使っていたという。

　年度末に事務用品などを業者に大量発注したように装い、業者に公金をプールしておく「預け」が年度内の予算使い切りを動機としているなら、「はり付け」は国庫補助金をできるだけ使おうとする意図が見え隠れする。「道府県の予算を残し、補助金を使い切ろうとしている」（検査院幹部）という。

　ただ、旅費や賃金について「補助金を出す省庁からはっきり基準を示されてこなかった」と１２道府県からは困惑する声も出ている。国の補助金の不正額の約８割が旅費に絡むものだと指摘された北海道は、「これまで通り、セミナーや会議の旅費に国庫補助金を使ってきたが、直接、補助事業と関係ないと指摘された」と話した。

　一方、岩手県から「預け」を依頼されていた業者が２１日、朝日新聞社の取材に対し「（県側から）ビール券や商品券を求められた」などと証言した。

　盛岡市のこの業者は「だいぶ前のことで、どの部署だったかはっきり覚えていない」としながらも、「預けた金からビール券や商品券を出してくれないか、と依頼されたことがあった」と話した。依頼はすべて断っていたという。

　「預け」の依頼は県側からあったといい、本来の納品書の商品と異なる商品を納める場合は、改めて納品書を作成し、県の担当者に渡していたという。「預けに応じられないと言えば、ほかの業者に（納品を）頼むということになりかねない。断れなかった」と話した。

■自治体側「見解の相違」

　不正経理を指摘された１２道府県の受け止めはさまざまだ。「預け」について愛知県が取引業者にプールしていた金を「裏金」と認めた一方、ほかの道府県は「裏金との認識はない」との認識。「はり付け」については「見解の相違」との声も多い。

　「預け」について、岩手県では２０日の県議会決算特別委員会で緊急の集中審査が行われ、「裏金ではないか」という委員の質問に対し、県側が「裏金の定義にもよるが、裏金ではないと考えている」と答えた。

　北海道の担当者は「道内外の会議やセミナーの旅費に国の補助金を使っても何も言われなかったのに、今回、検査院から『認めません』と言われた」と戸惑いを隠さない。検査院と協議を続けているが、あくまで「不適切な事務処理扱い」という認識だ。

　群馬県の茂原璋男副知事は「県が国の補助事業費でまかなえると考えていた支出が、検査院との見解の相違で不適切と判断された」。長野県や京都府も旅費について「見解の相違があった」とした。

　こうした中、１２道府県以外の自治体で自主的に調査を始める動きが出始めた。

　埼玉県の上田清司知事は２１日の会見で、県独自に調査を行うよう関係部署に指示したことを公表。補助金の不正経理の有無について来週にも中間報告を発表するという。

　秋田県の寺田典城知事も２０日の会見で各部局に調査を指示したと公表。０１年度に県や県教委、県警が８億円の裏金をプールしていた問題が発覚した香川県では、真鍋武紀知事が事前通告なしの経理検査など現在の再発防止策が機能しているか確認するよう指示したことを明らかにした。

　民主党の決算・行政監視調査会は２１日、自治体の不正経理問題で検査院と総務省の担当者から事情を聴いた。総務省は朝日新聞の取材に対し「今回の件は新聞報道などで情報を集めている。地方分権の時代でもあり指示はしづらい」と話した。

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ロシア側、出入国カード記入求める　来年度ビザなし交流

2008年10月20日21時29分

　北方四島とのビザなし交流をめぐり、ロシアのノソフ・在ユジノサハリンスク外交代表は２０日、北海道根室市での記者会見で「来年度のビザなし交流からは（日本人が四島を訪れる際に）出入国カードの記入を求めることになるだろう」と述べた。「本来は今年度も適用すべきだったが、特別扱いとしてこれまで通りカードなしでの入国を認めた。国境警備当局からも記入を求められている」と説明した。

　これに対し、河村官房長官は同日の会見で「出入国カードの記入を含め、ロシア側が身分証明書および挿入紙以外の書類の提出を求めることは受け入れるわけにはいかない。ロシア政府からなんら指摘はない」と反論した。

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ベラルーシ、ＩＭＦに２０００億円融資要請

2008年10月22日20時14分

　【ロンドン＝稲田清英】世界的な金融危機が欧州新興国にも打撃を与える中、ベラルーシ政府と中央銀行が国際通貨基金（ＩＭＦ）に対し、国内経済の安定へ２０億ドル（約２千億円）の融資を要請したことが分かった。インタファクス通信が２２日、報じた。

　同通信によると、中央銀行報道官がＩＭＦへの融資要請を認めたうえで、「金融危機が周辺国にも深刻な影響を与える中、経済の安定を確保し成長を維持するため、予防的な措置を取る」と説明したという。一連の金融危機ではすでにウクライナやアイスランドなどもＩＭＦ側と支援協議を進めている。

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うその書類で区立住宅の家賃を減額　元暴力団組長を逮捕
2008.10.22 20:17

　東京都港区の区立住宅の「減額措置制度」を悪用して家賃の一部支払いを逃れたとして、警視庁組織犯罪対策４課は詐欺の疑いで、港区高輪、指定暴力団住吉会系元組長、伊藤龍美容疑者（４４）を逮捕した。

　調べによると、伊藤容疑者は昨年６月中旬と７月中旬、実際は１０００万円を超える年収があるにもかかわらず、６００万円しかないという虚偽の収入証明書と減額申請書を港区役所に提出。昨年１２月～今年１１月の間の家賃を減額させ、計２６万８８００円の不法な利益を得た疑い。

　虚偽の収入証明書は、足立区内の産業廃棄物業者に作成させていたという。

　伊藤容疑者は平成７年に入居、これまでに同様の手口で、計５６０万円の減額措置を受けていたという。入居していた部屋は、広さが６１・５平方メートルで家賃は月１９万３６００円。伊藤容疑者は家族４人で住んでいた。

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外務省が週刊朝日に異例の抗議、訂正求める　
2008.10.22 20:04

　外務省の児玉和夫報道官は２２日の記者会見で、２１日発売の週刊朝日（朝日新聞出版発行）に掲載されたジャーナリスト、上杉隆氏の記事「麻生『外交』敗れたり」は事実に反するとして、水嶋光一報道課長が同社を訪れ抗議し、訂正を申し入れたことを明らかにした。外務省が週刊誌報道に抗議するのはまれだ。

　記事は、斎木昭隆アジア大洋州局長が米国による北朝鮮のテロ支援国家指定解除に関連し、担当記者とのオフレコ懇談会で「いい加減な記事を書くな」と激高したとあるが、児玉氏は「発言内容も激高したという点も、いずれも事実と異なる」と指摘。また、外務省幹部が「中曽根（弘文）外相ほど無能な大臣も珍しい」と述べたとある点についても、「幹部が上杉氏の取材を受けた事実は確認されず、信憑（しんぴよう）性は疑問だ。記事を掲載した週刊朝日の責任は重大だ」と語った。

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財政難で蛍光灯器具をネット売却　奈良・大和郡山市
2008.10.21 20:28
このニュースのトピックス：国会

　財政難の奈良県大和郡山市は、市庁舎内の蛍光灯器具をインターネットオークションで売却することを決めた。市は、買い手を、衆院選挙を控える選挙陣営などと想定。上田清市長も「選挙事務所などで利用してもらえないだろうか」と期待している。

　売却するのは長さ約２・５メートルの蛍光灯の据え付け器具４器。財政難の市は光熱費を削減するため、来年度に市庁舎にある計１５０器の据え付け器を、従来の１１０ワット用から４０ワット用に入れ替える計画で、近く試験的に交換する４器分を売却する。好評なら公売を続けるという。

　通常なら１器で２万円するが、最低制限価格は格安の４器で４０００円に設定している。入札申し込みは今月２８日から１１月２０日、入札日は１２月１０日を予定している。関係者は、入札申し込みまでに衆院選が実施される可能性もあるだけに、「選挙はいつになるのか」と気をもんでいるという。

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Financial Crisis engulfs Eastern Europe
21.10.2008 Source: URL: http://english.pravda.ru/business/finance/106596-Financial_Crisis_Eastern_Europe-0

By Toni Straka

Eastern Europe has a sudden awakening these days. After a decade long shopping spree, mainly focused on cars and home improvements, consumers in the Baltic and Balkan countries are tripping over loan payments and sustaining inflation. Edward Hugh's blog "Global Economy Matters" leads the blogging pack with an unsurpassed depth of information on Hungary's economic situation, as the country is sucked into the global credit crisis.

Attributing the crisis to the usual wrongdoings of politicians, like running up fiscal and current account deficits, Hugh highlights the country's fragile exposure to foreign currency mortgages which rose by some 50% since 2007. As if that were not enough for a country whose trade partners are slipping into recession too, Hungarians have also more than tripled their outstanding Forint-denominated loans since 2006.

Hungary was thrown a €5 billion lifeline by the ECB last Thursday to prevent a currency crisis and is in talks with the IMF about a rescue.

Foreign banks in Hungary stopped or scaled back forex lending earlier last week, as reports Hugh:

Oesterreichische Volksbanken AG's Hungarian unit suspended Swiss Franc and U.S. dollar loans in Hungary on Wednesday. The bank, which has declined to elaborate to the local press on its decision, will continue to lend euros it says. Swiss Francs are however the key currency in the Hungarian context, since around 80% of new mortgage lending has been in CHF. Bayerische Landesbank local subsidiary MKB was the first bank in Hungary this week to announce (on Tuesday) the suspension of new foreign-currency personal loans, saying the volatility of the forint made them too risky for clients. One by one the other banks in the market have all been following suit.

Hugh points to one more interesting nuance in Hungary's crisis. A majority of loans granted in the past year were forex denominated and Hungarian debtors are now in for a revaluation shock.

Austria's debtors face the same problem. Swiss Franc loans were aggressively marketed in the past years and now the hard Swissie will erase all interest rate gains made earlier, resulting in higher payments.

Suddenly The IMF is en vogue Again

Unable to withstand the crisis with their domestic means, the International Monetary Fund is getting a lot of calls from the troubled Eastern European countries. As in so many bear market stories, the crisis was not noted until a day before.

Even as late as yesterday central bank Governor Volodymyr Stelmakh had been saying IMF help wasn't needed. The banking system is "normal and reliable,'' he said in an interview.

Providing a blog for most European regions, Hugh features Claus Vistesen at his Baltic Economy Watch, who reports about economic contraction and a downgrading of sovereign debt in Estonia, Latvia and Lithuania.

The core problem is, again and again, credit-funded consumption:

Head of sovereigns in Europe, Edward Parker from Fitch consequently noted the worse than expected correction in financial markets coupled with the vulnerable macroeconomic environment as the main reasons for the downgrade. More specifically, the mixture of external deficits funded to a large extent by inflows of credit (e.g. some 30% for Lithuania) supplied by foreign banks lies at the root of the decision and incidentally, as it were, also at the root of the macroeconomic vulnerabilities of the Baltic economies.

http://prudentinvestor.blogspot.com/2008/10/financial-crisis-spreads-to-eastern.html

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Chikungunya and other previously unknown diseases may conquer the world
22.10.2008 Source: Pravda.Ru URL: http://english.pravda.ru/science/earth/106601-Chikungunya-0

Developing countries may become the source of previously unknown epidemics, a recent report from Trust of America’s Health said. Over 170,000 Americans die from outbreaks of new or forgotten infections, some of which come to the USA from abroad.

The administration of Google.org, a charitable division of Google, believes that the threat of new infections is highly important nowadays. The organization has already assigned $15 million to epidemiologists. Google’s goal is to find the hotspots, where new infections may emerge, to discover and study new microbes, and to create early prevention systems in developing states so that local authorities could take efforts to subdue the outbreaks before they could take a global scale, the USA Today reports.

Larry Brilliant, the executive director of Google.org, said that the probability of pandemic diseases may rise against the background of the global economic crisis, as many counties would be forced to cut their healthcare spending.

Chikungunya, viral fever, may become the next epidemic to reach the United States. This word translates from Makonde, an African language, as “bends up.” Chikungunya is a mosquito-borne disease. Its symptoms are similar to those of severe flu, although a person infected with chikungunya may suffer from the disease for life.

The infection was spread from East Africa to islands in the Indian Ocean, where 266,000 people fell ill with the disease, and 255 of them died. Afterwards, the virus continued to conquer the Indian subcontinent and infected over 1.5 million people, of whom up to 90,000 died. The virus currently moves across South-East Asia, where it has already adapted to tiger mosquitoes, which inhabit the United States too.

In August, chikungunya emerged in the province of Ravenna, Italy, where local tiger mosquitoes spread the infection from a resident of South India, who had come to Italy to visit his relatives. Over 250 people were infected as a result.

Dangerous and lethal infections can conquer the present-day world speedily. For example, the notorious SARS virus was spread throughout the world in only 1.5 months. Over 8,000 people were infected with the virus, 755 of them died.

One should bear in mind the fact that new infectious diseases appear on a regular basis, although modern medicine considers them a matter of the past. Legionary disease, avian flu, salmonella, AIDS and several new forms of tuberculosis have made countless headlines during the recent years.

Infectious diseases kill about 57 million people a year, which makes 26 percent of the global death rate. AIDS, TB and malaria kill 6 million people altogether. The death rate will be a lot higher in case of pandemia.

Lassa fever, Rift Valley fever, Marburg virus, Ebola virus and Bolivian hemorrhagic fever are highly contagious and deadly diseases, with the theoretical potential to become pandemics. Their ability to spread efficiently enough to cause a pandemic is limited, however, as transmission of these viruses requires close contact with the infected vector. Furthermore, the short time between a vector becoming infectious and the onset of symptoms allows medical professionals to quickly quarantine vectors, and prevent them from carrying the pathogen elsewhere. Genetic mutations could occur, which could elevate their potential for causing widespread harm; thus close observation by contagious disease specialists is merited.

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Russians panic about possible ruble devaluation
21.10.2008 Source: Pravda.Ru URL: http://english.pravda.ru/russia/economics/106598-devaluation-0

Moscow exchange offices had a plethora of clients over the past weekend who wanted to have their rubles exchanged for US dollars. The people were certain that the dollar rate would skyrocket against the background of the current crisis. Many depositors decided to close their accounts in banks and convert their ruble savings to foreign currency. To crown it all, it was rumored that the ruble would loose its value again, like it happened in 1998, and one American dollar would thus cost 40 rubles (the current exchange rate is 26.3 rubles per dollar).

Experts say that this way of saving cash may play a dirty trick on many Russians. It is highly unlikely for the Bank of Russia to send the ruble plummeting, although specialists do not exclude such a possibility.

The dollar rate dropped 20 kopecks during the morning tender on October 20. However, many exchange offices in Moscow displayed their own exchange rate for the dollar, which was higher than the official rate of the Bank of Russia. Currency exchange offices were purchasing the dollar at 26.5 and even 27 rubles, and were selling it at the rate of 28.5 rubles per dollar. The official rate of the US currency dropped to 26.05 rubles the same day.

The Russian government rejected Tuesday an opportunity for the ruble to devaluate. Deputy Finance Minister Sergei Shatalov said that there was no devaluation planned.

The Moskovsky Komsomolets newspaper decided to investigate the rumor of the imminent ruble devaluation, which made so many people panic. As it turned out, the first message on the subject was made by Georgia online news website, which referred to Reuters. Needless to say that no such news story was found on the Reuters website. The above-mentioned Georgian website posted the message with an intention to spread havoc on the Russian Internet.

“The Central Bank of Russia has already wasted $70 billion. Russia’s reserves have their limits. The foreign capital will flow out of Russia that is doomed to collapse,” the message from Georgia online said. The text of the news story shows that it was written with anti-Russian purposes. The article ends with a gloomy forecast: “The ruble rate is expected to collapse in three days, and Russians would see the real numbers in currency exchange offices very soon.”

Several Russian news agencies bought into the hoax, released several similar news stories and referred to Reuters as well.

Thousands of Russians have already realized that they should have trusted their own reason when they rushed to exchange their ruble savings for dollars.

If the Russian ruble loses 60 percent of its value, as the fake news messages said, it would mean a complete disaster for the Russian economy. The majority of Russians would immediately try to close their bank accounts, which would trigger the collapse of the national financial system.

In the meantime, the US dollar continues to grow against world’s major currencies. The euro currently costs 1.35 dollars. According to experts’ estimates, the dollar will be growing for about six months.

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元若ノ鵬の出廷却下、対象記事は入幕前

　週刊現代の八百長疑惑記事をめぐり日本相撲協会と係争中の講談社側が証人申請していた元若ノ鵬（２０＝本名ガグロエフ・ソスラン）の出廷が２１日、東京地裁に「必要がない」と却下された。３日の裁判で、記事の対象となった０６年九州と０７年初場所は、元若ノ鵬の入幕前だったため、裁判長が証人採用の判断を見送っていた。２０日に提出された陳述書も対象場所とは違う事例だったことが却下の理由とみられる。

記事中で八百長の当事者として名前を挙げられた琴欧洲ら４力士への尋問申請の判断は出ていない。

同社代理人の的場徹弁護士は「協会側も反対していないのに、理解できない判断。原告側の４力士については検討中なので、結果を見て考えたい」と話した。

また、元若ノ鵬が日本相撲協会に解雇無効などを求めた裁判の第１回口頭弁論期日が２７日に決定した。