Power failure trips up supercollider September 19, 2008
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Sept. 19, 2008
GENEVA, Switzerland, Sept. 19 (UPI) — A power failure shut down the powerful Large Hadron Collider particle accelerator earlier this week, scientists at the Swiss facility said.A power interruption in the transformer affected the European Center for Particle Physics’ refrigeration plant, meaning protons couldn’t be beamed around the facility, Swissinfo.com reported Friday.
The collider ring must be minus 456.34 degrees F to allow protons to travel at more than 99.99 percent of the speed of light, scientists said.
Officials at the facility said the problem has been corrected and the refrigeration chamber was being cooled. They couldn’t say when the beaming would resume, Swissinfo.com said.
The experiment seeks to recreate conditions one-trillionth of a second after the Big Bang to help scientists understand how the universe formed. The underground machine spans the Swiss-French border.
Greenspan: Other big U.S. finance firms may fail September 19, 2008
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WASHINGTON (Reuters) – Former U.S. Federal Reserve Chairman Alan Greenspan on Sunday said he suspected “we will see other major financial firms fail,” but it did not need to be a problem.
“It depends on how it is handled and how the liquidations take place,” Greenspan said on the ABC program, “This Week.” “And indeed we shouldn’t try to protect every single institution. The ordinary course of financial change has winners and losers.”
Greenspan also said it was a very bad idea to get rid of short selling even though stock in major financial institutions such as Lehman Brothers <LEH.N> and American International Group <AIG.N> have been beaten down in recent days.
In July, the U.S. Securities and Exchange Commission issued a temporary emergency rule to curb illegal short selling in 19 major finance stocks including Lehman and mortgage finance giants Fannie Mae <FNM.N> and Freddie Mac <FRE.N>, which have since been taken over by the government.
The SEC’s emergency order ended in mid-August and the agency is not expected to reinstate the rule for those 19 firms or the rest of the market.
When asked whether the government should help Lehman the same way it helped Bear Stearns, Greenspan said the government is trying to do it in a different manner.
“When Bear Stearns was bailed out, it drew a line under that level of firm, implying that anything that was larger than that firm was capable of getting federal assistance,” he said.
“Now if you generalize that, it is very clear that that is an unsustainable situation in the financial markets and in the markets.”
The Fed and Treasury Secretary Henry Paulson helped orchestrate JP Morgan’s <JPM.N> takeover of Bear Stearns, complete with a $29 billion promise to absorb losses.
Greenspan also said the chances of escaping a recession was “less than 50 percent.”
“I can’t believe we could have a once-in-a-century type of financial crisis without a significant impact on the real economy globally, and I think that indeed is what is in the process of occurring.
(Reporting by Rachelle Younglai with additional reporting by James Vicini: Editing by Maureen Bavdek)
US should let AIG fail?: McCain September 19, 2008
Posted by frewon9 in News.Tags: aig, fail, failure, market, McCain, News
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September 17, 2008
Republican presidential nominee John McCain called for a commission to study the crisis in US financial markets like the one that investigated the September 11 attacks and said the government shouldn’t rescue insurer American International Group Inc
“We need to set up a 9/11 Commission in order to get to the bottom of this and get it fixed and act to clean up this corruption,” McCain said in an interview on CBS’s “Early Show.”
In a series of six satellite interviews from Miami this morning with TV talk shows, McCain previewed the themes he will sound at rallies in Tampa, Florida, and Youngstown, Ohio, today.
The spreading market turmoil is taking center stage in the campaign as AIG, the biggest US insurer by assets, is seeking capital to stay afloat, Lehman Brothers Holdings Inc filed for Chapter 11 bankruptcy protection and Bank of America, the biggest US consumer bank, took over Merrill Lynch & Co.
The Arizona senator said on NBC’s “Today” show that taxpayers should not be “on the hook” for AIG, which may be on the verge of collapse. He praised Treasury Secretary Henry Paulson for denying requests for a bailout, saying Paulson “has been correct” in asserting taxpayers aren’t responsible for business failures.
Harvard economics Professor Martin Feldstein, whose advice has been sought by McCain, is on the board of directors of AIG.
Assessing the Economy: McCain economic adviser Doug Holtz-Eakin said separately that the candidate is sticking to his assertion that parts of the economy are sound. Democratic candidate Barack Obama has derided McCain’s repeated statements that the fundamentals of the economy are strong.
“You shouldn’t run for president by running from everything in sight and trying to scare people,” Holtz-Eakin told reporters in Miami.
AIG fell 61 per cent in New York trading after its credit ratings were cut in the latest tremor to shake the global financial industry. The New York-based insurer is seeking as much as $75 billion in loans.
“There are great efforts being made to try to raise sufficient capital to keep AIG in business,” McCain said in an interview with CNBC. Taxpayers shouldn’t be held responsible for the bad performance of US institutions and “the moral-hazard issue is something that we have to take head-on,” he said.
The idea of moral hazard is that bailouts encourage additional risk taking. It has been applied particularly to the insurance industry where coverage against a loss might increase risky behaviour.
Closer Regulation: The Republican nominee and Obama, an Illinois senator, have been calling for more regulation as the financial crisis spreads.
The government must make a commitment to the American people that “we will fix this and it will never happen again,” McCain, 72, said today in his TV interviews.
Regulatory agencies that were designed in the 1930s should be consolidated to improve transparency and regulation of markets in a “global, instantaneous economy,” he said.
“There is a risk of overregulation and overreacting,” McCain added. “Congress has a tendency to do that, but to say this is just a blip on the radar — this is serious.
This isn’t just going to cost jobs on Wall Street; this is going to cost jobs all over America.”
Why the Government Wouldn’t Let AIG Fail September 19, 2008
Posted by frewon9 in News.Tags: aig, Brothers, fail, failure, Lehman, market
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After establishing a supposed hard line against bailouts over the weekend with Lehman Brothers, the government abruptly abandoned it Tuesday and announced an $85 billion Federal Reserve loan to insurance giant AIG. The explanation: AIG was deemed too huge (its assets top $1 trillion), too global and too interconnected to fail.
That, and the fact that unlike with Lehman — where the possibility of failure was openly discussed for months and to a certain extent planned for — federal officials and market participants don’t seem to have really focused on AIG’s problems until this week. As with all U.S. insurers, the company is regulated not by the Fed but by a state regulator, in this case New York insurance superintendent Eric Dinallo. Plus, it was awfully hard for outsiders — and even insiders — to understand the gravity of the company’s problems. “You can read through every financial statement in the world and have absolutely no clue as to the risks they are taking,” says Leo Tilman, a former Bear Stearns strategist who now runs the advisory firm L.M. Tilman & Co.
The particular risks that brought the company to the brink of bankruptcy seem to lie not with its core insurance businesses but with its derivatives-trading subsidiary AIG Financial Products. AIG FP, as it’s called, merits a mere paragraph in the nine-page description of the company’s businesses in its most recent annual report. But it’s a huge player in the new and mysterious business of credit-default swaps: derivative securities that allow banks, hedge funds and other financial players to insure against loans gone bad.
AIG generally sells credit-default swaps, thereby promising to insure others against defaults. It’s a great business when defaults are low; when they rise it can turn toxic. AIG FP lost more than $10 billion in 2007 and $14.7 billion in the first six months of this year. That, along with losses in other investment portfolios, has cut deeply into the parent company’s capital reserves. The credit-default-swap contracts decree that if AIG’s credit rating drops below a certain level, it has to fork over $13 billion in collateral to the buyers of the swaps. Monday night, because of the losses at AIG FP and in AIG’s investment portfolios, Moody’s and S&P cut the company’s ratings. After that, the consensus was that the company could survive only another day or two.
The New York Fed asked Goldman Sachs and JPMorgan Chase & Co. to try to arrange a $70 billion private loan for AIG, but that didn’t go anywhere. Treasury officials mulled a government conservatorship as with Fannie Mae and Freddie Mac, but it might have required an act of Congress to make that happen. So the Fed devised a deal in which AIG agrees to repay the loan with asset sales and give the government (and thus taxpayers) a 79.9% equity stake in the company.
Confused? You’re not alone. The best case for the bailout seems to be that nobody has the faintest idea what the consequences of AIG’s failure for financial markets would be, but the fear was that it could lead to total chaos. The biggest fears had to do with the credit-default swaps, which AIG appears to have sold in large quantities to practically every financial institution of significance on the planet. RBC Capital Markets analyst Hank Calenti estimated Tuesday that AIG’s failure would cost its swap counterparties $180 billion.
“Its collapse would be as close to an extinction-level event as the financial markets have seen since the Great Depression,” wrote money manager Michael Lewitt in Tuesday morning’s New York Times. There’s also the fact that through its insurance policies AIG touches far more regular Americans (and consumers around the world) than Lehman Brothers did. Plus, AIG’s insurance businesses make so much money that they could conceivably pay off the cost of the bailout within a few years.
Hello world! September 19, 2008
Posted by frewon9 in General notes.add a comment
Welcome to Fail-0-pages Directory Listing on sites that leads to Fail
we just decided its time to move from its former location Synersign Project blog
here we list the addresses of fails along the net you can comment if you wish to add your directory to the listings
