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NEW YORK — This morning, stock market futures trading hit limits as investors bet that the market would take a plunge. Dow Jones industrials futures hit negative 550 points, triggering a "circuit breaker," a mechanism designed to limit panic selling.

If stocks fall enough in regular trading, more circuit breakers could be triggered, resulting in automatic timeouts in trading. The New York Stock Exchange implemented the automatic halts after the stock market crashed in the late 1980s to force traders to take a break from frenzied selling.

The Dow Jones industrial average would have to fall 1,100 points in a day to trigger the first halt. If that point is reached before 1 p.m. CDT, the market would shut down for an hour. If the threshold is breached between 1 p.m. and 1:30 p.m., the halt will last 30 minutes. No trading stops will take place if the plunge occurs after 1:30 p.m.

Based on Thursday’s Dow close of 8,691, the threshhold number to cause the market stop in one day would be 7,591 get a free credit report.

If the index were to fall 2,200 points before 12 p.m., the market would close for two hours. If such a decline took place between 12 p.m. and 1 p.m., there would be a one-hour pause. The market would close for the day if stocks sank to that level after 1 p.m.

In the event of a 3,350-point decline, the market would close for the day, regardless of the time.

The thresholds are computed at the beginning of each quarter to establish a specific point value for the quarter. The 1,100-point drop represented a 10 percent decline at that time; the 2,200 level, a 20 percent drop and the 3,350 level is a 30 percent drop.

The rules would halt trading on the major securities and futures exchanges in a coordinated cross-market halt if the circuit breaker is enacted.

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OPEC ministers anxious to arrest a deep oil price slide and cushion a bruised world economy gathered in Vienna Thursday ahead of emergency talks.

International benchmark U.S. crude has slumped by more than 50 percent from a record high of $147.27 hit in July. On Thursday it was trading below $67.

The plunge prompted the Organization of the Petroleum Exporting Countries to bring forward to Friday an emergency meeting originally set for November 18.

As economic slowdown has destroyed demand for oil and stocks have built, most OPEC ministers have said a supply cut was essential.

But they have differed on how much oil should be removed to limit oversupply and protect their economies, while avoiding more pain for the consumers they rely on cash advance today.

On arriving in Vienna, Saudi Arabian Oil Minister Ali al-Naimi said only that the oil price would be determined by the market. He would not be drawn on the need for any cut.

Earlier Iran’s Oil Minister Gholamhossein Nozari said OPEC needed to cut output by two million barrels per day (bpd).

OPEC sources have said at least a million bpd needed to be taken away, while OPEC President Chakib Khelil said it could require more than one meeting to get the right balance between supply and demand and between producer and consumer needs. 

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Japan and France extended more help to banks, the IMF prepared to intervene in trouble spots around the world and the Fed devised a new plan to inject liquidity into money markets on Tuesday to curb the worldwide financial crisis.

Interbank lending costs came down again, offering tentative signs of renewed confidence in the financial system, after weeks of bailouts and rescue plans appear to have cooled the worst crisis since the 1930s Great Depression.

Governments around the world have promised about $3.3 trillion to guarantee bank deposits and bank-to-bank lending, and in many cases have taken stakes in struggling banks.

“The likelihood of a global catastrophe has in fact declined over the past couple of weeks,” said Glenn Stevens, Australia’s central bank governor faxless payday advances.

The U.S. dollar rallied to a year-and-a-half high against a basket of currencies on Tuesday as investors and companies continued to deleverage.

The stronger dollar, in turn, sent gold down nearly 4 percent and oil prices fell.

Japanese stocks closed 3.3 percent higher and European shares reversed earlier gains to trade lower in the afternoon.

But the Dow moved lower amid concern over U.S. earnings reports for the third quarter. U.S. chemical giant DuPont cut its 2008 earnings and major asset manager BlackRock Inc reported profits that came in below market expectations. 

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Under the circumstances – government bailouts of the leading banks of the U.S. and Europe, and a stock market that posted a record weekly drop of 18 per cent last week, and a 40 per cent plunge since last summer – the biggest failure in modern free-market economics was bound to raise doubts about the future of capitalism as we know it.

There’s little question among European leaders that the contagion of U.S. subprime mortgages that has necessitated European bailouts and outright nationalizations of major banks requires a total rethink of the U.S. style of cowboy capitalism. Wall Street practices have been too widely emulated in Europe in the view of leaders like Britain’s Gordon Brown, France’s Nicolas Sarkozy, Germany’s Angela Merkel and even Russian President Dimitri Medvedev, overseer of rampant crony capitalism, who got their licks in this week.

Italian Prime Minister Silvio Berlusconi, a tycoon with a near-monopoly on commercial broadcasting in Italy, scorned the "capitalism of adventurers" in the U.S. – the anything-goes Wall Street investment bankers who put annual bonuses ahead of integrity. Sarkozy, possibly the most pro-American of prominent Frenchmen since Marquis de Lafayette, asserted last week that "this crisis was not born in Europe. This crisis was born in America. It is now a global crisis.

"A new form of capitalism is needed, based on values which put finance at the service of business and citizens, and not vice versa," Sarkozy told other European Union leaders at a mid-week summit in Brussels. Gordon Brown, the British PM and former treasury minister, proposes "far-reaching reform" that would have global banking come under the control of a "college of supervisors" to watch over the shoulders of bankers to curb their reckless instincts.

The dramatic, $700-billion (U.S.) Washington bailout of banks and brokerages has many in the U.S., too, wondering if such radical government intervention in the private sector presages, as the Washington Post headlined a recent essay, "the end of American capitalism" and "market-knows-best" thinking. One hears everywhere in the U.S. these days that we are witnessing, at the very least, the end of Reagan-era deregulation.

"Many economists are asking whether it remains a free market if the government is so deeply enmeshed in the financial system," says the Post. The question takes on even more force when the massive handouts sought by Detroit’s crippled automakers are taken into account.

Yet all this hand wringing is overdone. When the dust settles after the spectacular flameout in the global financial sector, and stock markets recover from their recession and credit-squeeze fears, capitalism will be practised much as it was before – with absolute minimal government intervention in America, albeit with stricter regulatory supervision; and in Europe with the same heavy dose of statism as before.

For starters, the partial privatization of leading U.S. banks announced by Washington early this week has ample precedent. The FDR-era Reconstruction Finance Corp. rescued distressed banks in the 1930s. Key industries were nationalized during World War II. And Washington played an extensive role in cleaning up the savings and loan mess in the 1980s. In each instance, the nationalized banks and other industries were promptly returned to private-sector ownership once the crisis had passed. And that is the plan this time, too. Washington does not want to be in the banking business.

What will emerge from this financial meltdown is fewer and larger U.S. and European banks, far more tightly regulated – which is more characteristic of routine industry consolidation than, say, a new, permanent regime of state-directed capitalism http://payday-loans-e.com. And as much as the financial system’s breakdown has inevitably impaired the general economy, the rot is almost entirely limited to the financial sector – hardly justifying a root-and-branch reinvention of American capitalism. No one is talking about nationalizing Silicon Valley, for instance, or America’s robust consumer goods, retailing, pharmaceutical or agribusiness sectors.

Indeed, there’s scant talk of significant reform even within financial services. At the very least, one would think, a return to the New Deal-era separation of commercial banking and investment banking would seem to be called for, given that the sector’s fecklessness can be traced to the lifting of that restriction in 1999. But no, when investment banks Bear Stearns Cos. and Merrill Lynch & Co. faced insolvency, Washington opted to forcibly merge them with commercial banks J.P. Morgan Chase & Co. and Bank of America, respectively.

As for European gloating over that continent’s purportedly more prudential banking practices, the argument doesn’t bear scrutiny. In Europe, almost all major banks save France’s BNP Paribas, Spain’s Santander and London-based HSBC drank the Kool-Aid that U.S. housing valuations would rise indefinitely, helping spur the biggest boom and bust in the history of the U.S. housing market.

Otherwise, some of the biggest losers on soured U.S. subprime mortgages and other dodgy assets are to be found in Europe, including Swiss banking giant UBS AG, which has taken a staggering $42 billion (U.S.) in writeoffs in impaired loans, and an over-leveraged Royal Bank of Scotland PLC, in which Britain is taking a 60 per cent equity stake. The casualty list extends to Hypo Real Estate, Germany’s second-largest commercial real estate lender, rescued in a $67-billion (U.S.) government bailout; the once formidable Dutch-Belgian financial conglomerate Fortis, rescued by Holland, Belgium and Luxembourg; and Dexia, a French-Belgian lender to municipalities bailed out by Paris and Brussels. All had loaded up on toxic U.S. securities, taken on excessive debt, and relied on volatile short-term loans, rather than deposits, to fund operations.

"The same mechanisms that led to the crisis in the United States were operating here," Arnoud Boot, a professor of finance and banking at the University of Amsterdam, told the New York Times this week. "It’s totally misplaced for European lenders to put the blame on the Americans." Indeed, the troubled European financial firms were, if anything, less risk-averse than their U.S. counterparts, employing more than twice as much leverage as their U.S. peers.

One of the more influential post-Cold War texts was The End of History, an argument that Western-style capitalism had triumphed over Communist and socialist ideology. But European powers have since stubbornly clung to their statist ways. And the rise of radical Islam has made a hash of the theory the West was no longer constrained by rival ideologies backed by force.

Pronouncing an "end" to any ideology or practice of long-standing is at best premature. Greed and high-level corruption, which ultimately brought down the Soviet Union, are not about to be purged from capitalism, which will take a genuinely new form only after the Seven Deadly Sins are outlawed.

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Schnuck Markets Inc. today announced the purchase of two Metro East grocery stores and the acquisition of the lease on a third store.

The O’Fallon Hart Food & Drug and the Bethalto Park N Shop soon will operate under the Schnucks banner, Schnucks said. The Park N Shop in Godfrey, however, will close.

Schnucks bought the stores from the Homer Group Management Co. Terms of the deal were not disclosed.

All three stores will close at 8 p.m. Oct. 20. The O’Fallon and Bethalto stores will reopen as Schnucks stores at on Oct. 23.
During the two days the stores are closed for inventory, the O’Fallon pharmacy will not be able to accept walk-in customers. However, physicians may continue to call prescriptions in to Hart Pharmacy, and customers may order refills by calling the pharmacy at 618-632-5525. Normal hours of operation will resume on Thursday, Oct bad credit payday advance. 23.

Associates at all three locations will have the opportunity to join the Schnucks organization at comparable wages and benefits, the company said.

"The addition of the O’Fallon and Bethalto stores will significantly expand our ability to provide goods and services to customers on the Illinois side of the river," said Scott Schnuck, chairman and CEO of the St. LouisMaryland Heights-based chain. "Although we have acquired the lease on the Godfrey location, we will not reopen that store. Those associates will be offered positions at other Schnucks locations including the newly remodeled Godfrey Schnucks store just two miles away."

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Qwest Communications International Inc. reported just after midnight Friday that it has reached a tentative contract agreement with negotiators from the main union covering more than 18,000 of its workers.

The Denver-based telecom (NYSE: Q) negotiated Oct. 9 and Oct. 10 with representatives of Communications Workers of America in an attempt to find a contract acceptable to the union membership, which last month rejected a proposed three-year contract.

The latest proposed contract calls for a 3 percent increase in wages each year. Health care premiums for families covered by the PPO will increase to $75 a month from $33.

The contract will have to be ratified by union members spread across Qwest's 14-state local phone service territory. Union employees have been working since Aug. 17 on an extension of a three-year contract reached in 2005.

The CWA covers all but about 200 of Qwest's union workforce in Montana. Those workers are members of the International Brotherhood of Electrical Workers and are covered by the same contract terms as the CWA membership.

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One day after falling to an annual low, shares of Monsanto Co. climbed the most in six months after the Creve Coeur-based agribusiness posted a smaller fourth-quarter loss than Wall Street expected while professing confidence about long-term plans.

Net sales rose by more than a third for the maker of Roundup herbicide and biotech-enhanced seeds for corn and soybeans, Monsanto said Wednesday. Executives said the long-term trend of greater grain demand will allow the company to reach ambitious milestones it has set for the next few years, including doubling its gross profit by 2012.

Across the agriculture industry, companies are dealing with historic volatility caused by uncertainty in the commodities and credit markets, said Hugh Grant, chairman and chief executive. But "in a world of increasing uncertainty, we at Monsanto believe substantial growth is still to come," he said in a conference call.

Monsanto said it expected to earn between $4.20 and $4.40 per share in 2009, an increase of approximately 15 percent to 20 percent from Monsanto’s results for continuing operations in the 2008 fiscal year. Several analysts said the projections were characteristically conservative.

Monsanto posted record net sales and doubled profits in the 2008 fiscal year, juiced by a big increase in sales of Roundup as well as gains in corn seeds and traits. The company’s smaller vegetable seed portfolio also chipped in.

Monsanto said it now expects its gross profit to grow to between $9.5 billion and $9.75 billion in 2012, or about two-and-a-quarter times its 2007 base. That estimate was raised from Monsanto’s prior projections, which called for gross profit to grow to a range between $8 online instant cash advance.6 billion and $9.1 billion.

But the key year may actually by 2010, when Monsanto plans to widely market its new Roundup Ready 2 Yield soybean seeds, said Frank Mitsch, managing director at BB&T Capital Markets. Grant called that product a "game-changer."

That introduction "bodes well for Monsanto’s results," Mitsch said. "We’re very bullish on the stock."

Monsanto tried to assuage fears that farmers’ credit was evaporating, which could cause them to cut back on purchases of herbicide and seed. Chief financial officer Terry Crews said U.S. farmers’ debt-to-asset ratio is "low" — about 10 to 12 percent. Farmers on solid financial footing should be able to get needed funds to carry on operations, he said.

Plus, "seed will be the last place that growers will seek to cut corners in this environment of rising input costs," Morningstar analyst Ben Johnson wrote in a research note.

Monsanto also predicted strong demand for glyphosate-based herbicide, including Roundup. The company’s stock fell rapidly last week when chatter about falling demand and higher production costs for Roundup spread across Wall Street.

The chemical is one of Monsanto’s most important products, and is expected to contribute $2.3 billion to $2.4 billion in gross profit in the 2009 fiscal year. Proceeds from "the house of Roundup" paid for several recent acquisitions, said Grant.

jmcwilliams@post-dispatch.com

314-340-8372

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China’s securities watchdog has urged fund ventures partly owned by foreign financial institutions to disclose the financial state of their partners, reflecting increasing government concern about the spreading impact of the global financial crisis.

Joint venture fund companies need to report this month how their overseas shareholders have been affected by the escalating crisis, and how that might affect the ventures’ operations, according to an e-mailed request by the China Securities Regulatory Commission (CSRC).

“The concern is that some troubled foreign shareholders such as AIG might eventually pull out of their ventures, thus, affecting management stability,” said Liang Jing, analyst at Shenyin & Wanguo Securities Co. “The overseas crisis could also hurt some investors’ confidence in JV funds.”

In an e-mail the CSRC sent to the fund ventures and seen by Reuters, the commission said:

“Recently, the international capital markets are hugely affected by the subprime crisis (paydayloans). In order to understand foreign shareholders’ situations, and strengthen supervision, JV fund companies please obtain information and pay close attention to the operational status of foreign shareholders.

“Please submit after the national holiday a report in the form of an email on how your foreign partners are affected by the financial crisis and how that could affect the joint venture fund company.”

A CSRC spokeswoman declined to comment.

CSRC is joining other regulatory bodies in containing risks stemming from the financial turmoil that has embroiled Western institutions such as Fortis (FOR.BR: Quote, Profile, Research, Stock Buzz), American International Group (AIG.N: Quote, Profile, Research, Stock Buzz) and Societe Generale (SOGN.PA: Quote, Profile, Research, Stock Buzz). The three firms all own Chinese fund ventures. 

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The future of Wachovia Corp., and its 4,800 St. Louis employees, is in limbo and could be tangled in a prolonged legal fight.

The battle for control tilted toward Wells Fargo on Sunday when a New York state appeals court blocked a lower court ruling that had favored rival bidder Citigroup.

On Saturday, Judge Charles Ramos of the trial-level New York Supreme Court issued an emergency order that preserved an earlier Citigroup agreement with Wachovia "until further order of the court." The decision threatened Wells Fargo’s takeover bid for Wachovia, which was announced Friday.

The legal action was just the latest twist in a week of tumult for Wachovia, the Charlotte, N.C.-based financial services firm that has its securities brokerage unit headquartered in St. Louis.

Citigroup said it would appeal the appeals court decision.

The fight also is being waged in federal court, where Wachovia asked U.S. District Judge John Koeltl to declare invalid part of the Citigroup deal that would have restricted Wachovia from considering competing bids. Koetl scheduled another hearing Tuesday.

With both Wells Fargo and Citigroup vowing to press their legal rights to a deal with Wachovia, analysts warned that a prolonged takeover fight carries enormous risk at a time when the nation’s financial system is under the worst stress since the Great Depression.

Citigroup had announced Sept. 29 that it had received federal government backing to acquire the banking assets of Wachovia for $2.1 billion, a bargain price of $1 a share. Under the Citigroup deal, Wachovia would retain its securities brokerage and mutual fund operation.

Then, late Thursday, San Francisco-based Wells Fargo made a $7-a-share bid, about $15 billion, for all of Wachovia, taking Citigroup by surprise.

Citigroup, however, claims it has an agreement that bars Wachovia from talking to other parties until today. The agreement stated that either party could go to court to force the other to comply with the contract’s terms.

In an angrily worded press release issued Friday, Citigroup said "a transaction with Wells Fargo is in clear breach of an exclusivity agreement between Citigroup and Wachovia."

Wachovia spokeswoman Christy Phillips Brown said the financial services firm believes a deal with Wells Fargo "is in the best interest of shareholders, employees and the American taxpayers. Under that agreement, Citigroup is always free to make a superior offer to Wachovia."

Wells Fargo said in a statement Sunday that it has a "firm, binding merger agreement" with Wachovia and remains confident that it will complete the deal.

The litigation among the three banks could go on for a while, as any ruling is likely to be appealed (cash loans).

"I would hope there would not be a long battle because that does not bode well for Wachovia’s existing business," said Ben Halliburton, chief investment officer at Tradition Capital Management. "Any delays in action and uncertainty of who is going to own Wachovia … just causes further problems."

The stakes are high for the other firms, too.

Citigroup, the biggest U.S. bank by assets, is trying to rebuild after $61 billion of losses tied to the collapse of mortgage markets.

If Wells Fargo succeeds in its takeover bid, it will become the nation’s largest bank, with branches stretching across the nation. The deal would also strengthen Wells Fargo’s securities brokerage operations.

The company said Friday that the brokerage, which has 4,800 employees in St. Louis, would remain headquartered here. Wells Fargo also has commercial banking operations in St. Louis.

Wachovia has been under pressure for months due to losses incurred by its mortgage services operations. Wachovia investors, including the biggest shareholder, Dodge & Cox, say they prefer Wells Fargo’s bid.

The bid is in the "best interests of shareholders," according to a statement from Dodge & Cox, Davis Selected Advisers LP and Sandler Family Interests.

The group said other shareholders support their position.

"A transaction that keeps Wachovia’s nationwide franchise intact and recognizes Wachovia’s value as a well-capitalized institution with strong earnings prospects is a far better outcome than what had previously been proposed," the investors said.

The Well Fargo bid has put federal regulators in an odd position. The FDIC has said it would review all proposals and work with regulators of all three institutions to resolve the tug of war.

The shareholders’ support of the Wells Fargo bid and the regulators’ neutrality makes some legal experts think Citigroup cannot block Wells Fargo’s bid to take over Wachovia.

Wachovia’s lawyers could argue that it had to entertain the possibility of a better deal and that to ignore a better offer would violate its fiduciary duties, or its legal obligations to protect the interests of its shareholders.

"Bidders jump deals all the time," said Jill Fisch, a law professor at the University of Pennsylvania. "A new buyer comes in, jumps a deal, makes a better offer."

Bloomberg News, McClatchy Newspapers and The New York Times contributed to this report.

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Canadian Imperial Bank of Commerce says it will limit its U.S. residential mortgage exposure in a deal that will see Cerberus Capital Management LP pay $1.05 billion (U.S.) in cash for senior notes linked to the bank’s U.S. residential real estate assets.

Cerberus will receive cash flow from the notes, while the CIBC, which wrote down its debt investments by about $7.55 billion (Canadian) since last year, more than any other domestic bank, will retain ownership of the underlying assets.

The Cerberus investment will "significantly limit our future exposure to the U.S. residential real estate market," said CIBC chief executive Gerry McCaughey.

CIBC said it’s giving away "potential upside" in its portfolio to protect against any downside in the real estate market.

CIBC in January sold most of its New York-based investment banking business to Oppenheimer Holdings Inc.

Cerberus, a New York-based firm chaired by former U.S. Treasury Secretary John Snow, expects to recoup its investment plus a return of about 20 per cent, McCaughey said. The notes mature in three to four years.

The real estate portfolio has a notional value of about $6 (payday loan online).3 billion (U.S.) and consists of mortgage-backed securities and collateralized debt obligations. The assets have been written down "by a material amount," said CIBC chief administrative officer Ron Lalonde, with a fair value of $1.08 billion at July 31.

"Some of those notes are in significant distress and will end up being liquidated and terminated for some amount of value," Lalonde added.

The transaction shows "there is capital out there to enter into these deals, but there hasn’t been an avalanche of them yet," Lalonde said.

"There is hedge fund and private equity money that stands ready to be deployed in the right types of investments in distressed assets," said Paul Jorissen, a partner at New York-based Mayer Brown LLP, which advised CIBC on the transaction. "The issue is trying to call the bottom."

From the Star’s wire services

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