Monbdy, September 28, 2008

By CNNMoney.com staff

Last Updated: September 28, 2008: 1:40 AM ET

NEW YORK (CNNMoney.com) -- Congressional leaders said shortly after midnight that they had reached a tentative deal over the White House's proposed $700 billion bailout of the financial system.

Marathon talks involving members of both parties and Treasury Secretary Henry Paulson were aiming to craft final legislation by Sunday evening - in time for the start of financial markets around the world.

"We have made great progress," Paulson said.

Paulson made the announcement along with House Speaker Nancy Pelosi, D-Calif., Senate Majority Leader Harry Reid, D-Nev., and other legislators who have been working to get an agreement.

They did not offer details of their agreement but have said they hoped to do so later Sunday.

The talks were pushed forward on Saturday by a decision by key lawmakers to get together and meet.

"When we get in that room as principals, we will stay there until we reach an agreement," said Sen. Judd Gregg, R-N.H., on Saturday.

One of the sticking point has been whether to put curbs on executive compensation as part of the bailout, Conrad said. He said the notion of golden parachutes "really irritates people," but that negotiators are working through how to implement limits.

Treasury Secretary Henry Paulson first announced the bailout plan on Sept. 18.

The Bush administration is seeking authority for Treasury to buy as much as $700 billion in troubled mortgage assets that are weighing down banks and other financial institutions - that, in turn, could free up the banks to start lending again.

If enacted it would be the most dramatic and extensive government intervention in the economy since the Great Depression.

The aim is to unfreeze the credit markets - short-term lending among banks and corporations - by giving Treasury authority to purchase bad assets from banks and other financial institutions.

The core of the problem is bad real estate loans that have led to record foreclosures when the housing bubble burst and home prices declined.

In the past two weeks, the banking world and Wall Street have been reordered by a wave of collapses and mergers. The most recent development was the seizure by federal regulators on Thursday night of Washington Mutual, once the nation's largest thrift and a major mortgage lender.  

2) Commentary by David Zwebner, CEO of CommStock Trading 

U.S. Economy - Rescue Plan In Limbo
So far, there is no bipartisan agreement to rescue the financial markets and the main roadblocks are conservative House Republicans who say that the Paulson plan is too expensive and unpopular with their constituents. What will it take to stop the flight to liquidity?

Meanwhile, federal regulators took control of Washington Mutual, the largest U.S. savings and loan, and sold most of it to J.P. Morgan Chase for $1.9 billion on Thursday night. It was the largest bank failure in U.S. history, but depositors are said to be protected.

The U.S. Commerce Department said that real GDP was up an annual rate of 2.8% in the second quarter, down from last month's estimate of 3.3% annualized growth. Using current dollars, GDP was up 4.1% in the second quarter from a year ago, down slightly from last month's estimate. The June eurodollars jumped up .215 to 96.94.

The Commerce Department also said that corporate profits from current production were down $60.2 billion in the second quarter after a decrease of $17.6 billion in the first quarter.

The University of Michigan's index of consumer sentiment increased from 63.0 to 70.3 in September, a little weaker than expected.

Grains and Cotton
December corn fell 15.25 cents to $5.43, pressured by favorable harvest weather and concerns about the economy.

Metals
December gold finished up $6.50 at $888.50, regarded as a safe haven for some investors while Congress decides whether or not to take action to stem the credit crisis.

Currencies
Japan's Statistics Bureau said that consumer prices were up 2.1% in August from a year ago, down from a 2.3% gain in July. In Tokyo, prices were up 1.4% in September from a year ago. The December yen closed up .0030 at .9503.

France's National Institute for Statistics and Economic Studies said that real GDP was down .3% in the second quarter after recording a .4% gain in the first quarter. For all of 2008, they expect real GDP to increase 1.0%.

Statistics New Zealand said that real GDP was down .2% in the second quarter after dropping .3% in the first quarter - an official recession.

David Zwebner, CEO
CommStock Trading Ltd.
Tel: +972-(0)2 624-4963
Fax: +972-(0)2 624-4876
www.ecommstock.com

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Interested in reading perspectives and analyses on the Forex market?  In learning what factors affect the Forex market every week and what to be on the lookout for?  In getting trade recommendations?   Email mona@ecommstock.com  to get your copy of a weekly Forex report.

4) Closing Prices for Friday, September 26, 2008 

Amidex: Amidex35 (Class No Load Shares), $13.43; Index, 1891.55, Daily Change, 1.77%; “A” Shares NAV, $10.34.

Global Asset Management: Capital Appreciation, $257.82; Composite Absolute Return, $863.72; Diversity, $697.90; GAMCO, $846.78; Interest Trend, $226.42; Trading IV-US$ Class, $140.82; US$ Special Bond Fund, $400.74.

Invesco: Asian Equity Core, $3.90; Bond, $25.17; Emerging Markets Bond, $18.68; European Bond, EUR 4.2740;

Gilt, GBP 12.10; Global High Income, $11.12; Japanese Equity Core, $1.380; UK Equity, GBP 4.70. 

JPMorgan Fleming: JF Eastern Smaller Co., $81.09; JF Japan, JPY 14,671; JF Japan Equity, $11.27;

JF Japan OTC, JPY 903; JF Japan Smaller Companies, JPY 31,538; JF Japan Technology, JPY 42,323; JF Korea, $33.67;

Pacific Securities, $166.13; Pacific Smaller Companies $19.05; Global Bond & Currency, $21.42;

JF America, $41.05; JF Europe, $39.29; JF Germany, EUR 18.52; JF Global Equity, $36.67.

PCP: North America, $11.30; Europe, $16.43; Emerging Markets, $14.11; Balanced, $7.77; Aggressive, $6.52.                                                                                                

Platinum (updated once a month – August 2008 Prices): All Weather, $129.99; Equity Plus, $91.40;

Prot. Equity Plus, TBA; Prot. Income Plus, TBA; Cap. Prot. Income Plus A, TBA.

Scottish Provident: Adventurous 1, GBP 2.584; Balanced 1, GBP 2.136; USD Adventurous 1, $2.045;

USD Balanced 1, $2.019; USD Cautious 1, $1.939; For Preference: Baring GUF Eastern Europe, $106.94; Fidelity Funds International, $30.94; Invesco Asian Equity Core, $3.960.

 Mona Liss
CommStock Trading Ltd
PO Box 7777
Jerusalem 91077
Tel: +972-2-6244963
Fax: +972-2-625 9515