Aug
9
Eating Out With Food Allergies
Filed Under Health | Leave a Comment
Families of children in on food allergies get remarkably nervous approximately dining out. For guaranteed people, unsanitary or disorderly kitchens may be not recently be cringe-worthy, but downright dangerous. 
Brandon Brigner is with a large number of children who experience drastic food allergies as citizens demand for stepped up restaurant safety efforts.(ABC News/Courtesy of the Brignor family )
Earlier the present summer, Sharon Brigner’s son Brandon was one of different children who had an frightfully conclusion call. On June 11 at a Chuck E. Cheese restaurant in northern Virginia, Brigner imparted upon ABCNews.com the current her son had a sizeable allergic reaction to egg in the wake of eating most mozzarella sticks this unknowingly contained the food he was allergic to.
Brigner argued the present week too the reaction occurred in spite of her son’s nanny requested the manager of the kid-friendly restaurant twice whether the food contained egg, and making reassured by the manager the current it did not.
The allergic reaction right out closed Brandon’s throat and sent him to the hospital at which he made a maximum dose of epinephrine to recover. Brigner stated the doctor imparted upon her too if a reaction so considerable crops up again, it should result in death.
“He said, ‘I’ve exhausted my arsenal of medicines. I do not can make out how else to do,’” Brigner recalled. “Those are scary idioms for me to hear as an ER nurse and a mom.”
Brandon has came up with a steady physical recovery but might be so livid by his finishing use overly he anxiously watches his mom prepare food.
Jun
20
McCain attacks Obama for opting out of public financing
Filed Under CNN News, Most Pepular, News | Leave a Comment
WASHINGTON (CNN) — Sen. John McCain on Thursday accused Sen. Barack Obama of breaking a promise when the Democrat decided to forgo public financing in this fall’s campaign.
Sen. Barack Obama repeatedly broke campaign fundraising records during the Democratic primary season.
Obama told supporters in an e-mail message Thursday that he would not accept about $85 million in public funds when he becomes the Democratic presidential nominee.
In the e-mail, Obama said the public campaign financing system allowed “special interests [to] drown out the voices of the American people” and asked his supporters to “declare our independence from a broken system.”
McCain said that Obama’s move to drop out of the system “should be disturbing to all Americans” and that he may decide to opt out, too.
“Sen. Obama’s reversal on public financing is one of a number of reversals … that he has taken,” McCain said while touring flood-damaged parts of Iowa.
“This election is about a lot of things, but it’s also about trust. It’s also about whether you can take people’s word. … He said he would stick to his agreement. He didn’t.” Watch McCain’s attack on Obama »
He said his campaign will reconsider whether to opt out as well.
“We”l have to reevaluate in light of his decision,” he said. But he said he leans toward taking public money.
But Rep. Rahm Emanuel, an Obama supporter, argued that the Democrat had “more than realized the objective of public financing” by setting up a system to accept small donations over the Internet.
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“It has given the American people a voice in our political process and has forever changed politics in this country by inspiring record numbers of Americans to participate in bringing change to Washington,” Emanuel said.
Despite the heated back-and-forth, CNN senior political analyst Bill Schneider said it is unlikely the controversy will influence voters.
“I’m not sure it’s a big deal for most voters. There’s not a lot of support for the public financing system.” Schneider said. “About a year ago, the polls asked people if they supported the idea that candidates and campaigns should be financed by taxpayer money … and most persons said no.
“They like the idea of financing campaigns through small contributions from a lot of individual contributors, which is what Obama has done,” he said.
Obama would be the first the major presidential candidate to drop out of the modern campaign financing system for the general election since its creation in 1976 in the post-Watergate era.
Under this system, candidates agree to spend only the public funds and cannot raise or spend money directly obtained from individuals.
Because he has decided not participate in the system, Obama will be able to spend an unlimited amount of money during the general election.
The two camps also bickered Thursday over whether they had held negotiations on public financing before Obama’s move to drop out.
Obama counsel Bob Bauer said he discussed the public funding issue for 45 minutes with Trevor Potter, his McCain counterpart, on June 6 when they met to talk about a possible town-hall appearance between the candidates.
Potter said the two “spoke in general terms about the public financing system, with Bob outlining reasons it could be considered ‘broken’ or irrelevant in 2008, and I explaining why Sen. McCain remained committed to it and thought it was good for the country.”
Given his record-breaking ability to raise donations over the Internet, the Illinois Democrat probably will be able to raise more than and outspend the presumptive GOP nominee. Watch CNN’s Candy Crowley explain the significance of Obama’s decision »
Since January 2007, Obama has raised more than $272 million, including nearly $31 million in April. During that time period, McCain has raised less than half that amount, roughly $100 million. In April, the Arizona Republican brought in about $18 million.
The FEC ruled unanimously in March 2007 that presidential candidates could accept general election public financing, provided that they return any money raised for the general election while following certain guidelines. At the time, Obama’s actions appeared to be a desire on his part to preserve the public financing option while enabling him to raise general election money.
After that ruling, spokesman Bill Burton said, “Sen. Obama is pleased the FEC took this important step in preserving the public financing system, which is why he sought the opinion. If Sen. Obama is the nominee, he will aggressively pursue an agreement with the Republican nominee to preserve a publicly financed general election.”
However, Obama asked supporters Thursday to “declare our independence from a broken system, and run the type of campaign that reflects the grass-roots values that have already changed our politics and brought us this far.”
The Democrat also attacked McCain and Republicans for taking money from lobbyists and political action committees, and he faulted McCain for not checking the campaign spending of conservative groups independent from his campaign.
“We’ve already seen that he’s not going to stop the smears and attacks from his allies running so-called 527 groups, who will spend millions and millions of dollars in unlimited donations,” the e-mail said, referring to independent political advocacy groups that often purchase issue ads independent of the presidential campaigns.
These groups operate under Section 527 of the Internal Revenue Service tax code.
E-mail to a friend Source
Jun
17
Police out as torch hits Xinjiang
Filed Under BBC News, News, Top Stories | Leave a Comment
Security was tight as the Olympic torch began passing through China’s mainly Muslim Xinjiang region, on a highly sensitive part of its trip to Beijing.
Police were out in force as the flame left People’s Square in the capital, Urumqi, on its run around the city.
The torch will spend three days in the region, which is home to around eight million Muslim Uighur people.
Ties between Chinese authorities and the Uighurs are tense. Officials fear separatists could target the relay.
The relay has been moved forward by a week, in an apparent attempt to avoid unrest. The torch’s visit to another potential hotspot, Tibet’s main city, Lhasa, has also been moved up.
Terror allegations
In Urumqi, very tight security was put in place ahead of the relay.
Police carried out vehicle checks and set up checkpoints in the normally busy city. Firecrackers were banned and many local people asked to stay away, reports said.
People entering People’s Square had to pass through metal detectors while police searched their bags, AFP news agency reported.
The majority of the crowd that gathered in the square were Han Chinese, the agency said.
Many Uighurs resent the large-scale influx of Han Chinese settlers into the resource-rich region.
Some groups are fighting to establish an independent Islamic nation, leading to periodic violence in Xinjiang.
Beijing accuses the groups of links to al-Qaeda and this year claims to have foiled at least two Xinjiang-based plots targeting the Olympic Games.
But human rights groups accuse the Chinese authorities of using the alleged terror links as a way of cracking down on the independence movement.
May
29
New York to recognize out-of-state gay marriage
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ALBANY, N.Y. - Same-sex marriages legally performed elsewhere will be recognized in New York in response to a state court ruling this year, Gov. David Paterson’s spokeswoman said Wednesday.ADVERTISEMENT
State agencies, including those governing insurance and health care, must immediately change policies and regulations to make sure “spouse,” “husband” and “wife” are clearly understood to include gay couples, according to a memo sent earlier this month from the governor’s counsel.
Gay marriage is not legal in New York, and the state’s highest court, the Court of Appeals, has said it can only be legalized by the Legislature. But the memo, based on a Feb. 1 New York Appellate Division court ruling, would recognize the marriages of New Yorkers who are legally wed elsewhere.
The appellate judges determined that there is no legal impediment in New York to the recognition of a same-sex marriage. The state Legislature “may decide to prohibit the recognition of same-sex marriages solemnized abroad,” the ruling said. “Until it does so, however, such marriages are entitled to recognition in New York.”
Massachusetts is currently the only U.S. state that recognizes same-sex marriage, but its residency requirements would bar New Yorkers from marrying there.
New York residents could instead flock to California, where gay couples will be able to wed beginning June 17 - unless that state’s Supreme Court decides to stay its own ruling. Upon their return home, in the eyes of the state, their unions would be no different from those of their heterosexual neighbors.
Gay couples could also travel outside the country to marry in Canada, for example.
Paterson spokeswoman Erin Duggan said the May 14 memo is intended to guide the actions of state agencies. Agencies have until June 30 to report back to the governor’s counsel on how, specifically, the directive will change existing state benefits and services for gay couples.
The memo states that failure to include gay marriages in the dispensing of state services such as health care benefits could violate state human rights law. The agencies could face sanctions for any violations, the memo warns.
The agency changes can be instituted through internal memos or changes in regulations and would not require legislative action, Paterson counsel David Nocenti said in the memo, which was first reported by The New York Times.
The February appellate decision involved the case of a woman whose female partner was denied health benefits by her employer even though she had been legally married in Canada.
Gay rights advocates have sought recognition for gay marriages so couples could share family health care plans, receive tax breaks by filing jointly, enjoy stronger adoption rights, and inherit property. Most of these advocates rejected civil unions, thought to be a compromise, because the unions lacked the legal protections of marriage.
May
11
Myanmar tries to get out the vote as aid deliveries languish
Filed Under CNN News, News, Top Stories | Leave a Comment
YANGON, Myanmar (CNN) — As aid groups struggled to distribute supplies to cyclone victims despite government obstacles, Myanmar TV was broadcasting messages urging people to vote “yes” in a referendum that critics say would strengthen the military rule.
Activists demonstrate over the Myanmar referendum at the Myanmar Embassy in Bangkok on Friday.
more photos » The marketing campaign showed pictures of people voting as a song played with the lyrics, “Let’s go to cast a vote with sincere thoughts for happy days.” Similar notes were posted on ballot boxes.
The New York Times said it appeared that some resources for cyclone victims was diverted to the vote campaign. In some cases, generals’ names were scribbled onto boxes of foreign aid before being distributed, according to the Associated Press.
A resident of Yangon said refugees seeking shelter in schools were evicted so the buildings could be used as polling places, the newspaper reported.
The United Nations estimates that the death toll from last weekend’s storm ranges from 63,000 to 100,000, well above the Myanmar government’s estimate of about 22,000. Tens of thousands of people are missing.
Most of the victims were in the Irrawaddy Delta, especially along the coastline of the Andaman River, where bodies floated in the water close to shore.
Joe Lowry of the International Red Cross said survivors were sleeping near fetid pools of water, breeding grounds for mosquitoes. Some have managed to build shelters of bamboo and palm leaves, he said.
“People are in great need of shelter materials, clean water,” according to Lowry. He said photographs taken of delta shoreline areas were so gruesome, he sees them when he closes his eyes, and he refused to share them with other relief workers.
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Three Red Cross planes carrying 14 tons of shelter materials landed at the Yangon International Airport on Saturday. Lowry said two more flights loaded with tarpaulins, tools, mosquito nets and jerry cans for hauling water were expected Saturday night. Another five should land by Monday.
The Red Cross, which has had staff members in the country since 1993, quickly emptied its warehouses after the cyclone hit. Teams loaded the items onto trucks for distribution, Lowry said, adding that thousands of volunteers have helped.
He said the director of the Red Cross delegation planned to tour the delta region, with the permission of the Myanmar Ministry of Health.
Two flights from the World Food Programme, which temporarily halted flights Friday after the government refused to let their workers pass out the supplies, arrived Saturday, one from Dubai and the other from Cambodia, said WFP-Asia spokesman Paul Risley. On board were a portable warehouse and other shelters.
Additional flights by the WFP and other U.N. agencies in various countries were expected, said WFP’s chief spokeswoman in North America, Bettina Luescher.
The French Foreign Affairs Ministry said one of its naval ships was waiting off the coast of India, waiting for Myanmar government authorization to enter territorial waters.
The ship, the Mistral, would not arrive in Myanmar until midweek, however. It is transporting 1,500 tons of medical equipment, food and water.
The ship had been involved in military exercises with Britain and India when military leaders decided to divert it to help the relief effort.
Bernard Kouchner, the French foreign affairs minister, said the aid will go directly to the victims.
“We won’t give aid to Burma’s junta, even if they would accept it. We will use our own channels in the country.”
The United States says it has permission to land a plane in Myanmar on Monday, and a senior military official said if that works out, the U.S. hopes to send in two more planes Tuesday.
CNN’s Dan Rivers, who toured the southern coast of the delta in a torrential rain, said the area also suffers from a fuel shortage. Rivers said he was being hunted by the government since he appeared on TV, because of his reporting, and was moving to a different hotel room every night.
May
3
US strike takes out suspected militant hideout in Sadr City
Filed Under Most Pepular, News, Top Stories, USA News | Leave a Comment
BAGHDAD - The U.S. military fired guided missiles into the heart of Baghdad’s teeming Sadr City slum on Saturday, leveling a building 55 yards away from a hospital and wounding nearly two dozen people.
Separately, the U.S. military said late Saturday that four Marines were killed on Thursday by a roadside bomb in Anbar province. The military also said that a U.S. soldier died of wounds suffered in a roadside bomb that struck the soldier’s vehicle during a combat patrol in eastern Baghdad Friday. At least 4,071 members of the U.S. military have died since the beginning of the Iraq war in March 2003, according to an Associated Press count.
AP Television News footage from Sadr City showed several ambulances destroyed and on fire, thick black smoke rising from them as firefighters worked to put out the flames.
The strike, made from a ground launcher, took out a militant “command-control center,” the U.S. military said. The center was located in the heart of the eight-square-mile neighborhood that is home to about 2.5 million people. Iraqi officials said at least 23 people were wounded, though none of them were patients in the hospital.
The U.S. military blamed the militants for using Iraqi civilians as human shields.
“This is a circumstance where these criminal groups are operating directly out of civilian neighborhoods,” military spokeswoman Spc. Megan Burmeister told The Associated Press in an e-mail.
She said it presents a “complex and very difficult” challenge for U.S. forces to strike the militants when they are “putting themselves next to municipal buildings.”
Dr. Ali Bustan al-Fartusee, director general of Baghdad’s health directorate, told the AP that 23 civilians were wounded in the strike.
He said no patients in the hospital were hurt, but that some of the wounded included civilians outside on their way to visit patients in the hospital. He also said 17 ambulances were damaged or destroyed.
AP Television News footage showed about 100 people milling about in the rubble of the destroyed building. A deep crater was seen just yards from the hospital, which is surrounded by 15-foot-tall concrete blast walls. It appeared that one section of the blast wall was leveled.
Windows were blown out of cars in the hospital’s parking lot, but there did not appear to be any damage to the hospital itself.
Shiite extremists are known to have operated in a building next to the hospital, local reporters said.
U.S. and Iraqi forces have waged street battles with Shiite militias since late March in Sadr City, the power base of radical Shiite cleric Muqtada al-Sadr and his Mahdi Army militia.
The fighting is part of a 5-week-old crackdown by the Iraqi government and U.S. forces on Shiite militia factions. The clashes have brought deep rifts among Iraq’s Shiite majority and have pulled U.S. troops into difficult urban combat.
Militia members have been blamed for firing hundreds of rockets or mortars from Sadr City into the Green Zone, the U.S.-protected area housing the American embassy and much of the Iraqi government. In the past month, more than a dozen people - including two American civilians and two U.S. soldiers - have been killed inside the zone during the attacks.
In response to the shelling, American and Iraqi troops in recent weeks have moved into Sadr City, hoping to push the militants far enough from the Green Zone so their rockets and mortars would be out of range.
Iraq’s Prime Minister Nouri al-Maliki, a Shiite, shows no indication of easing the pressure on militia groups, including the powerful Mahdi Army led by al-Sadr. Al-Maliki has been seeking to increase leverage on Iran, which is accused of training and arming some Shiite militia groups. Iran denies the claims.
A five-member Iraqi delegation returned from Tehran Saturday from a meeting aimed at halting suspected Iranian aid to militiamen.
Ranking deputy Khalid al-Atiyah said the Iranian government had expressed its readiness to assist the Iraqi government” against the extremists and “in its security measures.” He did not elaborate.
During clashes over the past two days in Sadr City, at least 100 people have been killed, Iraqi health officials said.
Also Saturday, the Turkish military claimed air strikes it carried out earlier this week in northern Iraq killed more than 150 Kurdish rebels. The military said it successfully hit all its targets in a three-hour air operation on Mount Qandil early Friday.
The leadership of the Kurdish rebel group is believed to be hiding in the Qandil region - about 60 miles from the Turkish border.
In northern Iraq, Ahmed Danaf, the head of external relations for Kurdish group, claimed in a phone call that the raid killed six members of the Free Life Party, the anti-Iran Kurdish group PEJAK.
Georgian Defense Ministry spokesman Giga Tatishvili said two servicemen from the ex-Soviet republic were killed and one wounded south of Baghdad on Friday when a parked car bomb exploded. The deaths were the first combat fatalities the nation’s military has suffered in Iraq, where it has had a presence since August 2003.
Source:
Apr
22
RBS sets out £12bn rights issue
Filed Under BBC News, News, UK News | Leave a Comment
Royal Bank of Scotland (RBS) is asking shareholders for an extra £12bn as the bank seeks to shore up its finances.
The rights issue was announced as part of a trading update and is one of the largest seen in UK corporate history.
The firm also announced a write-down of £5.9bn before tax, following its exposure to the credit markets.
RBS added that it was reviewing its insurance unit, which could lead to the sale of its Churchill Insurance and Direct Line businesses.
Market conditions
RBS, which played a leading role in last year’s takeover of the Dutch bank ABN Amro, said it needed to increase its cash base and a rights issue was the best option.
WHAT IS A RIGHTS ISSUE?
Companies issue extra shares to raise money
They are offered to existing shareholders, usually at a discount to the current share price
Shares are offered in proportion to existing holdings, so if you own 10% of the old shares you are offered 10% of the new ones
Under the terms of the rights issue, 11 new shares will be issued for every existing 18 shares at 200 pence each.
The bank said the extra money was needed in light of “severe and increasing deterioration in credit market conditions, the worsening economic outlook and the increased likelihood that credit markets would remain difficult for some time”.
In its latest update, which covered the period from 31 December to 22 April 2008, RBS said global banking and markets had been “acutely affected by credit market conditions” especially in March.
BBC business editor Robert Peston said that the bank would “retain more capital in its balance sheet to meet the risks of default by borrowers than it had been doing”.
RBS said that, following its integration with ABN, it aimed to cut staff numbers by more than originally planned, and added it was seeking to cut costs by 2.3bn euros, up from an earlier estimate of 1.7bn euros
Source:
Mar
29
Clinton rules out leaving race early
Filed Under Most Pepular, News | Leave a Comment
HAMMOND, Ind. - If Hillary Rodham Clinton is feeling heat from pundits and party elders to quit the race and back Barack Obama, you’d never know it from her crowds, energy level and upbeat demeanor on the campaign trail.
“There are millions of reasons to continue this race: people in Pennsylvania, Indiana and North Carolina, and all of the contests yet to come,” Clinton told reporters Friday. “This is a very close race and clearly I believe strongly that everyone should have their voices heard and their votes counted.”
The former first lady weathered a two-pronged blow Friday, with influential Pennsylvania Sen. Bob Casey Jr. endorsing Obama and another Senate colleague, Vermont Democrat Patrick Leahy, urging her to step aside. But to hear Clinton tell it, it was just another day in an epic primary battle whose result is still not known.
“I believe a spirited contest is good for the Democratic Party and will strengthen the eventual nominee,” she said. “We will have a united party behind whomever that nominee is. … I look forward to campaigning over the next several months.”
Traveling across Indiana, the former first lady was greeted by large, enthusiastic audiences who roared their approval at her proposals to help fix the state’s economic challenges.
At events here and in North Carolina on Thursday, Clinton raised the issue of whether she should quit the race, only to have it firmly batted down by her supporters.
“There are some people who are saying, you know, we really ought to end this primary, we just ought to shut it down,” she said in Mishawaka, Ind., drawing cries of “No, no!” inside a packed gymnasium.
In Hammond, she compared the state’s struggling steel industry to her own efforts to fight the odds.
“I know a little bit about comebacks,” she said to cheers. “I know what it’s like to be counted down and counted out. But I also know there is nothing that will keep us down if we are determined to keep on.”
Yet despite the optimistic talk, there is no doubt that Clinton faces an uphill battle to secure securing her party’s nod.
She trails Obama among pledged delegates and is not expected to close that gap even with a strong showing in the 10 remaining primaries. She also trails in the popular vote and probably cannot make up the deficit without revotes in Michigan and Florida, whose January primary results were nullified because they broke party rules. Neither state is expected to go through with new contests.
As a result, the so-called “superdelegates” - some 800 elected officials and party insiders who can choose to support any candidate - would risk intraparty rebellion if they backed Clinton.
The New York senator reaffirmed her belief that superdelegates will base their choice on which candidate would make the best president and would have the best chance to beat Republican John McCain in November.
All the more reason to look forward to Pennsylvania’s primary April 22, Indiana and North Carolina’s May 6 and the handful of others that follow, Clinton insisted.
“There will be additional information that will inform those decisions that will come from these upcoming contests,” she said.
Dismissing concerns raised by Democratic National Committee Chairman Howard Dean that a prolonged contest would demoralize the party base, Clinton pointed to a recent surge in voter registration and projected turnout in Pennsylvania. Democratic registration went up by 4 percent in the state this year, while it declined 1 percent among Republicans.
“Both Senator Obama and I have brought millions of new people into the process,” she said. “People are registering to vote for him and to vote for me. They’re part now of the Democratic Party.”
Asked what she thought of Obama’s comment Friday that the Democratic primary race resembled “a good movie that lasted about a half-hour too long,” Clinton smiled broadly and said, “I like long movies.”
Sourrce: Yahoo News
Mar
28
Sagna ruled out for three weeks
Filed Under BBC News, Sports | Leave a Comment
Arsenal defender Bacary Sagna has been ruled out for at least three weeks with an ankle injury.
The 25-year-old France international scored the Gunners’ only goal in the 2-1 defeat to Chelsea before limping off in the 72nd minute.
Arsenal manager Arsene Wenger said: “The first news that we have is that he could be out for quite a while.
“I have seen it again. He wanted to kick the ball out and he twisted his ankle. That made it a bad injury.”
606: DEBATE
Will Arsenal miss Sagna?
Sagna is now likely to miss Arsenal’s triple header with Liverpool in the Premier League and Champions League at the beginning of April.
He could also miss the Gunners’ crucial trip to Manchester United on 13 April.
The right-back has featured on a regular basis for Arsenal this season after signing from French side Auxerre in the summer
Source: BBC
Mar
16
Fed and rival bail out Bear Stearns
Filed Under Business | Leave a Comment
NEW YORK - On the verge of a collapse that could have shaken the very foundations of the U.S. financial system, investment bank Bear Stearns Cos. was bailed out Friday by a rival and the federal government. The near-miss raised new alarm about the credit crisis - and whether other big firms might be in jeopardy.
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The rescue came from JPMorgan Chase & Co. and, in an extraordinary step, the Federal Reserve, both rushing to pump new money into the venerable Wall Street firm after its financial state deteriorated so much in a 24-hour period that it threatened to fail.
Bear Stearns stock lost nearly half its market value, about $5.7 billion, in a matter of minutes, and pulled the broader market down with it. The Dow Jones industrial average fell nearly 200 points.
If Bear Stearns were to go under, “it has the potential of bringing down the whole market,” said Richard Bove, an analyst at Punk, Ziegel & Co. “This is the crescendo of the crisis.”
JPMorgan and the central bank agreed to extend loans for 28 days to Bear Stearns, the nation’s fifth-largest investment bank and the one hit hardest by the subprime mortgage mess.
Two hedge funds managed by Bear Stearns failed last summer, setting off a credit crisis that has swept up banks and brokerages around the globe.
In backing up JPMorgan, the Fed dusted off a rarely used, Depression-era provision to provide loans. It also said it was ready to step in to fight an erosion of confidence in the nation’s largest financial institutions.
Officials from the Fed and the Securities and Exchange Commission held conference calls throughout the day Thursday to assess the potential impact on the broader economy, according to a Treasury official, who spoke on condition of anonymity because of the sensitive nature of the discussions.
For Bear, the crisis started when market speculation grew that it might have to seize collateral - mostly mortgage-backed securities worth next to nothing - from the private equity firm Carlyle Group.
Carlyle runs a bond fund and has come under intense pressure during the past week from creditors demanding collateral to back their investments.
As speculation swelled in the market, investors, customers and lenders raced to withdraw their money or rescind their credit lines. By Thursday night, Bear Stearns Chief Executive Alan Schwartz said, the bank realized the withdrawals might outpace the bank’s resources - so it reached out to JPMorgan for help.
JPMorgan, the nation’s third-largest bank, has been hurt far less by the mortgage mess than other financial institutions. It will provide secured loans to Bear for four weeks - insured, in essence, by the Fed.
Schwartz said it would buy Bear time and allow it to convince customers “that we have the ability to fund ourselves every day, to do business as usual.” No one has disclosed how large the financing offered to Bear Stearns is.
The CEO also confirmed - as many on Wall Street had suspected - that Bear Stearns could be up for sale. He told analysts on a conference call that the bailout is a “bridge to a more permanent solution.”
Bear is working with investment bank Lazard Ltd. to explore its options. That may include an outright sale of Bear Stearns to JPMorgan, something top executives from both banks were discussing, according to a person familiar with the talks who was not authorized to speak on the record.
JPMorgan is considered to have one of the strongest balance sheets among Wall Street banks, and is not already involved in a rescue like Bank of America’s purchase of Countrywide Financial Corp., the nation’s largest mortgage lender.
Bear Stearns, which has about 14,000 employees worldwide, has struggled since the two hedge funds under its control lost billions of dollars after investing heavily in securities backed by pools of subprime mortgages.
“They were the dominant firm for repackaging mortgages,” said Andrew Wilkinson, senior market analyst at Interactive Brokers Group. “That’s where all earnings came from. They had the least-diversified earnings stream of all of Wall Street securities firms, and as a result, they’re paying the price today.”
As delinquencies and defaults swelled among subprime mortgages, investors shied away from buying securities backed by the troubled loans.
Those fears expanded to encompass all but the safest bonds and securities, forcing investment banks to significantly reduce the value of their holdings and drying up money throughout the market.
Bear Stearns has racked up $2.75 billion in write-downs since last year, and releases first-quarter results on Monday that could show more losses. The bank lost $859 million during the quarter that ended Nov. 30, a stark contrast to its $558 million profit during the same period just one year earlier - before the credit crisis.
The broader financial services sector has racked up nearly $160 billion in write-downs since the middle of last year.
“My guess is by next week, there will be rumors of other large, familiar institutions” that could be in trouble, said Anil Kashyap, a professor at the Graduate School of Business at the University of Chicago.
JPMorgan said it would not expose itself to any serious risk by helping Bear, but its shares dropped anyway, down $1.57, or about 4 percent, to $36.54. Bear stock plummeted 47 percent, or $27, to $30.
Source : Yahoo News