Even America’s roads are broke. The surge in oil prices has not only forced Americans to reduce the driving and buying of cars, it has also forced the US Government trust fund that finances highways to seek a bailout because it’s almost broke. The Highway Fund needs an emergency $US8 billion from Congress approved by the end of this week, otherwise it will not be able to hand out money to repair roads damaged by the recent spate of hurricanes and heavy rain in parts of the US.
It is now making staggered payments and only paying part of the money requested by the states concerned. The US transport Secretary, Mary Peters revealed the problems, which have been known for some time in a statement and media conference Friday in the US.
For example in the four weeks to last week, the demand for petrol and diesel was 3.5% down on a year ago. US drivers having been doing that now for all eight months of this year so far and the trust fund, which had $US8.1 billion in it at the start of the current US financial year on October 1 last year, but payments will exceed collections from the tax by $US8.3 billion. The House of Representatives has approved an $US8 billion bailout for the 2009 financial year, which starts next month, but that money is needed this week to fill the holes in the 2008 year’s accounts. — Glenn Dyer
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No end in sight, or the worst is yet to come. The Bank for International Settlements, the central bankers’ central bank, released its September 2008 Quarterly Review last week. One local newspaper (the AFR) misquoted the BIS from one of the articles in the review, suggesting that the BIS had said there is no end in sight to the credit crunch. This is not quite what the BIS said.
The overview section charts the progress of the credit crunch through this year, as it has waxed and waned. In the June 2008 quarter of this year it seemed to be waning but that depends on how you read the evidence. The BIS notes that international bond sales almost tripled in the second quarter from the first, amounting to a net US$1071 billion. This is almost as much as was recorded in the second quarter of 2007, just before the credit crunch began in earnest.
In looking at the composition of this second quarter increase in international bond issuance, the BIS notes that issuance by financial institutions quadrupled to US$827 billion, while corporate issuance was a little more than twice the volume seen in the first quarter, at US$131 billion. The significant increase in financial institution issuance is consistent with what we saw with Australia’s financial institutions – there was a rush to lock away funding before it became even more expensive or markets dried up. — The Sheet
Asian central banks are winners in Fannie/Freddie bailout. Investors around the world breathed a sigh of relief on Sunday after the U.S. government took over and backed Fannie Mae and Freddie Mac, assuring a continued flow of credit through America’s wounded mortgage system. But the takeover of the companies reinforced concerns about the troubles of the American economy and highlighted the United States’ significant reliance on foreign investors, particularly in Asia.
Almost immediately, the move will protect central banks in Asia, which have amassed hundreds of billions of dollars of Fannie Mae and Freddie Mac bonds from taking big losses. The move should also bode well for American financial institutions and, in the short term, the broader stock market.
As policy makers looked to the start of trading in Asia on Monday, investors said they expected the spread between Treasury securities and comparable Fannie Mae and Freddie Mac debt to shrink drastically, reflecting renewed faith about the safety of the market. — International Herald Tribune
With Chrome, Google is not fighting the browser war. Why is Google entering the already-crowded browser market? Because its future is directly tied to the continued proliferation of Web apps, which require improvements in browsers at a faster pace than the nonprofit Mozilla Foundation can afford, or that Microsoft, with its stake in licensed software, shows an interest in driving. Google is impatient to give people better access to its massive data centers and believes it needs to build a browser from scratch with the goal of shifting the focus to running applications, not just displaying pages.
Businesses are demanding more from their browsers because of the ever-growing number of Web apps. For those Salesforce.com customers who “live in the app,” Chrome’s isolated sandbox approach–which keeps one business app from dragging down others’ performance — is appealing, says Adam Gross, VP of Salesforce developer marketing. “It speaks to a world not about Web sites you visit once, but apps like Salesforce or Gmail that you live in all day, every day,” Gross says. — InformationWeek