Wednesday, September 17, 2008

March on State Capital in Lansing Amid Financial Crisis on Wall Street, Today at 11:00am

For Immediate Release

Media Advisory

Event: Moratorium Now! at State Capital, Sept. 17, 1100am
March on Lansing to Demand Hearing on SB 1306!
Contact: Moratorium Now! Coalition to Stop Foreclosures &
Evictions; CUM Church, 23 East Adams, 4th Floor
Phone: 313.319.0870

Amid Collapse of Lehmans Bros., Merrill-Lynch and AIG, Moratorium Now! Coalition Will March on State Capital Sept. 17 to Demand Hearings on SB 1306--Bill Would Impose a Two Year Halt to Home Foreclosures and Evictions

Organizers for the Moratorium Now! Coalition to Stop Foreclosures and Evictions will be taking people to Lansing on Wednesday, Sept. 17 to hold a public hearing demanding the immediate passage of Senate Bill 1306, which would impose a halt to foreclosures for two years in the state of Michigan.

The demand for a moratorium on foreclosures becomes more urgent everyday amid the collapse of Lehman Bros., the selling of Merrill-Lynch and the failure of AIG. Such turmoil on Wall Street stemming from the bursting of the housing bubble, makes the demand for a moratorium on foreclosures
the only real solution to the immediate crisis.

This bill, SB 1306, which was introduced by State Senator Hansen Clarke during the Spring, has languished in the Banking and Financial Services Committee because of the refusal of the Chair, Randy Richardville, to hold hearings and move the legislation forward.

The recent federal government takeover of Fannie Mae and Freddie Mac clearly illustrates the depths of the crisis with $5 trillion in mortgage value under threat of total collapse. The impact of this failure, coupled with the crisis at Lehman Bros. and other banking institutions, demands immediate action to provide relief to working families by the state government in Lansing.

In late August, members of the Moratorium Now! Coalition from Richardville's district in Monroe, as well as several activists from around the state, hand-delivered a letter to Richardville's home demanding action on the crisis in the state stemming from the seizure of homes by banks and the failure of government to take effective measures.

Coalition members are saying that they will hold a hearing at the State Capital on Sept. 17. This will be done even if Banking and Financial Services Committee Chair Richardville continues to ignore the suffering of thousands of people throughout Michigan who are being evicted by predatory lending institutions everyday.

Moratorium Now! has recently gained the support of the Detroit City Council for rapid passage of SB 1306. In a letter delivered to the Council and the incoming interim Mayor Kenneth V. Cockrel, Jr., we have requested that the city apply to Gov. Granholm to declare a state of economic emergency in Detroit, which could impose a moratorium on all foreclosures throughout the state.

Transportation arrangements are being made for the trip to Lansing on Sept. 17. Dozens of community organizations, religious groups, labor activists and public officials have endorsed this action.

Members of the Moratorium Now! Coalition members are available for comment at the contact numbers and addresses listed above.

Wednesday, September 17, 2008
07:18 Mecca time, 04:18 GMT

Markets rally on $85bn AIG rescue

AIG's business includes retail financial products such as insurance and guaranteed annuities

The US Federal Reserve has announced an $85bn emergency loan to rescue troubled insurance giant American International Group.

The US central bank said on Tuesday that a "disorderly failure" of AIG could undermine already fragile financial markets and added that the US treasury department - which had just a day before preached against government bail-outs - was in full support of the decision to rescue AIG.

Asian markets, already tracking an overnight rally on Wall Street on expectation of the government intervention, opened higher on Wednesday after two days of sharp declines.

Japan's benchmark Nikkei-225 index gained 2.1 per cent in early trading on Wednesday after falling to its lowest level in more than three years on Tuesday.

South Korea's Kospi surged about 3 per cent and Australia's securities exchange was up 54 points.

The Dow Jones had gained 1.3 per cent on Tuesday after falling on Monday to its lowest level since the September 11, 2001 attacks on the US.

Besides the AIG rescue, markets also appeared encouraged by the US Federal Reserve's decision to hold interest rates steady at 2 per cent - a move seen as a sign of confidence in a recovery.

The Asia upswing also comes as Japan's central bank said on Wednesday that it had injected two trillion yen ($19bn) more into money markets in an effort to stabilise financial markets.

The Bank of Japan had on Tuesday already released 2.5 trillion yen into the markets as other central banks collectively pumped hundreds of billions of dollars into money markets to ensure the supply of funds does not dry up.

UN fears

Ban Ki-moon, the UN secretary-general, expressed concern on Tuesday that the world's poorest could be worst hit by the financial crisis if rich donor nations lose their capacity to help achieve the UN millennium goals to fight poverty.

He urged a resumption of stalled world trade talks, which the UN sees as crucial to opening world markets to poorer developing countries.

Amy Auster, the head of international economics at ANZ Bank in Melbourne, Australia told Al Jazeera there was good news and bad news for the man in the street from the global financial turmoil.

The good news, she said, was that rising global inflation that had been a major worry just a few months ago, was now likely to come down, meaning food and fuel should become cheaper.

But economic growth was also slowing and that could mean a loss of many jobs.

'Disorderly failure'

Al Jazeera's John Terret explained that AIG was in trouble because it insured so many loans from private lenders to people who could not afford to meet monthly mortgage repayments.

Now all those people with insurance have come calling for their money and AIG - otherwise a sound business - cannot afford to pay them all.

The Federal Reserve said under the two-year loan deal to AIG, the government would receive a 79.9 per cent equity interest in the group and has the right to veto payment of dividends to shareholders.

"The board determined, that, in current circumstances, a disorderly failure of AIG could add to already significant levels of financial market fragility and lead to substantially higher borrowing costs, reduced household wealth and materially weaker economic performance," the US central bank said in a statement.

It said that the loan was "expected to be repaid from the proceeds of the sale of the firm's assets" and try to assure Americans that "the secured loan has terms and conditions designed to protect the interests of the US government and taxpayers".

Rescue defended

Henry Paulson, the US treasury secretary, had just a day ago called for "market discipline" to let failing institutions fail in the wake of the collapse of US investment bank Lehman Brothers, indicating that he was wary of more taxpayer-funded bail-outs of major financial institutions.

But he said he backed the AIG deal.

"These are challenging times for our financial markets," he said in a statement. "I support the steps taken by the Federal Reserve tonight to assist AIG in continuing to meet its obligations, mitigate broader disruptions and at the same time protect the taxpayers."

Federal Reserve officials told reporters on Tuesday that the AIG rescue was necessary, unlike that of Lehman Brothers, because of the insurer's extensive ties to other firms and retail products.

Markets were more prepared for Lehman's failure and the Securities and Exchange Commission had procedures in place to deal with a securities firm's failure, the officials said, but AIG was deemed to be a very complex firm with extensive operations in many parts of the financial markets including retail financial products, such as insurance and guaranteed annuities, they added.

The fallout from AIG's collapse could affect not just investors but the average person who buys such products as car or life insurance.

Far more than other insurers, AIG has been a big player in a complex parallel market called credit default swaps, financial instruments in which Wall Street companies take out a form of market insurance against the risks of bond default.

These products, often linked to the US real estate market, are at the heart of the current banking crisis and have led to massive write-downs of assets around the world.

Source: Agencies

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