Morgan Stanley to invest in new hires: report (Reuters)

Reuters - Morgan Stanley plans to use the
$1 billion it saved by cutting 4,800 jobs this year to hire
top-level executives in areas like derivatives, risk management
and proprietary trading, the Financial Times reported.

Oil Supply Flows On Saturn’s Moon

John McCain wants to drill, drill, drill; oil execs tell him that it will bring the price down quickly. In fact, he credits President Bush just talking about drilling with reducing the price ten bucks a barrel. Here is the best opportunity ever- according to Wired, scientists have just discovered a lake of petroleum on Titan, a moon of Saturn. They call it Ontario Lacus because it is the size of Lake Ontario, but are looking for a less foreign alternative. And you don’t even need a drill; just a big bucket.

Economy - Wednesday (Investor’s Business Daily)

Investor’s Business Daily - Employment listings posted on Internet job boards fell 7.9% to 3.86 mil in July from about 4.19 mil in June, according to the Conference Board. July is typically a slow month, but the figures were below forecasts. There were 4.08 mil help-wanted ads posted a year ago. The private research group said there is little sign of any upturn soon.

Chrysler in talks with Tata and Fiat: sources (Reuters)

Reuters - Chrysler is in talks to lease U.S.
production capacity and share retail distribution with Fiat SpA
, allowing the Italian automaker to return the U.S.
market for the first time in 25 years, people briefed on the
talks said on Wednesday.

Starbucks details store closing plan as posts loss (Reuters)

Reuters - Starbucks Corp laid out
detailed plans on Wednesday for closing U.S. stores this year
and next, cheering investors who felt the coffee company
overbuilt at home and sending its shares up 4 percent.

Office supply retailers struggle in North America (AP)

AP - Office supply retailers felt no relief from the pinch of weaker spending by consumers and small businesses, with both Office Depot and OfficeMax citing the struggling economy as they reported losses for the second quarter.

Robert Weissman: Celebrate, Don’t Mourn, Collapse of WTO Talks

Predictably, the cheerleaders for corporate globalization are bemoaning the collapse of World Trade Organization negotiations.

“This is a very painful failure and a real setback for the global economy when we really needed some good news,” said Peter Mandelson, the European Union’s trade commissioner.

Even worse, says the corporate globalization rah-rah crowd, the talks’ failure will hurt the developing world. After all, these negotiations were named the Doha Development Round.

“The breakdown of these talks is bad news for the world’s businesses, workers, farmers and most importantly the poor,” laments U.S. Chamber of Commerce President Tom Donohue.

But don’t shed any tears for the purported beneficiaries of the WTO talks. If truth-in-advertising rules applied, this might have been called the Doha Anti-Development Round.

The alleged upside of the deal for developing countries — increased access to rich country markets — would have been of tiny benefit, even according to the World Bank. The New Delhi-based Research and Information System for Developing Countries points out that Bank analyses showed a successful conclusion of the Doha Round would, by 2015, increase developing country income in total by $16 billion a year — less than a penny a day for every person in the developing world.

The World Bank study, however, includes numerous questionable assumptions, without which developing countries would emerge as net losers. One unrealistic assumption is that governments will make up for lost tariff revenues by other forms of taxes. Another is that countries easily adjust to import surges by depreciating their currencies and increasing exports.

In any case, the important point is that there was very little to gain for developing countries.

By contrast, there was a lot to lose.

The promise to developing countries was that they would benefit from reduced agricultural tariffs and subsidies in the rich countries. Among developing nations, these gains would have been narrowly concentrated among Argentina, Brazil and a few other countries with industrial agriculture.

What the spike in food prices has made clear to developing countries is that their food security depends fundamentally not on cheap imports, but on enhancing their capacity to feed themselves. The Doha rules would have further undermined this capacity.

“Opening of markets, removal of tariffs and withdrawal of state intervention in agriculture has turned developing countries from net food exporters to net food importers and burdened them with huge import bills,” explains food analyst Anuradha Mittal of the Oakland Institute. “This process, which leaves the poor dependent on uncertain and volatile global markets for their food supply, has wiped out millions of livelihoods and placed nearly half of humanity at the brink of hunger and starvation.”

Farmers’ movements around the world delivered this message to government negotiators, and the negotiators refused to cave to the aggressive demands made by rich countries on behalf of agricultural commodity-trading multinationals. Kamal Nath, India’s Minister for Commerce and Industry, pointed out that the Doha Development Round was supposed to give benefits to developing countries — especially in agriculture — not extract new concessions.

The immediately proximate cause of the negotiations’ collapse was a demand by developing countries that they maintain effective tools to protect themselves from agricultural import surges. Rich countries refused the overly modest demand.

And agriculture was the area where developing countries were going to benefit.

The rough trade at the heart of the deal was supposed to be that rich countries reduce market barriers to developing country agricultural exports, and developing countries further open up to rich country manufacturing and service exports and investment.

Such a deal “basically suggests that the poor countries should remain agricultural forever,” says Ha-Joon Chang, an economics professor at the University of Cambridge and author of Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism. “In order to receive the agricultural concession, the developing countries basically have to abolish their industrial tariffs and other means to promote industrialization.” In other words, he says, developing countries are supposed to forfeit the tools that almost every industrialized country (and the successful Asian manufacturing exporters) has used to build their industrial capacity.

In sum, says Deborah James, director of international programs for the Washington, D.C.-based Center for Economic and Policy Research, this was a lose-lose deal for developing countries. “The tariff cuts demanded of developing countries would have caused massive job loss, and countries would have lost the ability to protect farmers from dumping, further impoverishing millions on the verge of survival,” she says.

By the way, it’s not as if this is a North vs. South, rich country vs. poor country issue. Although there have been multiple lines of fragmentation in the Doha negotiations, the best way to understand what’s going on is that the rich country governments are driving the agenda to advance corporate interests, not those of their populations. That’s why there is so little public support for the Doha trade agenda, in both rich and poor countries.

Says Lori Wallach of Public Citizen’s Global Trade Watch: “Now that WTO expansion has been again rejected at this ‘make or break’ meeting, elected officials and those on the campaign trail in nations around the world — including U.S. presidential candidates — will be asked what they intend to do to replace the failed WTO model and its version of corporate globalization with something that benefits the majority of people worldwide.”

Stocks surge higher, led by financial sector

NEW YORK — Wall Street soared for the second straight day Wednesday, rallying in the last hour of trading after a rebound in financial stocks and optimism about private sector jobs.

Investors brushed off a sharp jump in oil prices. The Dow Jones industrials rose more than 180 points, bringing its two-day gain to more than 450.

Bank and brokerage stocks, many trading at multiyear lows, turned higher and led the late advance. There was some relief in the market after the Federal Reserve said it would extend and expand its program to lend money to investment banks. The central bank’s move reassured the market that the banks would have cash if they needed it.

Investors have been worried that some of Wall Street’s biggest names will be slashing prices on more of their assets _ and needing more money _ after Merrill Lynch & Co. unexpectedly announced a $5.7 billion write-down late Monday.

“There’s a growing sense that what we saw out of Merrill Lynch is the beginning of the end for the financial cleanup,” said Craig Peckham, market strategist at Jefferies & Co. He added that the ADP number was also a good sign for the economy.

Earlier, Automatic Data Processing said private sector employment rose by 9,000 this month. After seeing jobs disappear by the thousands in recent months, the stock market is eager for any insights into the Labor Department’s take on the job market on Friday.

The ADP news helped offset a big spike in the price of oil after a weekly Energy Department report showed a surprise decrease in U.S. gasoline supplies. Israeli Prime Minister Ehud Olmert’s announcement that he plans to resign in September stirred concerns about the viability of Middle East peace efforts and rising tensions with Iran.

Light, sweet crude rose $4.58 to settle at $126.77 on the New York Mercantile Exchange. Oil has fallen sharply, however, since hitting a high above $147 on July 11. A drop in oil prices Tuesday contributed to a huge gain on Wall Street.

The late rally may also have been due to technical trading; in times of great volatility, many institutional investors start adjusting their holdings before the closing bell.

The Dow rose 186.13, or 1.63 percent, to 11,583.69. On Tuesday, the blue chips jumped 266 points, more than wiping out a nearly 240-point loss from the previous session.

Broader stock indicators also surged. The Standard & Poor’s 500 index advanced 21.06, or 1.67 percent, to 1,284.26, and the Nasdaq composite index rose 10.10, or 0.44 percent, to 2,329.72.

Advancing issues outnumbered decliners by about 2 to 1 on the New York Stock Exchange, where consolidated volume came to 5.06 billion shares from 5.11 billion in the previous session.

Bond prices fell as stocks advanced, diminishing demand for the safety of government debt. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 4.05 percent from 4.04 percent late Tuesday.

The dollar was higher against other major currencies, while gold prices fell.

Shares of Morgan Stanley and Lehman Brothers Holdings Inc. climbed more than 5 percent, while Citigroup Inc. and Merrill Lynch rose about 2 percent.

Fannie Mae and Freddie Mac, the government-chartered mortgage companies which together hold or back nearly half of all U.S. mortgage debt, also rose on news of the Fed’s latest moves. Fannie Mae advanced 45 cents, or 3.9 percent, to $12.05, while Freddie Mac rose 6 cents to $8.48.

Wall Street has been juggling a number of intertwined worries in recent months as it tries to determine where the economy is headed. There is continued concern about bad mortgage debt that many banks are holding because homeowners swept up in the pullback in the housing market are missing mortgage payments.

And the rapid rise in oil and other commodity prices this year has only made it harder for many consumers to keep up with their bills. Any sign of an easing in the credit and housing markets, or a drop in energy prices, offers some investors hope that the economy could begin to recover.

Investors are anxious for the government’s advance reading on second quarter gross domestic product, which is due Thursday. Economists expect that, while it might not feel like it to many consumers, the economy is still eking out growth. A good chunk of it may be due to government tax rebates.

In earnings news, Starbucks Corp. said costs related to its closure of 600 underperforming stores led it to post a loss in its fiscal third quarter. However, it matched Wall Street projections.

The Walt Disney Co. said third-quarter profits surged nearly 9 percent thanks to revenue growth at ESPN and strong results from its theme park near Paris, where the weak U.S. dollar was helpful.

The Russell 2000 index of smaller companies rose 4.31, or 0.60 percent, to 718.86.

Overseas, Japan’s Nikkei stock average rose 1.58 percent. Britain’s FTSE 100 jumped 1.91 percent, Germany’s DAX index advanced 0.96 percent, and France’s CAC-40 jumped 1.85 percent.

___

On the Net:

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

Jeff Danziger: T Boone Pickens

GM To Cut 5,000 Salaried Jobs

DETROIT — General Motors Corp. is looking to cut its U.S. salaried headcount by 15%, or around 5,000 workers, by Nov. 1 as part of a plan to trim $10 billion in annual expenses, according to people briefed on the plan.

The auto maker previously said it was planning a 20% reduction in salaried-worker costs, including a combination of benefit reductions and job cuts.

GM hopes to convince workers to leave voluntarily by offering early retirement incentives rather than forcing layoffs. The company is expected to soon roll out offers to workers that will include both cash incentives and the chance for some to leave the company early with full pension benefits.

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